So you’ve finally joined the 7.9% of Australians that own an investment property.
Now that you’ve freed yourself from the shackles of procrastination, your job is simple:
- Be in the market long enough to experience multiple market peaks
- Invest smartly enough to be able to hold a property in the inevitable market corrections
- Time the market well enough so that you can build a portfolio in the shortest period possible
Those familiar with this blog will know that I’ve never shied away from the fact that property is a long term investment. Research indicates that market cycles last anywhere between seven years and a decade. In addition, the relative illiquidity of the asset, lends itself to a longer term hold strategy. So what’s next? You’ve held long term, you’ve built a portfolio and you’ve successfully ridden the property cycle. The next step is governed more by your personal goals, rather than strictly research.
I don’t profess to know your personal circumstances. Our expertise is property, you should consult your accountant or financial planner for strategic advice. What I can share, however, are my own experiences and how I plan to leverage (literally and figuratively) off property to achieve my goals:
Short Term
- Build a portfolio of three or four properties in the next decade
- Liquidate a portion of the portfolio, using equity in these properties to offset the debt on my principal place of residence
- Upgrade my principal place of residence
Long term
- I’m in the fortunate position of calling those in Generation Y my peers, meaning that I have plenty more years of superannuation contributions to push that balance upward. Still, I’m under no illusion that the final sum will be sufficient to fund the retirement I seek
- Like an increasing number of Australians, I intend to establish a self-managed super fund and invest in property. Between 2011 and 2016 the value of residential property held by SMSFs increased 60% to $23.3 billion
- Use leverage to build a portfolio within super, with the intention of 1) liquidating on retirement or 2) retiring on the rental income
What I describe above is my ‘why?’ of property investment. It by no means will apply to all reading this and I reiterate the importance of combining expert advice with some introspection to determine your ‘why.’ Regardless of what your goals may be, property is an asset class that can help get you there.
