4 reasons to invest in a Queensland rental property
Finding an outlet to invest your hard earned money in can be a difficult decision, but one you should spend a lot of time thinking about. From shares to term deposits, Australians have an array of investment options at their fingertips.
But which one is right for you?
Investing in a rental property makes sense for anyone who wants to achieve high capital growth over a long period of time. It's also a good option for those who have a self managed super fund set up, as there are many tax benefits that fund members can access.
If you've thought about real estate investing, chances are you have also begun to wonder where you should purchase a home. Queensland is one state in Australia that ticks many boxes of a great area to invest in.
1. Employment growth is strong
The mining industry in Queensland has been a large driver of employment for quite some time, leading to many people moving to the state for an opportunity to secure a job in the lucrative resources sector. While this industry is still a very strong provider of employment growth, it's continuing infrastructure development, such as roads, facilities and schools in the state that has also injected jobs into the economy.
In March this year, it was found that Queensland was the top performing state in Australia for employment growth. Treasurer Tim Nicholls said over the year to March, there was an increase of 39,100 jobs, with trend employment rising for 11 consecutive months.
What job growth means for investors is that an area will be a more attractive area for people to live due to employment opportunities. More people leads to higher demand for housing, placing pressure on vacancy rates.
2. High level of investment in economy
Both government and business investment in Queensland have been strong in recent years, providing good conditions for property investors and local businesses. Construction for infrastructure and housing in the state has been a focus in order to cope with predicted population changes and to grow the state further.
The CommSec State of the States report pinpointed Queensland as one of the fastest growing areas in the country due to the high level of business investment occurring.
On top of this, local projects such as the Sunshine Coast Public University Hospital in Kawana inject jobs and high quality community facilities into the economy.
The more business investment in the state, the higher the opportunity for job creation.
3. Population boom
By 2075, Australia is going to be home to 46 million people. You might ask yourself where they're all going to end up – one estimate by the Australian Bureau of Statistics is that many will live in Queensland.
The Queensland population is projected to rise from 4.6 million to 7.3 million people by 2040, becoming one of the fastest states for growth in the country.
With a rise in population, a lot of pressure can be placed on the housing market. In turn, properties can become more valuable due to the higher rate of demand for accommodation. While this might lead to strong price rises for buyers, investors who already own an investment property will largely be the ones to benefit.
4. Gains and opportunities
Real estate offers a less volatile type of investment, with the potential for large capital gains. At the same time, owning a home means you're building up equity over a long period. This can be used to your benefit, from performing renovations or refinancing to purchase another home. If you've got one under your belt, what's really stopping you from purchasing more?
As rental yields are gradually getting stronger in Queensland, the chance to secure a very profitable investment is there for any savvy buyer with a good level of property education.