When chosen carefully, property can be an excellent investment option. Over the past fifty years in Australia, residential property prices have doubled every 10 years, which is ideal if you’re looking for a strong mid-long term investment.

The average Australian property cycle is 7 – 10 years. If you are serious about property investment, this is the time frame in which you should aim to create a positive cash flow from your investment.

The other great thing about property is that the Federal government has continually supported property investors through tax incentives. Investing in residential real estate can give you access to great tax benefits and capital growth.

Many investors see property as safer alternative to other forms of investment. This is because generally, the residential property market is considered to be less volatile than other investment platforms such as stocks and shares.

Investing in residential property also allows you to start at a level that is comfortable for you. It may be that your first purchase is an entry level investment such as a tenanted townhouse which you can use as a stepping stone to create further wealth.

Many property investors start out small and use their investments as a way of accumulating wealth so that they can buy their dream home, or retire sooner.

Residential property investment has the flexibility and wealth-creation potential to suit most investors – regardless of which stage of life they are in. If done properly, property investment is an excellent way to reach your goals and create a rewarding and secure retirement nest egg.

As a property investor, one of the first things you will need to think about is which professionals you will use to make up your property investment team.

If you’re new to property investment, it can be a little confusing to figure out ‘who does what’ within the property investment space. Let’s think this through.

Real Estate Agents

When a home owner, developer or spec builder uses a real estate agent, that agent acts as a seller’s representative. This means that they are legally responsible to the seller to get the best possible sales outcome. Real estate agents and display home consultants are usually limited by their local franchise area and how much stock they have access to.

Buyer’s Agents

A buyer’s agent is an agent who acts for the buyer. They source a selection of properties that match the buyer’s needs and represent the buyer throughout the purchase process. This includes negotiating the best possible terms and conditions from the seller. Buyer’s agents usually work closely with property developers and stock wholesalers to find properties under commercial terms which are not offered to everyday retail buyers.

Your Investment Team

It is crucial that you have a trustworthy selection of support professionals on your investment team. These professionals may include:

  1. Licensed finance broker
  2. Licensed investment property advisor
  3. Solicitor
  4. Insurance provider
  5. Property leasing manager
  6. Quantity surveyor
  7. Accountant
  8. A financial planner if you are investing through a self-managed super fund.

Remember: If you intend to conduct your own due diligence, you will need to project manage any outsourced service providers. This will mean coordinating their services.