Investing is new to most people so it's worth taking the time to learn about some of the fundamentals. Residential property can be seen as one of the many different types or as they say, classes of investment assets that are available in the investment space today.
Understanding this family structure of different investments it's actually an important first step in beginning to understand why comparing different types of investments is difficult- they all perform differently at different times of the investment cycle.
Tip: To make things more difficult, most real estate agents, property agents and investment property spruikers are not financial advisers and simply don't have the ability to discuss the performance of different asset class to help you see the bigger picture. That's why you should work with us.
Another way to say it nicely is: If all you sell is a hammer, you'll see everything as a nail
We can advise you on all different classes of investment, including residential property.
When it comes to investing in residential property, (often referred to as direct property), there are a broad variety of types of property. Each of those types may also perform differently at different times in the property cycle, and therefore are difficult to compare without a detailed conversation about your interests, needs and expectations.
For example, a serviced apartment may perform differently than a typical house and land package in the traditional suburbs. It's a big subject and we've been helping our clients learn about it and step into the property market from a more informed position.
Below is a summary of different types of property.
- Remember each different type of residential investment property can have a very different effect on your investment plans, so it pays to know the differences and your options.
Investing in New or Established property
New residential property enjoys many advantages over the established residential property market, including reduced maintenance costs, greater tax and depreciation advantages, and usually reduced tenancy problems.
The reason for investing in new property is to enable the investor to capitalise on opportunities and profit from increased demand, greater capital growth and strong depreciation opportunities. Historically, new property and its tax advantages saw the typical buyer come from the ranks of the time poor and high tax bracket, but with the ever increasing exposure to education and lifestyle programming, today’s mums and dads have now entered the market and are vocal about their needs, expectations and demands.
Investing in property is a complex process with many issues not suiting everyone. Don't risk what you cannot afford to lose. Get some professional advice before going down that road.