Property Investment - Why it should it be your preferred wealth creation vehicle
Property and especially Australian property is an excellent investment. Not only is it much harder to lose money in property than in the stock market, but with property investing you benefit both from steady capital growth and from rental income. And as rental income increases over time it protects you from inflation. At the same time you can borrow money to buy property and despite Australia’s high taxation environment, property investment can be very tax efficient.
Read our article: Property Investment - Eight reasons why you should invest in residential real estate
How to retire on property
In the same way that there are many approaches to property investing in properties, there are also many ways to use property to retire wealthy (or early). In our article 3 Ways to Retire on Property we'll look here at three ways to do that, and the ins and outs of each, as well as examples of how an investor might use each one to retire.
Why Australian Property
Australia is an independent Western democracy with a population of more than 20 million. And it's one of the world’s most urbanised countries, with about 70 per cent of the population living in the 10 largest cities.
It is the world’s largest island, only slightly smaller than mainland USA or about 20 times the size of Japan. Australia has one of the strongest economies in the world, with almost two consecutive decades of growth and the unemployment rate falling to generational lows. As a result of nearly three decades of structural and policy reforms the economy is flexible, resilient and increasingly integrated with global markets. The strength of Australia’s economy has been highlighted in recent years by its ability to withstand a number of internal and external events.
Add to that the fact that Australia’s population is estimated to increase by some 60% to around 34 million people by the year 2050 (see article on Australian Demographics) and you'll start to get an idea why investing in Australian real estate is a good idea.
Inspirational Stories
Property investing in the face of changing demographics
You may ask, why bother with something as boring as demographics. It’s simple really, the property market, just like any free market is driven by economics, by supply and demand. And as an investor you can work on the supply side of the equation, but there is precious little you can do about demand. You can however do your utmost to understand what the demand is now and how it is likely to change over time. Read our article Property investing in the face of changing demographics
The Australian Property Market
Property prices in Australia tend to move in cycles and historically they have done well, doubling in cycles of around 7 - 12 years (which equates to about 6% to 10% annual growth). We all know that history is no guarantee for the future but combined with common sense it's all we have. There is no reason to think that the trends in property of the last 100 years would not continue for the next few decades, but to be successful in property investment you must be prepared and capable to ride out any intermediate storms in the Australian Property Market.