Newspaper article Daily Examiner (Grafton, Australia)

Many Accidental Investors; Report Reveals One in Five Property Investors Did Not Plan to Enter the Market

Newspaper article Daily Examiner (Grafton, Australia)

Many Accidental Investors; Report Reveals One in Five Property Investors Did Not Plan to Enter the Market

Article excerpt

Byline: Tim Howard tim.howard@dailyexaminer.com.au

AS MANY as one in five property investors start their portfolios by accident, a new national report has revealed and Clarence Valley investor tales match the metropolitan story.

The good news for local investors is changes flagged for negative gearing and capital gains tax changes could have little effect locally.

The report, by MCG Quantity Surveyors, found 23 per cent of investors in metropolitan areas had started their profiles "by accident", when they tried and failed to sell their first home when it came time to move on.

"Many of these owners seem to have fallen into their first investment, rather than made a strategic decision to become a landlord," said MCG managing director Mike Mortlock.

"It's a fairly stunning result given the broad perception of property investors as a calculated, high-earning cohort set to tactically snap up all the available real estate."

MCG gathered the data while preparing tax depreciation schedules, asking clients if they had previously occupied the property, and found 23 per cent had lived in their investment property as their principal place of residence, with owners living in their former home for four years and 11 months on average.

Locally property managers said this was a common experience when owners had to make a decision whether to keep their first property if they failed to get the sale price they wanted.

Principal at Elders Grafton, Karen Gorton, a residential and commercial property manager, said this was the main way she found many local property investors got their start.

She said another scenario was people inheriting property and making a decision to rent rather than sell.

Ms Gorton said while metropolitan investors needed to consider the possibility of changes to negative gearing and capital gains tax rules, this was not such a big concern here. …

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