The mechanics of commercial property investment can be tinkered to maximise financial returns. The Australian commercial property market has been experiencing steady progress over the years, fuelled by consistent economic growth and a booming real estate sector. In this dynamic landscape, property owners are constantly seeking strategic ways to maximise their returns on investment. To remain competitive and capitalise on such opportunities, it is crucial to evaluate various methods that can increase property rental values, lease lengths, improve property conditions, expand net lettable areas, and employ sustainable energy systems like solar panels. Here are five key strategies that can significantly benefit investment strategies in commercial property in Australia. 1. Increase rental values One of the primary goals of commercial property investors is to generate a consistent and growing rental income stream. Achieving higher rental values can pave the way towards greater returns and a stronger financial footing. To achieve this, property […]

“Supply is really the number one factor in the residential property market right now,” insists REIA president Hayden Groves, who believes that unless more housing becomes available, rising interest rates won’t reduce national home values. Speaking on a recent episode of The Smart Property Investment Show, the man at the helm of the Real Estate Institute of Australia (REIA) said the national supply crunch is undoing the negative implications of the Reserve Bank of Australia’s (RBA) cash rate hiking cycle. Despite the housing market spending the majority of 2022’s back half within an aggressive downswing, which saw prices across the board drop 5.3 per cent last year, the largest drop off since 2008’s global financial crisis, recent data from research centre CoreLogic points to a strengthened market recovery over recent months. The firm’s Home Value Index (HVI) rose 0.6 per cent in April, its first increase in 10 months, while May saw national home values […]

Like most people, I started my own property investment journey in direct residential property investment, and for good reason. During the early stages of building a property portfolio – what many of us call the “accumulation phase” – investing in residential property can bring valuable benefits that are important for portfolio growth.  Obviously, one of the main benefits is the ability to accumulate capital and providing you have followed investment fundamentals and purchased a property with the right prospects, history has shown us that residential properties can generate significant capital growth over time. The important implication of this in the context of portfolio expansion is the ability to leverage this built-up equity (also supported by the gradual reduction in debt as you pay down your loan) to fund further property purchases. This is one of the key reasons why I believe, at least, for the majority of investors, that residential […]

In the current elevated interest rate environment, it pays more than ever for property investors to carefully consider their property portfolio. As I say in my book, Bulletproof Investing (page 105), “Cash flow and growth are interrelated in any investment, almost like a fulcrum or seesaw.” So, how can you achieve your portfolio growth and mitigate risk to cash flow? I’ve put together my key tips relevant to all investor profiles, from first time property investors through to those keen to grow their portfolios. 1. Only buy properties that pay 4 per cent rental yield or higher To ride through this economic climate, your investment strategy should focus on properties yielding a minimum 4 per cent. This leaves more dollars in your hands, between 2-3 per cent after expenses, easing the impact of any interest rate fluctuations. We buy property because we want it to grow in value, that’s what will ultimately make […]

When you invest in rental properties, finding quality tenants can make the difference between a successful investment and a failure. Vacant properties can be the weak link that causes your money not to grow as fast as it could. With the right knowledge, you will understand how vacancy rates can affect your investing strategy and learn how to go about finding high-quality tenants that will help your assets grow fast and steadily. What is a vacancy rate? Vacancy rate is a crucial metric that real estate investors use to evaluate the performance of a property. It refers to the percentage of unoccupied units in a rental property at a given time. For example, if a building has 100 units and 10 of them are vacant, then the vacancy rate is 10 per cent. Analysing the vacancy rate The vacancy rate is a term that most investors use to directly impact […]

Could refinancing prove valuable for home owners and investors looking to unlock extra capital this year? According to one financial expert, yes. As some 800,000 Australians prepare to exit their fixed rate mortgage over the course of 2023, Paul Glossop, chief executive officer at Finni Mortgages, recently revealed how the strategy could be harnessed by borrowers throughout the year. Following the Reserve Bank of Australia’s (RBA) decision to enact 10 consecutive cash rate increases between May 2022 and March 2023, in which time the cash rate rose from a record low 0.1 per cent to 3.60 per cent, Mr Glossop revealed the nation’s “probably getting to the point where assets are worth at least 10 per cent less than what they [were] worth this time last year.” As a result, “the cost of holding those assets has increased exponentially compared to where it was this time last year,” leading to many Australians […]