Learn 8 Things To Consider About Brisbane Property Investing Before You Get Started
Nestled between beaches and mountains on a river bend, the Australian city of Brisbane is home to over two million residents, and this number grows every year. Individuals flock here from within the nation but also from other continents. With great natural spaces, economic opportunities, proximity to the Great Dividing Range, and easy access to the Gold and Sunshine coasts, the capitol of Queensland draws in citizens, business professionals, and tourists from around the world. This makes investing in Brisbane property a profitable enterprise, but before you dive into it, there are 8 things you need to consider. Keep reading to learn what they are.
1) When do you expect a return on your investment? The speed and timetable in which you expect a return on your investment has impact on what kinds of real estate investing you can do. If you’re looking to make a lot of money in a short timeframe, then you are probably going to be looking for affordable properties at low prices that you can have contractors fix up fast to get flipped back onto the market. This can happen within weeks to months for detached residential homes for single families. Flipping can still happen with retail, commercial, office, and industrial properties, but not as quickly, as the base of available buyers is not as big.
On the other hand, if you are thinking long term, then it makes sense to consider buying and holding properties, particularly in parts of the city likely to see growth over the next decade or so. Any long-term trends resulting in growth of property values, especially in trends that outpace inflation, are things that can help you grow your wealth over time.
2) Are you investing by yourself? If you are looking to become a solo investor, then the range or scale of properties that you can look into is going to be limited to your personal spending power. This is either going to be the amount of savings you have that you can dedicate to this undertaking, or the size you can finance. Banks, lenders, and other financial institutions across the continent of Australia offer financing specifically for investment properties. How much you can get depends on a number of criteria, including your personal credit history, your documented income, and how much collateral you might be willing to put up as a security for the loan. Even if your ambitions are big, it’s okay to start small. Once you generate some profit from a few deals, you’ll have more capital to use towards larger enterprises.
3) Is investing with others something you are open to? Sometimes real estate investors in Brisbane come together as a collective group to invest in property or buildings together all at once. There are tremendous advantages to doing this, as a group’s buying power is far stronger than any one individual’s is. That pushes the limits on the size of investments you can be a part of. Everyone also gets to work with others to make informed decisions based on the wisdom and experience of the whole group.
There are downsides to this approach though. Such groups often require having a set level of money in your bank account as a minimum entrance requirement, because they’re not looking to carry anyone looking to make a fast buck or get rich on someone else’s coattails. Also, as a group buys and invests together, you also have to divide up any rewards or profits with the group, whereas investing on your own leaves you with all the upside.
4) Do you want rental income? One of the great advantages of Brisbane property investing is the ability to turn a lump sum of financial wealth into a steady stream of monthly income. While this can also often be accomplished by investing in bonds and dividend stocks, the amount of income they generate is not often as much or as regular. A single-family home can provide enough rental income to pay for itself within a decade or so in some cases, meaning that all income after that is pure profit for the rest of your life. Likewise, buying something like a commercial property with ten spots for retail stores or restaurants can provide up to ten streams of income.
5) Are you looking to flip properties? There is a whole genre of television programming revolving around buying abandoned, neglected, or otherwise undesirable properties and structures and then restoring or upgrading them to bring premium value on the market. Some individuals do this on their own, doing their own buying and work. Others serve primarily as the investor and let contractors handle the actual labor of renovations. It’s a risky path, as every property is a gamble, but the profit potential is quite substantial for those who roll the dice right.
6) Is property management something you can do? Even if you intend to eventually sell a property when the values are high enough, if you’re holding it long term, you might as well rent it out for income in the meantime. If you’re specifically looking for rental income, you’re already doing this. In either case, you need someone to handle the property management. This is more than just finding tenants, doing background checks on them, collecting rent every month, and handling an occasional maintenance issue. Even doing property management for a single-family home might eat up ten hours a week. You can certainly try handling matters on your own if you want to be hands-on and save money, but hiring professional property management services from a dedicated individual or business can save you a lot of time, especially if you have multiple units to take care of. In many cases, paying for third-party property management can make money over time as they don’t just find tenants, but good tenants who are stable income sources over time.
7) Do you want a place to live while doing this? If you’re not tied down to a place to stay at already, the investing in Brisbane properties might provide you a chance to have a discount or even ‘free’ place to live. Do note that many banks and lenders who provide investment property loans require you not to live at the address you borrow for, but outside of such loans, there are cases where you can call an investment property home. For instance, you might live in a basement apartment of a detached home whose primary residence is rented out. You can potentially do this with a series of condos, lofts, or apartments too, keeping one unit for yourself and renting the rest out.
8) Are you thinking about retirement? Something many beach or tourist resort owners do is to live on their property and manage it as hosts, giving them a potential retirement by the sea with happy company and money streaming in all around them. When there are vacancies or off weeks, you’d have plenty of room for family and friends to visit, and they’d have a great excuse to come!
The sun is usually shining in Brisbane, and as people continue to trickle into this growing metropolis, the property market will stay just as warm, if not hot. You’ve likely heard that land is the one resource not being made any more, so more people needing what’s already here can only mean higher property values over time. Use these 8 considerations to figure out what you want from Brisbane property investment and then get busy!
