Start­ing early and per­sist­ing through two growth cy­cles can pay div­i­dends, re­ports

Lach­lan Pryor.

The Advertiser - Real Estate - - Front Page -

PROP­ERTY in­vestors should start young and hold their as­set for at least two growth cy­cles to max­imise prof­its, the Young In­vestors club says. National pres­i­dent Ben Dempster, 33, is a South Aus­tralian who in­vested in prop­erty at a young age and now has a port­fo­lio of $1.35 mil­lion.

‘‘When I made my first in­vest­ment at age 23, I was liv­ing at home,’’ he says.

‘‘The unit was al­ready ten­anted, giv­ing me time to save for fur­nish­ings while at home and I re­alised I got some tax ben­e­fits. Par­ents can pro­vide a leg up, ei­ther con­tribut­ing to­wards the de­posit or act­ing as guar­an­tors on the loan.

‘‘Guar­an­tors don’t need to stay on the mort­gage doc­u­ments long. With steady re­pay­ments, young in­vestors can be well on their way to own­ing in­de­pen­dently.’’

Mr Dempster says the key to the start of the in­vest­ment jour­ney is the de­posit.

‘‘Sav­ing as much as you can is es­sen­tial. I had to sac­ri­fice go­ing out a few times at that age. I was work­ing two jobs while study­ing,’’ he says.

‘‘I just knew the ben­e­fits of prop­erty in­vest­ment from my par­ents.’’

Mr Dempster says prop­erty in­vest­ment sees its best prof­its in the longer term.

‘‘Many in­vestors of­ten wait for the ‘right time’ to buy but sea­soned in­vestors un­der­stand that it’s time in the mar­ket that cre­ates a highly prof­itable as­set,’’ he says.

‘‘Younger in­vestors have the lux­ury of sit­ting out any mar­ket down­turns and wit­ness the value hike from a growth cy­cle be­fore it’s time to cash in. His­tor­i­cally, house prices have dou­bled af­ter 7 to 10 years but this is not al­ways the case.

‘‘Leav­ing time for that sec­ond growth cy­cle can make all the dif­fer­ence.’’

Mr Dempster lives with his part­ner at Glenelg North but has two in­vest­ment prop­er­ties in Queens­land.

‘‘Any prop­erty un­der $600,000 does not get land tax in Queens­land and there is lower stamp duty,’’ he says. ‘‘You treat it as a busi­ness and you need to look at where the numbers work for you. I’m not against in­vest­ing in Ade­laide again in the fu­ture.’’

Real Es­tate In­sti­tute of SA pres­i­dent Greg Nybo agrees prop­erty is a long-term in­vest­ment and suits young buy­ers in the mar­ket.

‘‘Real es­tate should be and must be con­sid­ered as a long-term process,’’ he says.

‘‘His­tory has proven that peo­ple who are in it for the long haul will do quite hand­somely.’’

‘‘From my own of­fice, one of our guys made two sales where mum and dad were in­volved. Fam­i­lies are look­ing at try­ing to help kids with eq­uity po­si­tion or of­fer­ing the fam­ily home for se­cu­rity.’’

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