Top 10 Property Investment Tips in 2024
So many Australian property markets are booming right now and it isn’t stopping in 2024!
And there is plenty of money to be made – if you know what you’re doing.
But of course, so many experienced investors are aware of the potential leading into next year.
In order to get an edge over the investment real estate competition, you’ll have to make the extra effort to set yourself apart from the crowd.
We’ve outlined some quick property investment tips that so many other investors won’t be doing.
This way you can go into 2024 with that little bit of extra knowledge which might be the difference between success and failure.
1. Consider Short-Term Renting
In order to combat vacancy rates it might be worth considering renting out your property through Airbnb.
This is especially worth considering if your property may be in a desirable location, such as on the coast or near a tourist hotspot.
If you’ve been struggling with vacancy rates and are expecting this to continue in 2024, then a short-term option may be a good way to continue making money from the property.
This offers a flexible alternative to long-term leasing, especially if you’re considering using that property yourself.
Of course, it isn’t ideal to combine investment and pleasure, but if it does make the prospect of investing more desirable, then Airbnb makes it possible.
2. Buy Under Market Value
The stock market is an efficient market – this means that most people are equipped with knowledge and trying to make money.
The real estate market is different.
The property investment market is 30% investors, and 70% highly emotional owner-occupiers.
Owner-occupiers are looking for that dream home, which they can move into ASAP.
An investor is looking for a vehicle to make passive income.
Let’s say the seller wants a three month settlement. Not many owner-occupiers will be willing to give that three month settlement.
But you, as an investor, are.
Because of this, you might offer a lower price on the house than the owner-occupier. The seller may still be willing to make the trade because you’re willing to give that three-month settlement.
This is a great way to buy under market value, make money on the way in, and get the edge over the owner-occupier competition.
3. Focus On The Plan
With so much happening around the world, It’s unlikely that there will ever be a perfect time to invest.
There are always ups and downs in the economy, as a result of the changing circumstances in Australia and overseas.
It’s important to stay focused on your plan and work within the timeframes you’ve set for yourself.
Irrespective of what is happening in the economy, Australia and the world, you’ll always need to manage your finances and figure out ways to earn financial freedom.
But there are so many out there who will lose this focus and let their investment journey become derailed by these external factors.
It’s important to stay focused on the plan and look for ways to execute that plan at the opportune time, which can be a major difference between you and everyone else looking to buy property.
4. Broaden Your Horizon
Around thirty years of data suggests that there is negligible difference between capital cities.
If you’re only thinking of buying in Sydney and Melbourne because everyone’s talking about population growth and job creation, the data suggests others.
Don’t just focus on these capital cities.
Most of the noise that you hear in property circles is that it’s best to buy in these capital cities and as close to the CBD as possible.
These are just myths, with data completely proving them wrong.
Don’t follow the crowd in 2024, expand your horizon and look beyond those major capital cities.
5. Have An Exit Strategy
While this tip won’t necessarily help you get ahead of the competition, it is definitely worth having a think about an exit strategy, especially for those properties that aren’t meeting your needs.
Consider what your goal is in ten years’ time – what do I actually want to get out of investing?
Property investing is a vehicle for some outcome in the future.
Assess whether this property fits into that strategy for the future.
If it doesn’t, don’t be emotional and hold onto it just because you already have it.
6. Know The Reason You Want To Invest
Investing in property is a big financial decision.
It can launch you into the future you’ve always dreamed of.
It’s important to know why you want to invest in property, prior to getting caught up in the hype of certain areas, as well as what others are saying.
Think about what you’re trying to do – it may be retiring early or spending more time with your family.
Once you have that reason, it can be a lot easier to become committed and put in the hours necessary to succeed as an investor.
So many investors won’t have that reason, that drive, and will not put in the time and effort for self-education.
As a result, they’ll inevitably get caught up in the hype that is often spruced by the wrong people.
Having that concrete reason not only helps motivation, but can also aid your property development strategy, which is all about knowing what you want to achieve and by when.
7. Don’t Invest In Isolation
A lot of people may often hear about past investing success in certain areas and feel that this success can be repeated.
But the fact is that you can’t look at a certain period of history in isolation.
Avoid recency bias and basing your investment decisions on where and what people have previously had success with.
Step back and understand the cycles of different capital cities and regional areas, so that you can make informed decisions and invest in areas with upcoming potential.
While so many others will look to invest in areas that had success prior to 2024, you’ll get an edge on the competition by looking at the data and seeing where the future of investing is.
8. Make Sure Your Placing Value On The Land
While it may seem like investing 101, it’s important to keep in mind: land appreciates in value. Not the building.
You’d be surprised how often people get swayed into buying the newest homes, or places with the fancy bells and whistles.
Don’t follow this trend, and make sure you’re buying property based on the value, or potential value of the land.
It’s a good real estate investment idea to buy property where the land is 60%-70% of the purchase price.
This also means trying to buy townhouses and houses over apartments and units.
Investing in the latter means you’ll be buying a tiny fraction of the land that unit or apartment complex sits on, rather than the entire lot of land you get when buying a house.
Units and apartments are becoming increasingly popular, and it’s unlikely that this will be any different heading into 2024. Don’t fall into the same trap!
For more advice on the house versus apartment debate, check out the video here:
9. Don’t Outsource Property/Suburb selection
For those looking to break into investing, all the talk of data analysis can quickly become overwhelming and the temptation to outsource this task can be tempting.
Don’t be one of these people.
Property investing can be done almost entirely on your own – with a little bit of time and self-education.
Taking the time to properly understand the data and doing it without the help of a buyers’ agent can save you fees and unnecessary costs.
But the biggest advantage comes when you are going to buy your second, third, or fourth property.
If you outsource the data analysis and avoid developing your own education, you’ll be stuck paying buyers agent fees for every property.
Invest in your education for the first property, and you’ll have that knowledge each time you go to purchase another.
This can save you a lot of money in the long-run and give you an edge over the people that choose to outsource this phase of investing.
10. Maximise Your Borrowing Capacity
Let’s say you buy multiple properties in your own name. You might find you quickly hit a borrowing capacity maximum, as your income is not servicing the amount of properties.
A great tip to circumvent this is by buying each and every property in a separate trust.
But make sure the property is paying for itself after all outgoings.
When it comes time to buy the next property in the next trust, the banks almost discount any debt in the proceeding trust.
This can help you continue investing and building your portfolio, while other investors may be prevented from doing so.
The bottom line…
There is no shortage of real estate investment tips and tricks out there that can help you get the leg up on the competition.
But it’s important to only adopt real estate investment advice when it applies to your circumstances and works for what you’re trying to achieve.
Property investing is a competitive industry, so arming yourself with as much property investment advice will only benefit you getting ahead of the competition in 2024!