Back to Basics
by John hopkins_Executive Chairman
When it comes to property, the word ‘investment’ is often attributed exclusively to those people leasing their properties to tenants – to people who are investing their money only for money making purposes.
What about those who are buying a property to live in? Whether you are buying a property to live in or to rent, it is an important decision. And in 99 per cent of cases, it is the biggest financial decision people make.
Therefore, the decision of what property to buy, whether you are an investor/occupier or an investor/landlord, is a crucial one.
Contrary to the commonly held belief, the three most important words in real estate are continuing strong demand – not position, position, position or location, location, location.
Investors basically want Returns, Security, and Flexibility. The Returns they want are three-fold; capital growth, rental growth and a high marketable rent. They want Security in a stable investment, and Flexibility, in that even if the economy is in a recession, a property will sell or lease readily without recourse to a fire sale.
If you are an investor who 'lives’ in the property, you might think the tenancy and leasing part of the equation is irrelevant to you.
It’s not. It is beneficial your property also appeals to the investor/landlord market thus strengthening its demand, ensuring continuing high value, greater security and, if an income is required in the future, strong rental appeal.
What underwrites Returns, Security and Flexibility is continuing strong demand of both tenancy and sale for now and the foreseeable future.
What makes residential real estate prime, from an investment point of view, is that people want to live there, and compete to live there.
It’s the qualities which make people want to live there as tenants or owners, or to own it as landlords or occupiers, that are important.
As a general rule, when it comes to residential property, you should select the best property, in the best suburbs of a major metropolis which most people looking to own or occupy can afford.
For more information, or to arrange an appointment with a John Hopkins Property Adviser, please contact our Client Liaison Officer on 1300 726 082 or click here.