Prices for the properties are moving and in many times can even be unpredictable. Property as an investment has characteristics which you need to understand.
The immobility of the properties
If the house is in the suburb, of course you cannot move your house; you will leave it behind. This is where the investors come in since owners will possibly sell the property.
However, if you think about investment and future increases in the value of the property, you will not sell the property.
Having the house and the land can be your gateway to acquire loans and these properties will be your collateral. You can invest for more earning ventures as well. Thus, your capital will be magnified.
Durability of the real estate
Durability makes real estate more worthy and profitable investment. Your share on the investment will give you dividends. These dividends as your income should also be reinvested.
For instance, you can use it for repair or renovation of the property. Doing so will make your property more durable.
The Demand for the property
Once you invest in the property, you expect for a higher demand for such type of property. Bu this is always influenced with the location which can tell how long you will be able to sell the property or how long will you look for tenants to rent it.
You need to be also aware of the possible worst situation to happen – having an asset which is hard for you to look for available buyers or renters.
Transaction cost to consider
You might find that the transaction cost is high when you buy a property. For example in Australia, you will be paying for the legal fees, stamp duty, fees for transfer of mortgage, insurances and many more. This is not to mention the percentage for the agent and also the capital gain tax.
Property for investment or for consumption
You may have twofold purposes when you buy the property: to use it as your house or home or to have it rented for tenants to pay you. You will be earning for a property which you would like to have in order to have it rented to tenants but will never have earnings when you buy the house as family’s shelter.
Why Property Investment Price Changes?
Given the characteristics of the property investment, you need to acknowledge also that the value of the real estate shifts in an unpredictable manner. Other than that, the mortgage financing interest rates can also change.
The law of supply and demand is applied as: the prices of the properties which is referred to as supply may increase or decrease depending on the willingness of the people to buy the property (demand).
In Australia, the properties like residential estates have demands from investors, property renovators or developers and owners or renters.
The property’s demand is influenced by the location and the population of the area. Generally, investors will look after properties with the earning population.
On the other hand, investors of the properties will have a control on the supply that will come out in the market where buyers will search for the properties to buy or renters to occupy the space. The way they price the property depends on the construction or the renovation cost of the property.
There are a lot of things to consider when you will invest on real estate. One can therefore conclude that learning the techniques on how to succeed on property investing is always the key.
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