During the present, world economies are reeling from a downtrend in the last 18 months. In many markets in almost every continent, one of the most affected market sectors has been real estate. While this is bad news for real estate agents and those people who are looking to sell their homes, this is great news for the up and coming investor looking to make a few life changing decisions. Investment property is one of the hottest strategies to increase long term wealth and to diversify one’s investment portfolio. With prices at all time lows and many countries lowering interest rates, there are very few ways that one can achieve capital growth of this magnitude than that of the housing sector. Many Australians who did not buy when the housing market was hot are heaving a sigh of relief while considering their options. Portfolios that were once only diversified by numerous stock market sectors are now seeing an increase in investment properties.
Those looking to purchase an investment property should always consider his or her options. There are many options for the purchase of investment property, and one does not have to be a current home owner to become an investor in the housing market. For instance, many young people who are looking to properties for investment portfolio diversification are deciding to continue living at home while buying rental properties. Many purchase rental properties such as two bedroom, one bathroom houses in lower income areas where the purchase price is usually affordable. He or she will immediately make necessary upgrades to the property, possibly increasing its capital growth, but mainly in order to make the property ready for rental. Business savvy Australians have been diversifying their portfolios like this for many decades. However, with housing prices so low during the present, many more are beginning to jump on the housing market investment trend.
Another option most people have is investing simply in a second home. Second homes can be used in a variety of ways. Since many houses in resort areas located in mountainous areas and coastal communities have been hit just as hard as other residential areas, many people have found that this is the best time to get a deal on a second home. Also, a second home in a coastal or mountain resort area can be rented out to alleviate some of the monthly mortgage payments. In some areas, those who own second homes can accrue their yearly mortgage payments in one heavy tourist season. However, one should always keep in mind that he or she should be prepared to pay taxes on a second home. If rental properties are listed as rental properties and not second homes, there are many tax breaks that are offered to the owners as well. There are a number of ways Australians can increase his or her wealth by investing in the housing market. With a little bit of research, one can find a way to invest in the housing market that suits his or her needs.