The biggest risk in property investment is not what you would think!
When it comes to property investment, many people would be amazed to hear that the biggest risk factor is actually the opportunity cost of not investing.
As someone who’s been advising on property for over 20 years, I’ve seen folks consistently selling themselves short, missing out on gains that could easily be hitting $1,000 to $2,000 per week.
The role of professional support
Getting into the property market with the right professional support is actually surprisingly simple and low-risk. Many people are held back by a lack of financial know-how, education on the property markets, and not having a clear and well-defined strategy. A professional property investment advisor (or property wealth planner, as we prefer to be known) can guide you with real-time data, research and proven financial strategies.
Unlocking knowledge
But guess what? A one-on-one property investment course, where you dive into learning, structuring, planning, and goal-setting, can provide a fundamental understanding in as little as half to one day.
I’m not talking about a group ‘seminar,’ as these are often just a way for companies to generate prospects for their business. Rather, a genuine, one-on-one course where the objective is to learn first in order to make informed decisions moving forward.
Beyond the headlines
Forget what you see in the news—there’s no one-size- fits-all ‘property market’ in Australia. We’ve got different markets operating at different growth cycle stages, therefore timing is everything in property investing, and figuring out which areas are in their growth phase is key. Get some professional advice so you have a well-thought-out strategy and a plan to keep risks in check.
I’m throwing these insights your way to bust some myths. So if you’re on the fence, you can see that it’s not as tricky as it seems.
Financial resilience
Worried about the financial side? Most properties we’re looking at these days keep a positive cash flow, even if interest rates decide to creep up to eight or nine per cent. Take a $500,000 property with a modest five per cent capital growth; it’s bringing in around $500 per week. Wait it out, and you’re looking at a potential loss of $25,000 in capital growth each year.
Real numbers from Brisbane
Let’s talk real numbers. In the last year, unit prices in Brisbane shot up by an incredible 17 per cent. If you’d bought a $500,000 property in January 2023, it’s now sitting at $585,000. That’s an $85,000 equity boost in just 12 months, giving you an extra $1,635 per week in the bank. In addition, you’re earning $30,000 in rental income at a six per cent yield. However, if you’ve corporate let the property, you could be receiving up to $50,000 in net rental income for this period.
So, what’s the cost of not jumping in? An incredible $135,000 in just one year!
Don’t let fear hold you back
I’m throwing these insights your way to bust some myths and encourage anyone on the fence to see that setting up a solid structure for property investment is not as tricky as it seems. Acquiring even one investment property sooner rather than later might just fast-track your retirement or throw some extra funds your way for those unexpected life events.
Don’t let fear hold you back. Getting excited about the potential upsides of property investment is the way to go. Waiting another week could be another week before retirement!
Richard Sheppard is the CEO and founder of inSynergy Property Wealth Advisory. inSynergy provides a broad range of professional services designed to assist with all aspects of property investment. Phone 1300 425 595 or visit insynergy.net.au