Investment Property Buyers Agent
David Hancock – Binnari Property Director
Investing in Australia with a buyer’s agent
For property investors, working with a buyer’s agent (also known as a buyer’s advocate) can be an effective way to streamline the process, source the right property at the right price, and take the stress out of the purchase.
A buyer’s agent or buyer’s advocate will typically work with buyers to find their suitable home. In the case of property investors, on the other hand, the process is a little different.
Prpoperty investment advisory firms, like Binnari Property, are like investment property buyers’ agents. They specialise in working with property investors to source investment properties.
Like a buyer’s agent, Binnari Property undertakes research into Australian property markets, conducts due diligence on exclusive properties and ultimately matches property investors with investment properties that meet their property strategy.
What is a buyer’s agent (buyer’s advocate)?
A buyer’s agent or buyer’s advocate is an agent who works on behalf of the property buyer instead of the property seller. They source potential property purchases for property buyers, including off-market properties, negotiate deals, bid at auction and otherwise hold the buyer’s hand throughout the process.
A buyer’s agent supports clients who are time-poor, lack knowledge of the particular property market in which they want to purchase, or are new to the process.
In the case of investors, an investment property buyers agent or property investment advisory firm like Binnari Property, will help investors source investment properties to build their property portfolio or find their first investment property.
What’s the difference between a buyer’s agent and a real estate agent?
A buyer’s agency or buyer’s advocate represents the buyer, whereas a real estate agent represents the seller.
A buyer’s agency works on behalf of home buyers to identify suitable properties for purchase. They are paid by the buyer.
A real estate agent is responsible for selling a property on behalf of the seller, which includes handling marketing, holding open house inspections, and attracting potential property buyers. They are paid by the seller, typically by taking a percentage of the sale value.
Unlike traditional buyers agents, Binnari Property is paid by the seller rather than the buyer. Binnari Property collects a fee that would otherwise be paid to the local selling agent. That means there are no costs to the investor.
How do investment properties work?
Investment property is a key function of our economy because it provides a vehicle for people to invest their money to create future wealth. Just as importantly, investment properties provide access to additional rental supply for those who require housing but don’t have the capacity to buy a home.
Having a pool of rental properties is an essential aspect of any economy. Without property investment, there would be no rentals available. Currently, in many parts of Australia, there is an undersupply of rental property. Greater property investment in new housing supply adds additional homes to this essential pool of rental properties.
The way property investment works is that an investor will purchase a property and then rent out that property to someone for a rental income. This will generate what is known as a rental yield for the investor. The rental yield is the total income you receive as a percentage of the property value and will typically sit around 3-6%.
The property investor is responsible for meeting the running costs of the property, including maintenance, property management fees and interest paid on the home loan. If expenses exceed rental income, the property is considered to be negatively geared. Investors receive a tax break on negatively geared properties to incentivise investment. For new properties, investors also receive a tax deduction called depreciation. This offsets the decline in the value of the property as it ages. It’s not uncommon to see an investment property that breaks even or is even cash flow positive thanks to the tax incentives.
What’s an investment-grade property?
“Investment-grade” property typically refers to properties that are built and targeted at investors only. This can lead to developers taking shortcuts with certain factors like size, access to natural light or finishings because they expect the investor to be less discerning since they won’t be living in the property themselves. These properties can also be located in over-supplied investor hotspots where supply outstrips demand, which places downward pressure on property values.
At Binnari Property we avoid “investment-grade” properties and instead seek properties that appeal to local owner-occupiers. This attracts tenants, ensures lower vacancy rates, and improves capital growth prospects as these properties tend to be in areas that have higher local demand and limited supply.
There are certain factors that will make a property a worthwhile investment. These include:
- Where is the local property market in its property cycle—i.e., is it growing, stagnating, or declining? For example, Sydney could be booming while Brisbane is stagnating, or vice versa.
- Migration into the area will influence whether demand outstrips supply
- Infrastructure development which can attract investment and stimulate the job market
- Areas with low supply and high demand from local owner-occupiers
- Areas with a high proportion of local owner-occupiers and a limited number of rental properties
- Livability factors that include close proximity to transport, schools, cafes, shops and employment, which can attract demand
- Owner-occupier grade properties – i.e. if owner-occupiers are attracted to the property, this is a good indication of strong rental and resale demand.
