There are many investment opportunities available in Australia and real estate or property investment is most definitely the one that receives the greatest attention.
You might not realise this but Australia has a land-mass the size of the United States but with only a tenth of the population. This leaves large areas of land undeveloped.
Multiple unit development projects have been in the planning stages, as well as family homes, commercial opportunities or rural/farm properties.
And, offshore property investors are welcome and subject only to Foreign Investment Board Review, which is normally not difficult to obtain.
All of these factors help make property is a remarkably flexible investment and, no matter what your financial aims are, you should be able to find an investment strategy that suits you.
If you truly intend to become a wealthy person of the future, you should probably take a serious look at adding property to your investment portfolio and using it to your advantage.
Is Property Investment Future-Proof?
When you invest in property, the rental income you receive from that property lets you to borrow and gain the benefit of leverage by helping you pay the interest on your mortgage.
Over the years the rental income received from property investments has increased at a rate that has outpaced inflation.
Will this continue in the future?
Well, statistics show that the level of home ownership is slowly decreasing in Australia.
Interactive visualisation courtesy of The Sydney Morning Herald
There are a number of reasons for this. In particular, as property prices keep rising, fewer people are able to afford their dream homes.
Together with higher rentals, it means that many first home buyers have been hit with a “dual disadvantage” – making the great Australian dream of owning a house just that for many – a dream.
We know that the government is having difficulty providing public housing, which means there will be plenty of opportunities for landlords to obtain a return from residential property investment.
This is particularly true if you own a property that will be in demand by tenants of the future.
Safe as Houses
The most significant difference between property and other forms of investment over the last century is that many of the properties upon which all of the statistics and numbers are calculated still exist today.
That can’t be said for many companies that form the basis of share-based returns. Companies and jobs that exist today can simply be made obsolete tomorrow.
So, why invest in property?
Unlike shares, property is a tangible asset that won’t vanish as a result of poor management, disruptive technologies or obsolescence. As building and labour costs continue to rise, so will land and property values.