It won’t happen overnight
Sure the renovation and development geniuses can sometimes turn their skills and luck into a quick profit on a property, but the rest of us need to take a deep breath, keep calm and hold it for up to a decade.
Somebody who bought property here three years ago would be pretty annoyed now if they had planned to sell within a year or two, with prices going nowhere in that time. Adelaide’s median house price in June 2010 was $410,000 and in September last year was $397,000, according to the Real Estate Institute of Australia.
Surging house prices in other states in the past year have been welcomed, and many experts expect more solid growth in 2014 but warn that the cycle may turn in 2015. This means anyone who buys in 2014 may be looking at a few years of flat or negative growth. If you invest for the longer term, even if there is a flat spot in property price growth, chances are rents will be rising, giving you an improved income much like rising share dividends keep stockmarket investors happy. Smartline Personal Mortgage Advisers executive director Joe Sirianni says a five-year goal appears to have the best chance of success.
‘‘Five-year goals require an ongoing commitment to ensure they are achieved, but the end result doesn’t feel like it’s going to take forever to achieve,’’ he says.
‘‘While it’s true that patience can be a virtue, this shouldn’t be confused with just waiting for something good to happen. We need to be patient but we also need goals and a plan.’’
Write down your expected, best and worst-case scenarios for your real estate investment. Use a spreadsheet if you know how to use those newfangled spreadsheet programs. It will give you something to measure against rather than just hope for the best.
So swap those pesky oneyear goals for a detailed 10-year property plan. It takes the pressure off you for quick results, and gives your property the chance to ride out the inevitable ups and downs that all investments experience.