What is a good ROI for an investment property?
ROI (return on investment) on investment property is determined through various factors depending on the current performance of the local property market and the length of time the investor intends to hold the property. Factors can include:
- Rental yield. Typically, 3-6% is the goal.
- Costs to hold the property – Some properties might have higher running or maintenance costs than other properties. This can impact the overall annual expenditure and, therefore, can impact the ROI.
- Capital growth returns.
Keep in mind that ROI depends on the objectives of the investor. If an investor was aiming to build wealth through capital growth, then they may be less concerned about property cash flow then overall capital growth returns over the long-term.
How does a buyer’s agent identify investment-grade properties?
A savvy buyer’s agent won’t source “investment-grade” properties but rather will look for properties that appeal to local owner-occupiers as well. This is a great indication as to whether tenants will be willing to live there. For example, this could include the availability of natural light, the garden, the size of the home, or the location of the property (i.e. not on a main road). Even if an investor compromises on these things and still finds a tenant, the chances are the tenant has only chosen to live there for affordability reasons, which means as soon as they can afford to, they will move out, which will result in additional costs to re-tenant the property.
Alternatively, if an investor buys a house in a good school catchment area with a nice garden, good natural light and large rooms, then the chances are a family will rent it and will be unlikely to want to move out any time soon. The lower the tenant turnover, the better it is for the investor, as the property won’t remain vacant for stretches of time and not attract income. A property like this is also far more likely to have a higher resale value.
An example of an “investment-grade” property is two duplex properties on one title in a regional area. While these properties may attract a reasonable rental income, when it comes time to sell, they are likely to appeal only to investors, which could impact capital growth returns.
Another example of an “investment-grade” property is an apartment that appeals to students. It may be small, with limited facilities and natural light. This may be fine for a student for 12 months, but they’re not likely to want to make it their home for the long-term. This can work fine if there is a steady supply of students to the area, but the property isn’t likely to achieve the natural growth of a larger two or three bedroom apartment which will appeal to a broader audience.
How can a property buyer’s agent help?
They add value in several ways:
- Relationships with real estate agents to access off-market properties or gain an early advantage
- Ability to negotiate with real estate agents
- Guiding the buyer through the process end-to-end
Binnari Property undertakes a similar process as a buyers agent, but for property investors sourcing new Australian properties. We get to know the investor’s requirements and identify the best property options that meet their investment criteria.
Like a buyer’s agent, Binnari Property finds the best property options for the investor and ensures the investor’s decision is grounded in the facts, not emotion. Binnari Property conducts extensive research into property markets across Australia, providing hard data to support the investor’s decisions.
One of the pitfalls of buyer’s agents is that they tend to specialise in one specific location, such as certain suburbs in Sydney, Brisbane, Melbourne or Perth. This can be advantageous for homebuyers looking in a particular area but not for investors who will usually need to look further afield. If you look at property price growth across the capital cities, it tends to vary significantly in the short to medium term. There will be variations in the stage of growth of a particular market. For example, while the Sydney market may be stagnating, the Brisbane market could be booming, and vice versa. This means that investors need to take a national view to find the right property at the right price rather than limit themselves to one particular market.
Binnari Property conducts nationwide research into the macro and micro factors that impact property markets, including interstate migration, job growth and affordability, to source suitable investment property options.
Should I use a buyer’s agent for buying an investment property
For time-poor investors building a property portfolio or those investing in their first investment property, working with a property investment advisory firm like Binnari Property – which is like a buyer’s agent for investors – can be the best solution.
Binnari Property sources new or off-the-plan properties on behalf of property investors. As property investment experts, we help investors secure the best possible outcome. We access off-market, owner-occupier quality properties, negotiate on behalf of investors, secure exclusive or early access to properties, and guide investors through the entire process. Our extensive research and due diligence ensure that you are equipped with the best property market insights, maximising your chances of creating wealth.
Residential investment property
Investing in residential property in a growing market can be an excellent investment. Residential property tends to have higher capital growth prospects and lower vacancy rates because tenants are less likely to leave. Housing is a basic human need; we all require a roof over our heads. People will move heaven and earth before opting to move out of their home.
