Newspaper article The Observer (Gladstone, Australia)

Let's Talk Property Investment

Newspaper article The Observer (Gladstone, Australia)

Let's Talk Property Investment

Article excerpt

Byline: With Ray White's Dale Ware

PROPERTY Investment can be a daunting task, but with a bit of study and research, risks can be minimised and some good money can be made.

There are four main factors that can determine whether your investment has a chance of making a profit. These are:

Yield

Capital gain

Risk

Time in the market

Yield

The yield in a property investment is the amount of rent received annually divided by price of property expressed as a percentage e.g.

If you just bought a property for $600,000 and you rent it out for $30,000 per year, the yield will be 5%

Capital gain

The idea with capital gain is to buy low, sell high.

This is a great theory, but not easy put into practice unless you have some knowledge and some patience.

In general terms property runs in a 6-10 year cycle of boom and bust, but this is also complicated by local conditions.

And this is what usually happens in Gladstone, and what is happening right now.

At the moment most markets in Australia are well into the up cycle.

Here in Gladstone we are at the bottom of the property clock.

This is mainly due to an oversupply of workers accommodation, which if managed better could have seen Gladstone on an upward path for at least five or six years instead of two years.

But, it's not all bad!

Because being at the bottom of the property clock means there's only one way to go... up.

The smart investors start buying now and then by the time Gladstone's property market gets to 12pm they are sitting on a tidy profit, leases are up for renewal and they can put the rent up!

Timing the market like this is not easy but it can be done, but the real key is not "timing the market" it is "time in the market".

Property for most of us is a long-term thing, the longer you hold a property the lower the risk.

Risk

When investing in property the risks involved are many, these include interest rates, falling property prices, tenanting problems and structural integrity of the building.

It is important when buying your investment property that you put a lot of research into the property and the market. …

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