Short-term versus long-term strategies
The only thing that's ever constant in life is change. And this means that we must always be prepared to meet these changes, whatever they may be. From ageing and experiencing fluctuations in the financial market to the rising cost of living, there are things that we need to adapt to throughout our lives.
In order to provide wealth for our futures and meet these changes, many Australians have sat up and taken notice of the benefits that real estate investing can provide.
Property can give investors funds through capital gains after selling or even provide them a secondary source of income through renting. However, the choice of which property investment strategy you'll use to create wealth for your future is up to you – and the goals you've set for yourself.
Short-term strategies are good for anyone who wants to create wealth within a limited amount of time. Whether you're nearing retirement age or simply have a financial deadline to meet, everybody has their own goals and reasons for using this strategy.
One example of a short-term strategy is buying an off the plan investment property and selling it shortly after it rises in value. When you buy property off the plan, you sign a contract of sale usually before the dwelling has actually been completed. If the market is in your favour, your brand new property could even increase in value by the time construction has finished.
Another example of a short-term investment strategy is generating an income through your rental property. By finding a property with a high rental yield and large weekly rent price tag to match, you can build wealth quickly just through the money your tenants pay you. This money can go a long way to creating you a large pool of savings in a short amount of time, especially if your outgoings are low.
However, this type of strategy might not be for everyone. If you're looking for something more slow and steady, a long term strategy may be more suitable to your needs.
Are you quite far away from retirement? Or maybe you're looking for a way to supplement your income post-retirement? People who play the long game in the field of property investment are usually ones who opt for slower strategy. This is because the longer exposure that your property gets to the market, the more potential it has to appreciate in value. The property market works in cycles, too. This means that you won't see results overnight and it can take some time to see any substantial changes.
An example of a long-term strategy is buying one or more investment properties and holding onto them for a number of years. As the properties appreciate, you could sell them at a later date and use the money to retire with.
Finding an investment property is the easy part, the hard bit is selecting the right strategy to go with it. By speaking to a wealth coach and getting the right property education, you can rest assured you're making the most suitable decision for you.
However, in an ideal world, it's best to hold the property over the long term, and never sell. If you buy enough property and keep it long term, the income will continue to increase and will provide ongoing income in retirement. Setting your goals, and following a well thought out plan will always pay off in the end.