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