Who should NOT invest in property... and the REASONS why.
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- เผยแพร่เมื่อ 1 ต.ค. 2024
- Australian property spruikers ALWAYS talk about the people who should buy an investment property. I'm going to run through the property investors who should NOT buy a rental property. It's hard to work out who to trust for property investment advice in Australia, so I'll do the maths and explain the reasons, so you understand my assumptions.
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The first consideration is the length of your investment horizon. This suits two types of prospective property investor, the first is younger people who chop and change their investment strategy. The second is older people who don't have a reasonable amount of time to allow for compound growth. The transactions costs of buying a rental property in Australia is quite high; my estimates on a $450k purchase price suggests the buying costs to be around $30k+
If you're an entrepreneur or a small business owner with a scaling business, it may be better for you to invest your free cash flow back into the business. Even if the business is valued 3x less then the proposed investment property, it does not take long (with a scaling business) for it to catch up and supersede the investment property.
Make sure you sort yourself upfront because you don't want to be a forced seller. The transaction costs on an Australian property investment will lead to you losing $50k on a $450k property investment.
Finally, the get rich quick crew should stay out of property investment. If you're not willing to understand a 15-year plan, then it's likely you'll be disappointed. It's better to have a conservative plan that you achieve, rather than an optimistic plan where you lose faith in the strategy.
Best of luck with your property investment journey.
bra I totally agree you cant retire in property in Australia through better countries like the USA and UK more likely
There are opportunities everywhere, but keeping it local helps when you're adding value to the property.
totally agree cairns has always been boom or bust so understanding the volatility of markets is a must , being a tradey i am directly affected by these economics
Enjoy it in the good times, but when the tide turns, it's hard.
Thanks Kent, nice videos. Are you willing to share the example sheet you used? It will help to understand how is it all working or have a chat.
I can, but it's pretty basic. In future videos when I go into it in more detail, I'll include the links.
What about AREITs mate?
Some of these things have been completely overlooked on the ASX but there are some genuine gems out there in non listed land as well.
Direct property is just too hard these days.
I hear a AREITs video is due!
Hi kent like your videos, do you think serviced appartment e.g hotels are a great investment to add extra income if you have over 50% deposit? Im thinking of investing in one.
Also am interested in buy a house with a big block and subdividing it and walking a unit at the back but am not sure which suburb to buy into
Anything can be a great investment with enough time and diligence into buying the top 2%! Also be mindful of why you're buying (growth or cashflow) and the assets limitations (ie. lending restrictions, rent restrictions etc.)
Granny flats are a cashflow strategy which works better in areas of high cashflow for standalone houses (getting a double banger of cashflow). These areas tend to be more affordable and as granny flats are smaller dwelling sizes be mindful of public links. Hope that helps with some direction...
Another awesome video Kent.
Thanks for the support, let me know any other content you'd like to see...
Excellent advice, is it possible to get access to excel sheets you used ?
Nanas cardigan
She doesn't mind a little knitting 😂
How many propertys do you have
2x properties (ex. developments), $850k stocks, $2m rent book, $300ish in other investments. Why?
@@KentCliffe I appreciate your honest mate.
@@KentCliffe 20 years?