Property Experts Say Existing Australian Landlords Should Buy Up More Property

Property investment is a popular pastime for many Australians today. Experts say that to get wealthy from investing in real estate, you need to treat it as a business. Read on to learn more.

If you want to get rich from owning houses, don’t stop at owning one property.

This advice comes from real estate experts who advise that multiple property investments are the way to go.

The latest Australian Taxation Office figures show that 71% of Australia’s 2 million landlords own one property. 19% have two properties, 6% have three, and only 1% own more than six properties.

Specialists are urging property investors to develop extensive portfolios and treat property investing as a business, which brings in real profits year on year instead of a hobby.

Property Investing As a Business

Investors, property experts say, need a solid business strategy and plan in place to switch their model from an amateur activity into a profit-making business.

Mr Yardney, CEO Metropole Property Strategists, states “To obtain financial freedom an investor would need to own their home debt-free plus have the rental income from several investment properties – three or more.”

But how do you get from one to two to three homes?

There are several strategies property owners can implement to ensure that they own more properties in the fastest time possible.

Owners could save for a deposit, just like they did when they bought their first home. The money could also come from rental income, banks, and other private sources. Savings free landlords from relying on capital growth to fund future investments, which could see them purchase their next property faster.

Another way to get ahead in the property game is to leverage any equity accumulated in the first property. Borrowing against this equity can enable landlords to pay for a deposit on a second investment property effortlessly.

Property owners could also consider purchasing a cheaper second investment property. This strategy is more achievable and would result in a more affordable deposit and more manageable monthly repayments.

A fourth strategy would be to sell the property you have and purchase two properties from the proceeds. While this strategy may seem drastic, it does make sense and releases you from holding onto your first purchase forever, propelling you further up the property ladder, faster.

The Benefits of Owning Multiple Properties

Owning more than one property increases wealth in several ways. 

Property investor and real estate author Peter Koulizos advises that one property could be enough to live on if it had no debt, was sold at retirement, and then put together with a sizeable superannuation balance. He further adds that to live comfortably off rental income, retirees would need approximately AU$2 million worth of real estate properties.

“More than one property means you will live a more comfortable retirement or might be able to retire early,” Mr Koulizos said.

Owning multiple properties comes with several benefits. These include:

  • Higher and faster capital growth from multiple units
  • A diversified portfolio, which provides greater financial security
  • More passive income
  • The accumulated value of numerous properties makes financial freedom easier to achieve

It’s not just enough to buy but to buy in the right locations. According to Koulizos, the properties you purchase must be as close as possible to the city, possibly in up-and-coming gentrifying suburbs.

“Most people stop at one because the first one they bought didn’t have enough capital growth to increase their equity to buy the second one. The other reason is they don’t want any more tenant hassles,” Kouzolis adds.

While this caution may work for the average investor, it may not serve the serious investor that wants to build real wealth from their property portfolio.

If you want to learn more about property investing, join our platform today and become a Talk Investing member. We have years of experience in all matters property and can advise you the appropriate investment strategies for you as well as act as your buying or selling agents.

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