Property Investment Tips
One of the problems with property is that performance is not always predictable with any degree of accuracy, particularly in the short term. So what practical measures can we take to improve our chances of success?
Target major population centres…
In the past few years, some of my best investments have been in Sydney, Brisbane and Melbourne. This really comes as no surprise, as I have observed over the years that the largest population centres with the most diverse economies tend to show the least volatility.
Go for Geographical Diversification…
Over the years, I have invested in a number of cities, regional centres and states. Individual assets have not always performed entirely to my expectation in the short term, whilst others have exceeded my expectations. However, despite the fact that at any given point in time, not all of my assets are in a robust growth phase, my collective asset base has increased in value year on year, and as a portfolio has performed well. The more properties you own and the more geographically spread your assets are, the less you will be affected by the performance of the individual properties in your portfolio.
Consult an Expert…
I believe that it is essential for beginner investors to be able to tap into the knowledge base of much more experienced investors in order to make a really good start in investing. This is certainly how I got started. However, even expert investors do not have a crystal ball to predict the future with 100% accuracy, and it is important to acknowledge this.
Take a Long Term View…
Gaining exposure over time to at least two major capital cities should give you a strong base to your portfolio. And be prepared to take a long-term view. Over the shorter term of 3-4 years, properties do not always show strong performance, but generally speaking the longer you hold them, the more they should get pulled back to a decent long-term average, as long as the underlying fundamentals are strong.
Multiple Investments…
A large and diverse portfolio is the best way to avoid the vagaries of the individual markets, and it also the best way to reach your long term financial goals.
So, go out there and start buying, today!