For investors seeking to invest in residential property, Binnari Property can help. We are experts at sourcing the right residential properties across the country with the very best investment potential.
Affordable investment properties
An excellent option for buyers who may be priced out of the market when it comes to buying a home in an area where they want to live, is to invest instead. This strategy, known as rentvesting—where you rent in the location you want to live and invest where you can afford—can help you gain a foothold on the property ladder, especially for those living in more expensive capital cities.
Looking for investment opportunities outside of where you live can often yield better results regarding growth potential and affordability. It can help you get on the property ladder far sooner as the deposit required can be less. This can be advantageous in the long-term when it comes to wealth creation.
Commercial property investment
Commercial property markets operate quite differently from residential property markets. While rental yields are usually higher, capital growth prospects are typically lower.
The risk carried by the investor can also be greater. Any time the economy is under pressure, business tenants may be forced to downsize or vacate their commercial premises, increasing vacancy rates. The shift towards hybrid and remote work has also had an impact in this area.
For property investors who opt to invest in commercial property it’s also important to keep in mind that there may be some upfront costs required for fit outs which is a common inclusion in tenancy agreements.
How does a buyer’s agent assist with the investment property due diligence
While a buyer’s agent will undertake due diligence when sourcing an investment property, this is likely to be limited to assessing any potential risks associated with the property, rather than other key investment factors i.e. is that local property market in a stagnant or growth cycle.
An investment property buyers agent, or property investment advisory firm, like Binnari Property, will take due diligence to the next level by assessing whether the property and location will be a suitable investment that will meet the client’s goals.
Binnari Property undertakes extensive research and due diligence into the fundamental macro factors that contribute to capital growth and rental yield outcomes such as employment in the area, migration and access to services.
We do all the hard work so you reap the rewards
Researching and sourcing the right investment property opportunities requires extensive hard work. It involves travelling interstate, viewing countless properties, meeting with local agents, speaking with residents and local businesses, understanding local planning rules, and researching market trends and local employment stats.
This kind of effort is typically impractical for time-poor investors, especially when purchasing a single property.
Binnari Property handles this work on your behalf, securing you the best property investment opportunities while saving you significant time. We travel to key investment hotspots every couple of weeks to identify potential opportunities and build key relationships, so you don’t have to.
Benefits of using a buyers’ agent for your property investment plan
While a buyer’s agent can certainly help investors find a property, they won’t provide the same holistic service offered by property investment advisory firms like Binnari Property.
A buyer’s agent adds value when searching for a property in a specific area, but they aren’t typically able to advise on which areas to invest in and whether the property fits with your personal investment strategy.
With a heritage in financial planning, Binnari Property will assess your strategy and identify how property investment will help you achieve your goals, sourcing the right opportunities to meet your wealth objectives.
Foreign investors and expats
As a foreign investor or expat, using a reputable buyers agent to source property makes sense as you may not be familiar with the local area and what to expect. A buyers agent can give you an immediate understanding of the local area and be your representative on the ground.
Similarly, Binnari Property serves a similar purpose when it comes to sourcing investment properties for foreign investors and expats. If your understanding of Australian property markets is limited or you can’t view properties in person, Binnari Property can help fill this gap, ensuring you source the right investment property opportunities. By having eyes and ears on the ground, you can make investment decisions like a local.
What are the key factors to consider when buying an investment property?
When purchasing an investment property, it’s essential to consider several key factors to ensure a successful investment. These factors include aspects like location, property type, potential rental yield, capital growth potential, and overall market conditions. Additionally, it’s crucial to have a thorough understanding of the financial implications, including mortgage repayments, property taxes, maintenance costs, and potential vacancy periods. Conducting thorough research, seeking professional advice, and understanding your risk tolerance are also vital steps in making informed investment decisions.
One way to gain a significant advantage in the investment property market is to enlist the services of a buyers agency or a property investment advisory firm like Binnari Property. We possess in-depth market knowledge and a vast network of contacts, providing you with access to off-market opportunities and valuable insights. We can save you considerable time and effort by conducting extensive research and filtering out unsuitable properties on your behalf.
Furthermore, our expertise helps you navigate the complexities of the buying process, protecting you from potential pitfalls and ensuring you secure the best possible property. By leveraging our skills and experience, you can significantly increase your chances of finding a profitable investment property and maximising your return on investment.
