Rent – The true core of real estate. Investing in real estate should be a buy/hold approach. The traditional way that provides moderate returns while having the opportunity to use the rent to escalate the loan repayments.
TV reality shows often falsely indicate that successful real estate is a quick turnover from buying a home, renovating it, and reselling at a much higher price, but this is far easier ‘said than done’. It can certainly work well for a highly skilled worker that has the ability to reduce the labour costs, but many of these people also struggle to have the time to take advantage of this.
Buying new property provides longevity and requires less maintenance compared to an older property. This seems to suit most investors agreeing to adopt the tradition buying strategy of buying/holding. New property perfectly complements this approach and attracts good tenant demand.
Renting is the true core of real estate investing. Capital growth is always desirable and locations/property types will outperform in different intervals. Any price appreciation is a bonus. However, renting should be an important objective on the basis it generates a steady monthly pay check. While in wealth accumulation phase the rent is a useful cash deposit to increase your loan repayments or possibly to service a future investment. Rental income is also useful to manage a retirement budget. Have you ever thought what will replace your wage when you cease work?
A new property will still look very presentable to tenants in 10-15 years and this is where the buy/hold strategy provides results. You pay the debt off and the property will pay you back in retirement.
‘Don’t wait to buy real estate, buy real estate and wait’.
If you’d like to learn more about buying an investment property, please don’t hesitate to contact us. We would welcome the opportunity to help with your property purchase. Our YouTube channel and Market Insights also provide a wealth of information to assist you with many areas relating to property investments.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
July 2017
