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Investing in property: Tick tock on the property clock!

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Emma Allen
The team at Active Property Investing (API) frequently field questions about investing

Investing in property is something that you might have been thinking about for a while, but just not had the time (or expertise) to get started! But it’s much easier to get your foot on the property investment ladder than you might think (and no, you don’t need to pay off your house first!). Here we have some expert advice from Emma Allen, local businesswoman and AusMumpreneur Finalist.

Investing in property is Emma Allen’s profession, and her passion has seen her advance to the finals of the 2020 AusMumpreneur awards.

property investing

Emma Allen Active Property Investing is an award nominee

With a high school aged daughter and a son in primary school, she has lived on the North Shore and knows the neighbourhoods the way only a long time North Shore Mum can.

“Being an AusMumprenuer finalist is very humbling,” says Emma, “because there are so many businesswomen who juggle as hard a I do, put their intellect and spirit into making their businesses thrive whilst emotionally and mentally investing in their families.

“It’s a challenging role, but an incredibly rewarding one to be able to show my children that you can aspire and shape a business or career whilst having a family. Hopefully that inspires another Mum to follow their passion.”

Emma Allen

Here, Emma shares her property investment advice in her own words:

Investing in property, and property itself has not changed in this new pandemic state we live in, but the way we live, work, and interact in our homes most definitely has. We’ve discovered how wonderfully functional or terribly dysfunctional our floor plans are, whether the internet can cope with working from home as well as home-schooling, or if the property down the road is now leasing for $100pw less rent!

This climate has given us a chance to rethink our priorities, consider the things we might have been delaying, only to realise that time on the property clock is precious and that taking action is the only way to get onto the next step of the ladder.

The team at Active Property Investing (API) frequently field questions about investing. Here are some commonly asked questions about investing in the Australian property market:

Emma in her element! The businesswoman is passionate about property and real estate

What are the benefits of investing in property?

For a typical Australian family, the bulk of wealth tends to be locked in their family home, which we work hard to buy and then pay off diligently. But the equity in our homes can be leveraged into an investment that can grow in value alongside your family home. 

The old myth to pay off your home loan before you invest would leave most of us facing retirement with only years to spare! Which is a little too late, as by then the property clock has chimed many times over.

If you can effectively manage your finances so you are able to allocate some funds to investing, time in the property market will work to your advantage.

“But the price of property is so high?” I hear you say.

  • Think back to when you first bought your home, or when your parents first bought their home. What were the property prices back then? Property is a large asset that moves slowly, and no it’s not always on the rise, the market rises, falls, plateaus and bounces along. It also takes time to respond to shifts in economic activity, but it is a fundamental part of our community’s safety and stability.
  • Now take into consideration wage growth. The average property in Sydney is more than eleven times the average salary, whereas back in the mid-90’s the ratio was more like 5.5 times the average salary. Therefore, the gap is widening and our children, well they may just need a helping hand from us if they want to purchase their first home in the suburbs we’re privileged to live in.

This makes property a vehicle to help individuals, couples and families get further ahead with their finances than just working or doing nothing at all. It’s a way for our money or equity to work for us and the more time we give our investments to mature, the better. Tick tock! 

Emma Allen

Emma is North Shore mum with two kids, and a savvy businesswoman

I’m investing in property…but what kind should I invest in?

Not all markets are created equal. Desirability also weighs up with affordability, so our North Shore homes can move quickly in a rising market, but they can also take a hit in values in a softening market as there is a smaller pool of people with the capacity to buy and trade at that level. It means that units are a more affordable option on the North Shore, especially the smaller boutique complexes with larger floor sizes.

What really matters are the financials, the rentability, the condition and quality of the property and the balance of supply and demand in that area. For some families, these factors may point towards considering investments that are outside of your postcode but more in alignment with your investing objectives. Be strategic in your decisions.

Word of caution – before you invest please talk with your advisors, accountants, bank, brokers, or planners so that you can look for options that suit your financial situation and goals. Secondly, always get an inspection report so you know the condition of the property that you’re considering. Lastly, if it is a unit, read the strata reports and look for anything that signals a potential issue or concern that could impact the longer-term ownership costs.

Emma answers common questions about property investing

Is now a good time to be investing in property?

There’s no denying that COVID-19 has had a huge impact on Australia, but property prices, despite the early speculation has remained resilient.

Rental declines have been more severe across the capital cities, though North Shore property values has only experienced a -1.6% decline in rent for the June quarter, and -1.5% decline in values. It indicates a relatively balanced market of buyers and sellers with few distressed sales. In fact, the decline of property listings has helped keep the balance in check.

This goes against the expectation that property prices would fall, to the disappointment of many first home buyers hoping to pick up a bargain. There is hot competition in that home buyer price bracket accentuated by the government benefits and grants that has boosted activity especially in the sub-$800,000 bracket.

In any case, when you invest in a location with a good balance of supply and demand, you will have stability not only in values but also in rental return. Selecting properties for its size, quality, functionality, internet speed, distance to transport and amenities will help your investment compete. Stay away from saturated markets, especially inner-city units at this point in time as these have been adversely affected by high vacancy thanks to falling demand and an increase in supply.

Lastly, the property market is constantly changing, and no one has a crystal ball. So, the question really should be, “is this is a good time to buy… for me?”. First and second time investors are taking advantage of record low interest rates and stepping onto the property ladder. Regardless of the investing environment, there are plenty of opportunities, you just need to find them.

The “wait and see” approach is also being adopted by many people. It’s not unusual for people to think about investing for 2-3years before they actually do it, but the market doesn’t wait. “Let’s wait till spring” they say, well spring is here, and time is ticking.

Active Property Investing are a dedicated team of experts who take the time to understand your situation, spend countless hours screening potential investments and then present our findings. You’ll have all the information you need to make important decisions with confidence. Contact API.

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Disclaimer: The information presented is general only and should not be construed as personal, financial or credit advice nor should it be considered as specific recommendations or investment advice. This information has not taken into account your needs, objectives and financial situation. As each individual’s circumstances are different, we strongly recommend your own independent review, investigation and analysis of any proposed investment. We recommend that before making an investment decision, each prospective investor should consult independent and professional advisers and should consider whether an investment is appropriate in light of your particular legal requirements, investment objectives, financial circumstances and needs. While all attempts have been made to verify the information provided, neither the author, presenter nor publisher will bear any responsibility or liability for any error, omission or contrary interpretation of the subject matter.

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