What types of investments are best?
There’s no one single right answer as each different investing strategy has it’s own pros and cons. It will depend on how much money you have,… see more your appetite for risk, how quickly you’re trying to make money and how quickly you want to get there.
For most people that have a reasonable income, I believe the most guaranteed way to make wealth from property is to buy median priced properties in blue chip suburbs 5-15km from a major city i.e Sydney or Melbourne. The 5-15km location from a city is where the majority of people want to live that have high disposable incomes and there is a limit to how high you can build which limits supply.
Buying around the median price means that the majority of people can afford to rent it which means there is plenty of demand. That limited supply and increasing demand is the factor that causes price growth even if the economy is static.
When it comes to specifics on the property I would typically choose:
- 2 bed units – easy for to people to pay $300/wk rent each for a two bedder as opposed to $450/wk for a one bedder, and most don’t want to share a 3 bedder
- Parking – parking is a problem now and it will only get worse
- Quiet st – no one wants to live on a busy noisy main road
- Block under 12 units – it’s harder to get strata decision made if too many units. Boutique is also nicer to live in No lifts, gyms, pools – very expensive to maintain and tenants don’t pay more for them Second hand – new units sell for a premium and can’t be improved
- Double bedrooms – no professional wants to be in a single bed
- North Facing – the more sunlight the better
- Balcony/Garden – everyone wants to enjoy some fresh air
I think a long term buy and hold strategy will give you a more guaranteed return as opposed to speculating and trying to find the next best suburb which may or may not grow. You can normally get more cash out by refinancing rather than selling and so as long as you can cash flow the property in the short term, you should make money in the long term.