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Property Wealth Creation: A Beginners Guide

Author: Julian Parsons/Thursday, February 3, 2022/Categories: Feature Writer Julian Parsons

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There are a tonne of places to put your money these days. You could invest in stocks and shares which pay dividends every year, do options trading where the buyer does not actually own anything for months or even years when they purchase the asset at a lower price than expected, invest in venture capital and put money into start-ups that will require an initial investment plus money over several years or take your chance with the unchartered waters of crypto. All of them are sound investments and with the right education and advice they can all create wealth. But a lot of them require time or risk, both of which are less prevalent in a real estate investment.

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The options with real estate are endless, you can buy a property for yourself to live in knowing it will increase in value over the years, or you could buy industrial, commercial or residential lots and rent them out for a frequent cash return. People will always need homes, businesses will always need land and therefore you will always get paid. 

Real estate is a mostly secure investment that is far less volatile than the stock market and can create generational wealth. Here are the top 7 reasons to invest in real estate.

The right real estate investment will continuously appreciate:

Over the last three decades, Australian house prices have risen, on average, 7¼ percent each year. This steady increase shows the power real estate holds for wealth creation. Tons of homeowners who purchased their properties just 10 years ago have now tripled their investments. Homes are in hot demand for both buyers and renters, you will always have customers in one way or another as a real estate owner.

Buying real estate gives you an asset:

Unlike stocks which can leave you with nothing to show if the market tanks, real estate is a tangible asset that you can use to live in, rent out or sell. As rent prices continue to rise, specifically in Sydney, the cost of mortgage repayments may actually be cheaper than rent in some cases especially if you have two or more incomes pitching in.

Owning a home also awards you tax benefits and huge grants that you don’t have access to as a renter and can get you started with your real estate investment journey.

“If you have the capital, buying when everyone is selling and selling when everyone is buying is the secret to making real money” says property investment mentor Jeanine Sciacca, “Maintaining your investment capabilities, even in times of societal low, is the best way to get bang for your buck”.

You can turn your home into a hotel:

The introduction of apps like Airbnb have made it possible for homeowners to make incredible income by dipping into the tourism industry. Airbnb makes it possible to rent to tenants even if you only have a small apartment or even 1 room to spare. 

“Airbnb is super popular with tourists and yields higher returns than traditional renting” says holiday accommodation company Happy Days Moreton Island, “If you have real estate in a touristy area then you could definitely earn your primary income from Airbnb”.

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You have leverage:

Because real estate is a bankable asset you always have the option to leverage it. When you purchase a property with a loan you only need a 10% down payment meaning you can use the bank's capital to grow your wealth.  

The opportunities are endless and flexible:

The power to be flexible with real estate is one of its most attractive features. You can buy a house with the intention of renovating and selling but decide to rent it out instead if the market happens to tank. You can refinance your investment to make more. You can transform a plot of land into a block of 80 units that all pay rent to you or build a granny flat at the back of your property for a tenant. 

“No matter what your goal is, you will most likely make money with real estate because people will always need a place to live or do business,” says the real estate wealth creation specialists BMA Consulting. “It is a safe bet if you know what to look for”.

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