You have 0 free articles left this month.

Understand your investment goals

30 NOV 1999 • By Phillip Tarrant • 3 min read • Investor Strategy

Decide whether you’re looking for cash flow or capital growth.

spi default article image em4omm

 

Much the same as the share market, the property market also moves through cycles and right now, property is certainly looking attractive to investors.

You’re out of free articles for this month

A significant undersupply of rental property across most markets has sent rentals soaring. Coupled with plummeting interest rates landlords should expect strong rental yields from their investments in the period ahead.

Considering current market conditions it is little wonder that a growing number of Australians are now thinking about making their move into property investment. However before diving in it’s important to consider your strategy and long term objectives, as this may influence what and where you buy.

 
 

There are two principal goals for investors – capital gain and cash flow. While it’s quite realistic to achieve both, the two should at least be considered separately and prioritised before making your move.

Capital gain refers to the growth in value of the investment and the subsequent return to the investor once the property is sold. Australian property has historically doubled in value every seven to 12 years, which may not be as dynamic as some other investments but it is generally considered one of the safest.

Alternatively, rather than liquidating your investment after a set period you may choose to generate ongoing rental income. While you may need to dip in to your own cash reserves in the early stages to repay the mortgage on the property there are tax benefits associated with this.

However as rentals continue to rise there may be a point where your property may become cash positive – delivering a steadily increasing monthly reserve. These extra funds can be channeled back into the property to drive down the principal debt or spent on other purposes.

Remember, it is essential to consider your long term goals before you buy and finance your investment. Some properties may offer better opportunities for capital gains while others may command higher rental values over the years.

It’s also important to discuss your funding options with your broker. Different loans and repayment structures will suit different strategies so it’s vital to find the right product and strategy that meets your needs.

Want to see more stories from trusted news sources?
Make Smart Property Investment a preferred news source on Google.
Click here to add Smart Property Investment as a preferred news source.

Free investor loan check

Better property decisions start with smarter lending.

A free 15-minute finance check for property investors.

15 minutes Free No obligation

What are your lending goals?

Choose a goal to request a callback.

Buying againCheck my borrowing position Equity or refinanceReview my current loans Loan strategyGet a second opinion

Ready to talk?

Book a 15-minute call →

Finni Pty Ltd · Australian Credit Licence 384324 · Privacy

RELATED TERMS

Investment
An investment is an asset or item purchased with the expectation that it will generate income or appreciate in value in the future.
Phillip Tarrant

Phillip Tarrant

AUTHOR

Phillip Tarrant is one of Australia’s leading property commentators, with more than a decade at the forefront of conversations shaping the nation’s property investment market.

As the long-time host of the Smart Property Investment Show and a regular commentator across property, finance and business, Phillip has interviewed thousands of investors, economists, advisers, brokers, agents and industry leaders, giving him a unique perspective on the trends, policies and market forces influencing Australian property.

Beyond property commentary in the media, Phillip is an active property investor himself, with first-hand experience building and managing a diversified property portfolio across multiple markets and cycles. His insights combines this practical investor perspective with deep exposure to the broader property and financial services ecosystem.

Phillip is also CEO and co-founder of Managed, an Australian property payments and technology platform transforming the way property managers, landlords and tenants manage rental payments and property transactions.

Through his writing, podcasts and industry engagements, Phillip focuses on cutting through market noise, challenging conventional thinking and helping investors make more informed, strategic decisions. His commentary regularly explores property markets, lending, taxation, regulation, investment strategy and the changing dynamics of Australia’s housing sector.

Know more