Generating passive income is a great way to make your money work for you. While some may buy shares in a company, investment property can give you just as many, if not more benefits. The trick is finding the right piece of real estate. This article will walk you through Gold Coast market investments and how to make the right choice.
The advantage of Gold Coast investments
The Australian property market price growth is now worth $9.7 trillion after exhilarating at record speed in 2021 according to Property Update. Although this value is down from $10.14 trillion in March of 2021, property is still a popular form of investment over stocks.
The housing market is more popular than investing in shares because it is viewed as more stable. Brick and mortar offer investors a physical point of value rather than watching the peaks and valleys of the stock market from a distance.
But what makes Gold Coast suburbs and apartments a safe investment? Gold Coast offers residents a secure, luxury setting in the heart of Queensland.
In September of 2022, Gold Coast ranked 5th in the world for best places to invest, according to Knight Frank's Prime Global Cities Index. Australia's top 5% are still buying and selling property in the area despite otherwise downward trends elsewhere. That is to say, investing in this region is a relatively safer bet than investing anywhere else because of the consistency of the Gold Coast property market and the types of people who typically buy in the region.
If you're new to purchasing real estate, here's what to look for and how to prepare for your first property investment.
Making a smart investment
There are a lot of benefits of investing in property that shares don't necessarily offer, but it does take more consideration beforehand. Here are some points to consider as you look at property on the Gold Coast.
Invest at the right time
The trickiest part of any investment is knowing when to make the move. You want to ensure that your return on investment (ROI) will be significant enough after flipping the property. This means you and your real estate agent should keep an eye on the market and make the investment when the market is low.
Consider how the property will be used. Will you live in it as you make improvements before flipping it quickly or rent it out as a longer-term investment? While capital gains could take years to hit your bank account, renting or flipping could offer you nearly immediate ROI. If you rent the property, you should consider the rental yield value before setting the rent price.
Save on taxes
If you choose to rent the property, you may have incredible tax deductions ahead of you. Rental property is considered assessable income and must be declared on your tax return. It's taxed at your marginal tax rate and any expenses you put into the property, from improvements to furnishings, are tax deductible.
Have an enter and exit plan
Before getting involved in Gold Coast property investment, you should approach it with a plan of entry and exit. One of the few downsides of property is that it takes time to enter and liquidate the investment. Instead of chatting with your accountant to sell off your shares, selling property can take longer to get out of your hands.
Property investors should know that real estate is a long-term investment. If you need cash quickly, keep in mind that property does not liquidate as easily as shares.
Understand good ROI
Before you invest in a home, an apartment unit or a building, you should know how much ROI to expect. You should know the average yield in the area before you invest or rent the property. There's no point in investing in real estate if the ROI is low or nonexistent.
Why the Gold Coast?
Around 31% of the people who live in South East Queensland live in rental properties, says research by Real Estate Investor. In their studies, they found that the area has a low vacancy rate of 0.83%. Research also indicated that rental yield could fall between 3.9% for a home to 4.4% for apartment units.
SQM Research has found that Gold Coast region property prices have softened in 2023 after peaking mid-last year. Now is the right time to keep your eyes on the market and invest when prices are at their lowest to get the most value. People of all age groups are moving to the area, from younger demographics to retirees, indicating that Gold Coast investment property is likely to continue to increase in value.
On top of Gold Coast's consistency and attractiveness to all types of renters or buyers, the area also made it to Real Estate's Hot 100 Suburbs to Watch in 2023 list. The best suburbs in Gold Coast are mentioned three times on the list for location, amenity and infrastructure value.
Why you should work with the professionals
Knowing when to jump into the property investment market and when to wait for it to cool can be an overwhelming task to take on your own. With listing prices on a rollercoaster the past few years, it takes a professional eye and someone who has been watching housing prices for years to ensure you're making the best decision.
That's why the real estate professionals at Ray White Surfers Paradise are here to help you improve the future of your investment. From expert insights to property suggestions, we've got you covered. Reach out today to get started and learn more.