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Property Investment in Australia: Navigating a Tough Market

There is so much conflicting commentary in the media about Australian property.  Are we experiencing a huge property bubble about to burst, or are high prices here to stay given we are a wealthy country with an under-supply of property?

The fact is:  in a market where there is such high property price volatility and uncertainty the winners will be those equipped with the tools and knowledge to take advantage of the opportunities and the uninformed.   If you are considering Australian property as an investment, this article could be your first positive step towards taking control of profiting from it - in a big way . . .

House and gold coins on the scale

Whilst I do not have a crystal ball, I know Australian property is very tradable and is one of the few asset classes where the local investor can take control of the investment terms, the investment appreciation, and the investment exit.    Learn how to take that control and it could be the best lesson you ever take.

If you invest in listed stocks or bonds, or managed funds that invest in these, all you can do is sit back and watch the value of them go up and down based on the markets and management performance that you had to speculate on upfront.  For most it feels like a complete gamble.  If you (or your fund manager) guess better than the market on these factors then you should profit, otherwise you may see your invested funds decline.  Either way, you probably never had much control during the investment.

Property does have its undeniable market risks.  But as an investor or owner you can usually seriously influence its improvement, presentation, and exit value.  Owning shares in BHP will not let you influence its investment performance.  And importantly, unlike shares and commodity markets, selling an investment property can seek to benefit from emotional purchasers - and emotion can yield the seller a sizeable profit!  Learning to understand property investment, property improvement and presentation, and appealing to the emotions of future suitors of your asset makes it a very different investment class to listed equites or bonds.

Happy Couple Hugging in Front of Sold Real Estate Sign and House.

Basically, PROPERTY OWNERSHIP = (opportunity for) INVESTMENT CONTROL.  It sounds simple, but it is amazing how many investors simply compare historical returns from property ownership to investment returns from passive securities investment.  If equities have yielded higher than property in the last year then let's invest in equities!  Property ownership gives you the ability to make decisions to seek to transform value.

An analogy would be:

The PROPERTY INVESTOR is the surfer who patiently waits just beyond the surging tide all morning to pick his ultimate wave, then rides it as best he can, and exits it spectacularly to avoid getting dumped into the turbulent white mass;

The passive SECURITIES INVESTOR takes a skippered boat out into the ocean and gets regular reports on its direction and tidal influence, and hopes to return to port on safe terms but must rely on the judgement and actions of the Captain and the crew.

There are so many considerations for someone seriously contemplating "Australian Property Investment": purchasing, financing, developing, building, renovating, improvement, timing, marketing, presentation, and sale.  When it comes to property, I feel textbooks are far less useful than real practical advice and learnings from experienced experts, winners and losers.  I have been a property winner (several times) and a property loser, and now believe I can offer some expertise from experience and observation.  But the real way to get informed and take control is to take practicable advice from a wide field of experts.  You cannot learn it all from one expert.  The good news is IT IS REALLY DIFFICULT TO UNDERSTAND PROPERTY INVESTMENT.  But if you take the time and do the research then you can be a winner too.

 

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