Investment property fees using a buyer’s agent
If you use a buyer’s agent to source an investment property you will need to pay a fee to the buyer’s agent. Typically this will be structured as an upfront payment on engagement followed by paying out the balance once the property settles.
A buyer’s agent is required to solely represent the buyer’s interests and, therefore, cannot receive any form of payment from the seller. Accepting such payment would constitute a conflict of interest and a violation of professional standards.
While engaging a buyer’s agent will mean you will be out of pocket, if the ROI on the property investment is good, then the cost will certainly be worthwhile.
On the other hand, Binnari Property operates on a unique fee model where our compensation comes from a commission from the seller. This commission is not passed on to you, ensuring you pay the same purchase price for the property as any other local buyer. Consequently, engaging Binnari Property’s services comes at no additional cost to the investor.
Buyer’s agents provide investors with an edge
Engaging a property buyer’s agent or property investment advisory firm like Binnari Property offers numerous benefits, including being able to leverage their market insights and expertise, identifying cost-saving opportunities and maximising value, gaining exclusive access to off-market listings, benefiting from their negotiation prowess, streamlining the buying process to save time and reduce stress, and ultimately empowering you to make informed and confident property purchase decisions.
Is it worth investing in Australia?
Australia continues to be an extremely attractive proposition for investors thanks to our high standard of living, stable democratic government, strong job market and sound infrastructure pipeline. With low supply and strong demand, especially through overseas migration, many Australian property markets are growing quickly, with low vacancy rates and strong rental demand.
Which suburbs are worthwhile investing in?
The key to property investing in Australia is to understand that the Australian property market is made up of thousands of micro property markets. One suburb won’t perform the same as the next. One of the things that sets Binnari Property apart is our ability to research and understand how different suburbs will perform.
Often, one property market will be booming while others will be stagnant, and vice versa. For example, there tends to be an inverse relationship between Sydney and Brisbane property values. When Sydney hits a pricing peak, Brisbane will start to increase as residents leave Sydney in search of cheaper properties. That will drive up Brisbane property prices until that market hits its peak.
A buyer’s agent will be limited to the suburbs in their local remit rather than examining market growth cycles. They can’t usually tell you how properties in their local area might compare to properties in other markets. This is where Binnari Property gives you an edge. We identify which locations are worth investing in and when. By undertaking extensive analysis of the growth cycles of micro property markets, we can identify the right opportunities at the right time.
Investing in the cities outside sydney
Investing outside of Sydney is often an excellent strategy as it will widen the pool of potential investment opportunities. Limiting yourself to investing in Sydney may mean you miss out on investing in an area with more growth potential. For example markets like Newcastle, Wollongong and Brisbane all have different growth cycles than Sydney, so they may be a better investment depending on what growth cycle they’re in.
Strategies for successful property investors:
To successfully invest in property and secure a return on that investment, it’s important to be strategic. There are several strategies a buyers agency or property investment advisory firm like Binnari Property will undertake to maximise your chances of success including working with you to set goals, sourcing the right opportunities for consideration, assessing those opportunities, undertaking research to create a shortlist and appraising properties.
Any property investment should form an important part of your broader financial strategy and hence needs to meet the goals of your financial strategy. Firstly, you need to understand if an investment property is the best asset class to invest in or whether you’re better off pursuing a different strategy like buying a home or paying down your mortgage. It all depends on what your financial goals are. Next, you need to consider the costs of holding the property, your borrowing capacity and any tax incentives and implications.
A unique advantage of partnering with Binnari Property is that our team has a background in financial planning, and we can help you partner with expert financial planners. We prioritise your financial well-being and will never push you towards a property that doesn’t fit within your broader wealth and investment strategy. Our commitment to ethical practices ensures that we always act in your best interest, helping you achieve your long-term financial aspirations.
A buyers agent or or property investment advisory firm like Binnari Property will source suitable investment property opportunities for you. The sourcing process involves a combination of research, assessing the options and creating a shortlist.
A buyers agent will assess the value of investment property options in their local remit based on certain characteristics like dimensions of the property, desirability of the street and suburb, and whether the property meets certain criteria you have set (for example, has a pool, has water views).
Binnari Property takes this assessment process much further by uncovering the quality of the investment by undertaking research into the location to assess potential ROI.
