Property investing can help put you in a better financial position, but you need to research. A good principal with any type of investing is to make sure you know and understand whatever it is that you are putting your hard earned money into.
One big plus about property investment is that it is something that most people know very well. A good principal with any type of investing is to make sure you know and understand whatever it is that you are putting your hard earned money into.
Although most people have had some experience in renting or owning a property, in order to invest in property, the more you know and understand, the better chance you will have at succeeding.
Our FREE eBook: Property Investing discusses what you need to know in detail.
As you can see from the table above, it’s common for residential property prices to shoot off like a rocket, then hit a brick wall and go nowhere for a while. That’s largely related to the psychology of the general public as purchasers. In the euphoria of a property boom, demand for property takes off. Quality properties have limited supply, so the law of supply and demand takes over and prices lift. But towards the end of the growth cycle, they may actually overshoot their long term value. This is what is described as a property bubble. Typically it’s not large enough to burst and make prices drop in a huge way, but there may be a bit of a negative blip.
With fewer properties being purchased the supply increases. Low demand and high supply allows the prices to stagnate. They stay that way until gradually increasing demand begins to nudge them up again. While the boom ends abruptly, it’s a slow acceleration for the prices to take off again. None the less, historical property cycles have been remarkably free of large “dips” and in their place have what is more like a “plateau.” While history is no guarantee of the future, it’s one of the primary things we have to go on.
Where do you start?
A good thing to do right now is to have a chat with a professional who can answer any questions you may have. The friendly, experienced credit managers at State Custodians will provide helpful information without the pressure of committing and by the end of the conversation you will have a better understanding of what home loan would suit you the best. Give them a call during NSW business hours on 13 72 62 or drop them a note using an enquiry form.