In real estate, property advisors suggest a number of great investment opportunities for investors. But all do not fit into your budget and needs. Some might be favoring your investment strategy others might be against. Therefore, we have created a list of top 7 property investment ideas for new investors.
Table of Contents
7 Ways of Property Investment Ideas For New Investors
Property For Buy And Hold Option
Positive And Negative Gearing Properties
Investments Having Positive Cash Flow
Investments Aiming Renovating To Sell
7 Ways of Property Investment Ideas For New Investors
1. Owning Property For Own Use
Owing house for your own use is the most popular way of investing money for buying a property in Canberra. Buying a house for your own purpose helps in providing two-way benefits to investors. First, you can live without paying the rental amount and can enjoy all property rights. You can design your house in your own way. Secondly, whenever you plan to buy a bigger house, you can sell house property at lucrative prices. Even if you bear the loss of selling house property, you can deduct the amount from capital loss. Therefore, it’s a win-win situation for investors.
2. Property For Buy And Hold Option
Buy and Hold is the most effective and low-hassle strategy for real estate investors. In this case, investors buy property at low prices either during the construction phase or when the market is in depression. And then hold it for a longer time. Some of the investors let out their house and pay mortgage amount from the rental income. This is the best practice to invest in real estate, even if you have less amount. You need to pay the only downpayment, and the rest amount will be recovered from rental income.
When the real estate economy reaches to peak, selling the property will be a great deal. You can invest the profits in another two least-cost investment opportunities. Buy and hold is only profitable when you have another place to live and have excess funds for investment.
3. Positive And Negative Gearing Properties
Positive and negative gearing relates to annual rental income from the property. In positive gearing, annual income from rent exceeds the annual expenses before calculating depreciation. But, investment opportunities with positive greetings are hard to find. Basically, these include schools, offices in less populated areas. The demand and supply law effect and a limited number of residential properties get the privilege to generate high income from a rental property.
On the other side, negatively geared properties are just the opposite. Here, the investors, unable to meet annual property expenses with the rental income. But you can get a rebate on this loss from other income. While calculating gross taxable income, income tax authorities provide the provision to deduct loss amount from taxable income, and then tax is calculated.
4. Investments Having Positive Cash Flow
Positive cash inflow means when you are getting high rental income than expenses paid to maintain a certain property. Positive cash flow can be either weekly, monthly, or annual cycle. But it must be in passive form rather than expenses incurred. You can calculate it as
“Positive Cash Flow = Rental Income – Rental Expenses.”
Keep in mind, New properties or newly renovated properties have a better capacity to deliver positive cash flow with high depreciation benefits.
5. Investments Aiming Renovating To Sell
Some of the investors buy a property intending to sell at higher prices. But for this, they need to put extra effort and make the property stand out from the crowd. There are a number of property renovators that take a contract to renovate your property and make it like a paradise within budget. You just need to hire a skilled contractor that can predict the renovation potential of your property. He will be budgeted to spend money on improvements that will add value to your property for sale in Canberra.
This is a perfect way to get a high price on your investments. All you need to do is to be in the budget only and complete the renovation process in a short time.
6. Renovating To Hold
Renovating to hold is another way of investing. In renovating to sell, you need to be quick for renovation and selling property at a higher amount. But renovation to hold provides you enough time and scope in the form of money and energy for improvement. Whenever an investor has surplus money can improve the property. This can be weekly or annually. Every time renovation will improve the asset value. This can also be applicable to land. Whenever you get some time, you can add renovation or start constructing a property. This is a slow process, but worthy. You can maximize property value within the budget.
7. Block Splitting
Block splitting is a simple form of real estate investment and popular in places that meet with land scarcity issues. Here, you will buy a piece of land and split it into different parts or blocks. Each part will be assigned to different contractors to generate income. For example, you bought land and sell to different contractors for different purposes like parking, apartments, community hall, etc. All these will generate more income than letting property to an individual.
I hope the above information helps you to choose the right investment opportunity for your needs. Remember, while buying a property, always take assistance from professional real estate agents. Their experience and knowledge of real estate help you to make wise decisions. Agents know the upcoming property trends and areas with a high scope of growth that will boost your property rate.
Alison Duffy is working as a project manager in Canberrapropertysolutions which is Australian based Real Estate consultancy and provide property for sale in Canberra. She loves to share her ideas regarding real estate investment, properties, etc.
One thought on “Top 7 Property Investment Ideas For Investors”
Well written and wonderful article full of information. Thanks for sharing such a great article with us:-)