Binnari Property’s research is geared around building local knowledge. We will visit the area, speak with locals, view properties and meet with developers and agents. Most investors don’t have the time to do this, so working with an investment property advisory firm like Binnari Property saves a lot of time.
We also undertake research into property growth cycles, employment statistics, net migration into the area, infrastructure spending, local council approvals, supply of properties, vacancy rates, proximity to transport links, shops, cafes, restaurants, schools and hospitals, and owner-occupier appeal. These factors all influence whether a property will be a worthwhile investment.
Once we have undertaken extensive research, we will compile a shortlist of property options that meet your needs and that we are confident have excellent investment potential.
As part of our end-to-end process, we also develop an investment property strategy with you and your advisers to identify your needs and ensure your overarching financial goals are being met.
Appraisal is an important part of the property purchase process. This will enable you to buy the right property at the right price. In many Australian property markets currently there aren’t a wide range of bargains to be found, given supply is so tight. However, that shouldn’t mean you should overpay. The appraisal process will value the property by comparing it to similar sales in the area and other factors, ensuring you have an accurate idea of the property’s current value.
We have extensive relationships with agents, enabling us to secure the best price for you as well as negotiate additional benefits such as securing the apartment with the best natural light or larger outdoor space.
While in the current market conditions there isn’t always significant scope to negotiate because of strong demand, one way to extract additional value is to buy an off-the-plan property before it’s been released. This can enable you to secure the best property that is unlikely to be available for sale once the property has been fully built.
At Binnari Property we’re able to secure exclusive opportunities before anyone else, helping you access the best opportunities for creating long-term wealth.
How do I choose the right buyer’s advocate in Australia?
When selecting a buyer’s agent or or property investment advisory firm like Binnari Property, the key things to consider are:
- Integrity – Does the firm operate ethically and avoid conflicts of interest?
- Experience – Does the firm have extensive experience?
- Process – What is the firm’s process and how comprehensive is it?
- Track record – What is the firm’s track record of success and is this substantiated through client testimonials?
Who is the best buyers agent in Australia?
There are great buyer’s agents across the country, but ranking them is almost impossible. This is because they all specialise in their specific local areas, so the better question is, “Who has a track record of success in the local area?”
When it comes to an investment property buyers agent or property investment advisory firm, the best way to select a firm is to consider their track record and client testimonials.
Work with Australia’s property leader
Binnari Property is a leading Australian property investment advisory firm, helping investors source newly built or off-the-plan properties.
When purchasing an investment property, there are certain advantages of working with us over a typical buyer’s agent. This includes:
- We provide you with access to multiple property markets, not just one
- We help you establish an investment strategy with your advisers
- You don’t pay a cent as we’re paid by the seller
- We help you invest like a local.
Unlike a buyer’s agent, Binnari Property has in-depth market knowledge across many micro property markets, giving investors access to the most up-to-date and relevant market information to inform their investment decisions.
This includes a deep understanding of the property fundamentals which influence whether an investment will attract capital growth and strong rental yield. These factors are influenced by interstate migration, infrastructure development, employment, services, schools, transport, walkability and proximity to restaurants and entertainment.
Binnari Property is a trusted partner to property investors with a strong track record of success. We always operate ethically and secure fantastic results. Our track record speaks for itself.
As property investment experts, we have a comprehensive suite of services on offer. We undertake extensive property research and due diligence, source suitable investment options, provide exclusive and private access to properties, and support investors right through to settlement.
Binnari Property has a reputation for exceptional service, responsiveness and support. We are your trusted partner in the property investment process and will step you through the process from end-to-end to get your investment over the line.
Unlike a buyer’s agent who specialises in a specific local market, we have expertise across multiple micro markets. Coupled with our heritage in financial planning and investment strategy, we offer tailored property solutions to meet your investment goals. We source the right investment property in the right area to meet your investment strategy.
Your goals are our goals. We take the time to understand your investment objectives – whether that be to save for retirement, buy a house, or to fund private schooling – and secure the right investment property to meet those goals.
For time-poor investors or those that are new to investing, trusting us to handle the investment property process provides peace of mind. By trusting the process to the experts you can secure the very best opportunity without needing to spend extensive time on the process yourself.
