Should You Invest in Property and Buy a House?
Buying a house vs investing (Investing in property) vs investing somewhere else
NSW’s growing population presents an exciting opportunity for those interested in property investments. With the right property and a well-researched investment strategy, buying a house can lead to a reliable income stream. First, it’s essential to learn more about the nature of property investments and where to find the best opportunities in Australia.
Why Invest in Property Over Stocks?
Investing in stocks has been the traditional route for investors worldwide. However, buying real estate is a fantastic alternative for those hoping to acquire a long-term passive income. There are pros and cons to both options, though property investments have the unique advantage of being an inflation hedge.
This type of investment protects investors from a decrease in the purchasing power of money. This is in stark contrast to the volatility that comes with investing in stocks. Stocks can be influenced by market, economic, and even political factors outside the investor’s control. Real estate investments also come with the ability to leverage some tax advantages. Selling stocks, on the other hand, can lead to paying large taxes.
Things to Consider Before Investing
There are some factors you should consider before deciding to invest. This will help you determine if this type of investment is realistic for you financially and logistically. Things you should consider before investing in property include:
- Initial Capital: Purchasing a home requires more initial capital than putting money into stocks. Leverage will help you acquire a sizeable loan, especially if you have excellent credit. However, you want to avoid taking on high levels of debt, as the interest you’ll pay over the years could surpass your profits.
- Location: Buying property in a city or town with a population decline is unlikely to yield any profits. If you’re trying to find homes in NSW, for example, we recommend consulting a knowledgeable NSW realtor to find the best opportunities.
- Profit Opportunities: How do you plan to profit from this property? Will you use the home as an Airbnb or lease it to tenants? If so, how many tenants do you want to have? These are things you should plan out ahead of time.
Why Invest in Property in NSW?
There are many benefits of living in NSW, from its comfortable weather to its gorgeous natural landscape. This has led to a constantly growing population, which is largely what makes buying a home in NSW such a safe investment. Current population projections show that NSW is expected to grow on average by 100,000+ people annually until 2041. This comes as little surprise, as NSW is home to Sydney, the country’s most populous and multicultural city.
Sydney has many overseas-born residents, which increased by nearly 1 million between 2011 and 2016. The housing market is only going to become more competitive as NSW welcomes more people from across the country and beyond. As a result, some people may struggle to find homes in NSW, which will increase the demand for rental properties.
That being said, some of NSW’s most promising investment opportunities lie outside of Sydney. Byron Bay and Orange, for example, have two of the best-performing property markets in the country. Many are opting to work remotely or commute to the big cities while living in smaller towns, as they’re generally more affordable and closer to nature.
We’ll Help You Find the Perfect Property
Our team of real estate agents in NSW has the market knowledge, connections, and industry experience necessary to find promising homes for you to invest in. We’d also be happy to answer any questions you have about NSW’s property market or property investments in general.