(03) 9020 2905Does a bear you-know-what in the woods? Or, in the words of Frank Spencer from Some Mothers Do ’Ave ’Em, has “the cat done a whoopsie in my beret”?
Yes, of course property’s still a good investment. Property will always be a good investment. That said, not all property, and not every year in a decade.
But first, let’s define “investment”.
Too many people confuse a “home” for an “investment”. They are virtually opposites. Residential property is either a home or an investment.
If it’s a home, then it matters less when you buy. You buy when you can afford to.
A home is about filling emotional needs. It’s about being near where you work, or where the kids go to school, or where your friends live, or near the lifestyle you want to lead, or a combination of these.
Sure, you might get a bit unlucky in the timing of your purchase. But it doesn’t matter as much. You’re going to live there for years. And when you go to sell and buy again, you’ll generally trade up in the same market, whether it’s up or down at the time.
An investment property, on the other hand, is about one thing only.
Making money. Nothing else.
So, if you’re buying an investment property, remember a few things. Overpaying is financial death (so paying when prices have fallen a bit has got to be better than buying before they fell). Put some focus on rental return – it’s important.
And buy something with some land value. Flats and apartments are exactly what bears do in woods and cats do in berets.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal adviser with Castellan Financial Consulting.