Invest In Residential Development
Why Invest In Residential Property
Residential investment property is one of the safest methods to increase your wealth. There are several reasons why, but let's take a look at just a few.
Long Term Returns
Property investments are a secure way to ensure your wealth portfolio grows. Residential property continues to outperform stocks in the long term and property price cycles in Australia typically double every 7-12 years.
Low Volatility
While property values are still subject to ups and downs, the real estate market is far less volatile than the share market. Residential property investments offer a much higher level of security: just ask any bank.
Lower Investor Domination
The share market is dominated by investors. However, if the share market falls, people still need a place to live. In simple terms, when the share market is down, property prices are usually in a growth stage.
Statistics show that home ownership is steadily decreasing as prices continue to rise; fewer people are able to afford their dream home. A supply of good quality homes will always attract tenants.
Residential x Commercial
Residential property investment may seem like the second-best choice, but let's look at some facts.
Commercial
- Maintenance and running costs are much higher e.g. rates, elevators, air conditioning.
- Location values change over time. A new motorway may eventually increase business, but the noise and pollution during construction will drive customers away or a brand new shopping complex will lower the value of nearby street shops.
- Financial security is costly- to ensure continued tenancy, purchasing a large complex with many tenants is required.
- Ongoing costs such as property management firms and commercial agents.
Residential
- More secure growth; residential properties rise steadily while commercial properties experience bigger (and more) ups and downs.
- Good locations remain good locations, especially in the inner city.
- Banks are more willing to lend money (and more money!) for a residential property investment.
- Fewer and less expensive ongoing costs.
