4 Ways To Make Property Profits in Sydney’s West
There are 4 ways to make money out of property investments in Sydney’s West and most of the time they only look at one or two of these. Let’s look at them.…
1. Passive Appreciation
That’s when the property value goes up in line with the general property market and over time well located properties in Australia in good positions, double in value every 7– 10 years.
2. Active Appreciation
This is when you add value to your property. For example if you buy well, when you buy below market price and revalue at the correct figure, or when you renovate or redevelop your property.
3. Rental Return
Rentals from property provide cash flow, but this is only one component of your overall investment return.
4. Tax Benefits
It has often been said that it’s not how much money you make that is important, but how much you keep after tax. In their simplest form these are things like depreciation allowances.
But investors who own a number of properties and have a “property business” can take advantage of some interesting ‘tax loopholes’ only available to business owners.
To invest in a top performing property you need a balance of all four of the above elements. Don’t focus too strongly on cash flow. This is because well located residential properties are inherently high growth, low yielding investments. You really can’t get high growth, high yielding residential properties without taking a risk.
The investors I have come across who have been the most successful in the long term, and have done so safely and without speculating, are the ones who bought quality properties in good locations and allowed them to grow in value. They bought them for their strong capital growth and they never or rarely sold their properties. Instead they would refinance their investments as their equity increased.
The lesson one can learn from these successful investors is to buy the best quality properties you can, in the best location you can reasonably afford and never sell them.
If you don’t understand any of these terms used in this article please go to our definitive real estate definition guide
About Jhai Mitchell
Jhai is an award winning Internet Marketing Real Estate Agent for Elders Toongabbie and Kings Langley. After running his own internet marketing business he has now set his own sites for the real estate industry. He observed that 90% of real estate agents did not know how to market themselves online. Jhai is now fixed on one goal. To teach real estate agents that they can market online so much better than they currently are.
Since then he has been consistently quoted in the Sydney Morning Herald and Real Estate Business online. He is a regular guest blogger on TheHomePage.com.au, sharing his expertise of marketing aspects for the Real Estate Industry. His biggest passions are his wife, martial arts, dogs and most of all property.