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Investment property strategies for beginners

From renting out a second home to subdividing a big block of land, there’s a bunch of different ways a property investment could help you make a profit.

Property investment in Australia - what is it?

Property investment AKA real estate investing is where you buy a place and use it to make money. It could be a house, unit or an empty block of land. When you think of property investment strategies, renting out a second home is probably what comes to mind. But that’s just one of the many options you could choose from.

5 types of property investment strategies in Australia

1. Homeownership

Buying a home is an investment for the future. So when you sell in five, 10 or 20+ years, you’ll hopefully make a profit thanks to rising house prices. Owning a home also allows you to build equity which you might be able to use to grow your property portfolio. Real estate mogul alert!

2. Buy and rent

This property investment strategy is simple - after you buy a home, you rent it out to someone else. If the tenant’s rent is more than your home loan repayments and maintenance costs together, you should make a profit. But if it’s not, you might be able to claim tax concessions utilising negative gearing.

Pro tip: For an investment property you’ll need an
investor home loan, which comes with different (and usually higher) interest rates. Find out more about our super competitive investor rates here.

3. Flip it

This house investment strategy involves buying a run-down home, giving it some TLC and selling it for a profit. There’s a few things to consider to make sure your flip isn’t a flop. A good idea is to start by looking in suburbs where house prices have been growing. Also, perhaps drill down on how close different properties are to public transport, schools and shops. And when it comes to your reno budget, a good idea is to take a look at how much new and renovated properties are selling for nearby. This might give you an idea about how much you could spend without overcapitalising.

4. Subdivision

If you buy a block of land that’s big enough to split in two, you might be able to subdivide it. To do this legally, you’ll need to ask your local council for permission and do your research on any zoning restrictions. If you get the green light, happy days! There’s probably a bit of paperwork you’ll have to fill out, but it’s worth the time and effort because having two separate blocks could increase the overall value as opposed to one block of land.

5. Dual occupancy

Dual occupancy is where you have one block of land with two separate living spaces. It involves renting out a granny flat, duplex or a self-contained living space within your home. Even though you might have to do some minor renos to install a kitchenette and separate bathroom, it could be a great way to make some extra cash.


While these are some of the popular property investment strategies in Australia, there’s lots of others you might want to explore. If you’re ready to invest, pick your favourite strategy and start looking for homes with the potential to make you some cash.

 

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The information contained in this article is of a general nature only. It doesn’t take account of any person’s objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate for your circumstances and seek independent legal, financial, and taxation advice.