6 Ways To Make Money By Investing In Apartments
Go to any investment property consultant, and they will tell you that the average return on real estate investments is 10%. Of course, the number varies with numerous factors like when the property was bought and how long you kept it.
However, the number can even soar up to 100-150% with the right property and investment strategy, especially if you’re investing in an apartment in Sydney.
Real estate is one of the most attractive investments, no doubt. But investing in Sydney is synonymous with building your nest egg effortlessly. En route to expansion to become one of the biggest metropolitan hubs, you’ve got your hands on the jackpot if you know the right property here.
The turnovers on apartments in Australia are gradually getting higher than in residential real estate. However, simply investing in an apartment won’t do magic. There are numerous things to keep in mind. More importantly, there are different approaches to make your investments fruitful.
So, given below are the six ways to make money by investing in apartments.
Invest Long Term
The real reason that so many who enter into real estate do not succeed is simply that they lack patience.
Buying property in Sydney or anywhere in Australia is a huge investment, especially when it comes to apartments. You need to remember it’s a fixed asset that you won’t reap the benefits of for years to come.
Many who invest in real estate sell their properties too soon. This prevents the property from maturing slowly over time and even producing double or triple profit margins.
When investing in apartments, keep telling yourself that real estate is a waiting game with a huge windfall gain for those who play it right.
Be Financially Secure
With the world coming to its post covid new normal, the Australian markets have started to pick up. As a result, people are looking forward to investing now and immediately.
Undoubtedly, with the market reviving and prices rising, there is no better time to invest than now. However, waiting until you are sure you want to invest is one of the best decisions.
It might not seem like a “method” to make money by investing in apartments. But not following it can land you in deep quicksand, even if you do everything else correctly.
Ensure you are financially secure when buying an apartment to foolproof your purchase. No one wants to invest in real estate only to sell it the next year due to the inability to meet mortgages.
Thus, it’s better to approach an investment property consultant, understand your situation and finance your investment accordingly.
Location
Location is one of the major drivers of property appreciation. Therefore, choosing emerging neighborhoods is one of the most profitable ways to make money through investments.
The concept behind this is pretty simple. You purchase land for cheap and wait for the community around it to develop. This leads to an increased worth of your property.
Thus, you get all the perks when you sell the property without investing any further into the development of the surrounding land.
Another important factor to remember is buying an apartment in an amicable locality. This includes areas with quality schools, proximity to offices, shopping complexes, etc. Comfort with luxury and convenience is expensive yet highly sought-after today, which brings the ball to your court.
Renting The Property Out
Real estate is not a dead asset. You can make money from it by renting it out to tenants! On average, you can make at least 5% of the property price every year through this method.
Real estate is the gift that keeps giving. Any investment property consultant would tell you that, on average, you can make back your investment through the rent in about 15 years or so.
However, 5% is just the base as far as rent goes. You can increase the rent price depending on how quickly the neighborhood is developing. As a result, you can even make it all back in 10 years!
In fact, if you leverage your properties in such a way, your tenants will end up contributing to your monthly mortgage payments. Therefore, you will get the property practically for free.
Flipping The Property
In 2017, 5% of the real estate re-sales occurring in the major capital cities across Australia were just “property flips”. This percentage is half of what was achieved in 2002. But if you have a strong strategy, you might have a knack for flipping the property.
The concept behind this model is to purchase one or two apartments in a state of disrepair but surrounded by emerging neighborhoods. The investors then spend the next 3-4 months renovating the property and giving it new interiors to make it more attractive to customers.
At the end of the remodel period, the apartments are sold for 20-30% more than the overall cost incurred over the property. This, however, is just the starting point.
Some investors have managed to sell houses for double the initial worth with the assistance of the right property consultants in Sydney.
Appreciation & Inflation
Appreciation refers to the increase in monetary value over time. A lot of people use the term “appreciation” with “inflation” interchangeably. They do go hand in hand; however, they are two different concepts.
For example, at an annual rate of 10% inflation, the Australian dollar has the purchasing power of 90% of what it could buy the previous year. Inflation and natural economic appreciation go together to make sure your property’s value only increases year after year.
It’s better to consult a property advisory firm to understand how appreciation and inflation could affect your property and build strategies to maximize the benefits.
Conclusion
While investing in real estate can be a tricky play, reaching out to a property advisory firm will help you to a great extent. Quarter Acre is a research and data-based investment property specialist in Sydney, well-versed with all the ins and outs of real estate in Australia.
Be it helping investors with their decade’s worth of experience or first-time home buyers. Quarter Acre provides exemplary customer service and real estate consultancy.
