Popular Investment Strategies
Whether you are just starting out in the property market or have been around for a while, it is important that you are making your property work for you, after all, it is probably the largest investment you will make.
Buy and Hold – The buy and hold investment strategy is perhaps the most popular amongst property owners as it is fairly passive way to accrue wealth. Essentially, this method of property investment involves buying a investment property (ie one that you will not live in) generally with borrowed funds, and then putting tenants in the property to assist you in paying off the mortgage.
As the value of the property increases overtime, and thus, so does the rent paid to you, you as the investor can use equity in that property to purchase another. This property investment strategy will most commonly lead to long term capital growth.
For this strategy to work effectively, it is important that you do your research and purchase a property in an area that is appreciating in value. Dubbo experiences solid property growth with good rental returns.
Negative Gearing – is a type of property investment where the expenses on the property, including the mortgage, property management, and other related costs exceed the annual rental income, therefore leading to a monetary loss on behalf of the investor. This loss in profit can generally be claimed against a investor’s taxable income to reduce the amount of tax they have to pay that financial year.