Services we offer
At Binnari Property, we provide a range of services for property investors, including assessing the needs of the client, developing a property investment strategy, property research, property due diligence, creating a shortlist of suitable properties, accessing off-market properties, accessing off-the-plan properties, sometimes exclusively, assisting with the property reservation process, strategic advice and guidance, supporting clients through the settlement process and assisting clients to appoint property management to find tenants for their investment properties.
Property investment strategy development
With a heritage in financial planning we are experienced in developing and executing investment strategies. We work with you to create a tailored property investment strategy that complements your broader financial strategy, ensuring your investments meet your goals.
Property investment advisory
As a property investment advisory firm, at Binnari Property we provide you with trusted and research-backed property investment advice. Unlike a buyer’s agent, our scope moves beyond just sourcing investment property options and is underpinned by extensive property market research.
Investment property buyers agents
Binnari Property is like your investment property buyer’s agent. We specialise in working with property investors to source investment property. However, unlike a buyer’s agent, our advice is backed by extensive research into multiple property markets, and you don’t need to pay a cent!
Market insights and updates
As property market experts we provide extensive market insights and updates to our clients so you can stay informed. These research insights underpin our approach and advice, ensuring we are able to deliver you the most up-to-date and relevant property investment advice.
How do I start investing in property in Australia?
Factors to look out for include:
- Stage of the property growth cycle that the local market is in
- Net migration into the area
- Infrastructure spending
- Low supply of properties
- Low vacancy rates
- Proximity to transport, shops, cafes, restaurants, schools and hospitals
- Owner-occupier quality properties
However, the only way to really understand these factors is to build local knowledge. For an investor in Sydney who is hoping to invest in Brisbane, Perth, or Melbourne, they will need to visit the area, speak with locals, view multiple properties, and meet with local sales and rental agents.
If conducting this level of research, including travelling interstate, is out of reach for you, a great first step for investing in property in Australia is to work with a property investment advisory firm like Binnari Property.
Our step-by-step process
At Binnari Property, our comprehensive step-by-step process involves:
1.Understanding your situation
We take the time to understand you and your financial objectives and get to know your property preferences.
2. Sharing our research philosophy
We take you through the Binnari Property research philosophy. We review examples of what to look for and what to avoid to become a successful investor, and discuss current property market cycles and trends.
3. Researching local markets
We undertake extensive research on market cycles and local markets including visiting those locations to gain local knowledge and insights.
4. Reviewing property options
We discuss and preview multiple property options that match your investment strategy. We undertake an in-depth analysis of each property option and why they were selected by the Binnari research team. We review supply and demand data, and demographic profiles of the specific locations.
5. Selecting the right investment
We assist you to identify the right property. We review and discuss the advantages and disadvantages of each property presented and take you through the estimated income and expenses of the property.
6. Reserving the property reservation and exchanging contracts
We assist you with the property reservation process and work with you and your nominated solicitor through the contract process. Our team will work through any questions you have through this process.
7. Providing regular updates
If you’re purchasing a property under construction, we’ll provide you with regular updates on the progress of your investment. We’ll also keep you up to date with regular property market updates and any key changes in the area you have invested in.
8. Guiding you through settlement
We’ll hold your hand through the entire settlement/completion process. Our client services team will liaise with your mortgage broker, assist with the hand over and inspection process, plus help you to obtain a tax depreciation report.
9. Renting out your property
We’ll work with you to appoint a local property manager to ensure your property is rented out as quickly as possible. We will keep in contact with your property manager to keep them accountable and to ensure you are achieving the best possible rental outcome.
Why pay disclosure is important?
Pay disclosure is important as it helps you understand if you’ll be out of pocket and if not, how payment works. A standard buyer’s agent is paid for by the buyer. In the case of an investment property advisory firm like Binnari Property, we are paid through a fee to the seller. This cost isn’t added onto the purchase price, so there’s no cost passed on to the buyer.
FAQs
Investing in real estate in Australia can take various forms, each with its own level of involvement and risk. You can purchase either residential or commercial properties, becoming a landlord and earning rental income.
If you’re looking to invest in a residential property, the key steps involve setting a clear budget and obtaining pre-approval for a loan, partnering with a property investment advisory firm or buyer’s agent if that’s your preference, identifying suitable properties that match your investment goals and risk appetite, conducting thorough due diligence on the property and its location, negotiating the purchase price and terms, and finally, securing the property with a formal contract and deposit.
Remember, it’s essential to factor in ongoing expenses like property management fees, maintenance costs, and potential vacancy periods when evaluating your investment’s potential return.
Before diving in, it’s crucial to conduct thorough research, understand the market dynamics, and seek professional advice from financial advisors or real estate experts to align your investment strategy with your financial goals and risk tolerance.
Australia’s blend of high living standards, political stability, robust employment opportunities, and planned infrastructure developments makes it a highly appealing destination for investors. The combination of limited housing supply and surging demand, fueled in part by record levels of overseas migration, is driving rapid growth in many property markets across the country, leading to low vacancy rates and high rental demand. This means Australia remains a great place to invest in property.
The simple answer is that it depends. Your return on investment will depend on various factors both internally including how large your deposit is, your ability to service a loan, current assets and current income, and external factors like market forces. The government doesn’t place any limits on what can be earned through property investment, rather it is driven purely by supply and demand.
One of the advantages of property investment is that you are able to make a much larger investment by borrowing from the bank. If you have $150,000 to invest, you can purchase a $800,000 property using your funds for the deposit and will immediately build equity on the total property value. Within 7-10 years, you may find that the property’s value has doubled, representing 5 times your initial investment. Of course, you need to factor in interest and other costs to hold the property, but that is still an impressive foundation for growing wealth.
Another benefit is that you can use equity in property to secure finance for additional property investments, meaning once you’re on the ladder, you can build a property portfolio, further enhancing your returns.
To make a property a good investment, focus on thorough research and due diligence. Choose properties with high growth potential, located in areas with strong infrastructure, amenities, and employment opportunities. Consider factors like rental yield, capital growth prospects, and potential for future development. If you don’t have the time to commit to the investment property research process, engaging a property investment advisory firm like Binnari Property can be a huge help
Additionally, maintain the property well to attract quality tenants and ensure its long-term value. It’s also important to be prepared for market fluctuations and have a long-term investment horizon to weather any downturns. Seeking expert advice early from financial advisors, mortgage brokers, and property professionals can help you make informed decisions and build a successful property investment portfolio.
Investing in property in Australia involves several key steps. Start by defining your investment goals and budget, then explore the different property types and locations that align with your strategy. It’s essential to conduct thorough research, understand market trends, and assess the potential risks and returns associated with each option. Engage the services of professionals like property investment advisory firms, buyer’s agents, financial advisors, and mortgage brokers to guide you through the process to ensure a successful journey into property investment.
A buyer’s agent fee is not directly tax deductible in the year you purchase a property. However, it can be added to the cost base of the property, reducing any capital gains tax payable in the future when the property is eventually sold.
This treatment of buyer’s agent fees is consistent with the ATO’s stance on expenses incurred before a property is rented or available for rent. Such expenses are not immediately deductible but can be included in the cost base of the property.
Investment-grade properties typically refer to properties that are designed for investors rather than owner-occupiers. Because these properties won’t be occupied by the owner, developers may make certain compromises on the quality, size and location, assuming the investor will be less discerning. As a result, these properties are often of poorer quality in terms of dimensions, finishings, and natural light, and may be located in over-supplied areas.
Investing in these properties can be risky as they will typically attract lower demand which will impact property values, it can be harder to find tenants which can lead to periods of vacancy, and capital growth can be sluggish. When it comes time to sell, the pool of buyers will be smaller, as it will be made up largely of investors, not homebuyers.
Binnari Property identifies and avoids investment-grade properties, instead favouring owner-occupier grade properties that appeal to those who want to make the properties their home. This will subsequently increase demand from buyers and tenants, and maximise property values and rental yields.
Owner-occupier grade properties may have more generous dimensions, be in areas with good walkability, be close to shops and schools, have good natural light and enjoy higher quality finishings. Investing like a local ensures the investment will deliver a better ROI.
Speak to our team today to build wealth through property investing
One of our property experts will contact you to discuss the following:
- Get to know your investment objectives
- Take you through Binnari’s unique investment approach
- Preview specific properties that match your investment strategy
We look forward to hearing from you – please enter your details and we’ll be in touch shortly!
