Property investment is a tried and tested way of generating personal wealth.

Interest rates are at historically low levels with the Reserve Bank this month cutting the rate even further to just 0.75 percent. Experts are tipping even more cuts this year. We anticipate a greater interest in property investment due to the of falling interest rates.

To help our clients make informed investment decisions, we reached out to Phil Harris, the founder and Managing Director of Harris Real Estate, to discuss the opportunities, risks and considerations when purchasing property as an investment.

Here’s what Phil and his team had to say:

Why is Real Estate an appealing investment option?

  • Real estate provides a steady source of return through rental income
  • Capital growth can be used to secure additional lending or provide profit if the property is sold

Is there a ‘best time’ to start looking for investment properties?

  • With low interest rates and affordable property pricing compared to other capital cities, now is a good time to be investing in the Adelaide market
  • Adelaide property prices continue to grow at a steady pace of 1.5 – 2.5% each year
  • Spring and the warmer months often see more activity in the real estate market with more properties listed and a higher number of sales
  • Consider speaking with a trusted real estate agent to help you find the right property

Buying with your heart versus your head 

  • Buying as an investment can be very different to buying a home to live in
  • Investing should be a purchase made with no emotional ties

What are the long-term projections for growth in the South Australian property market? 

  • We expect South Australia to continue as a stable investment market with modest year on year capital growth
  • Prices and values for properties in the city fringe suburbs can exceed and grow quicker when comparing to overall market growth

What are the risks of buying CBD apartments versus homes in the suburbs, for investment purposes? 

  • Capital growth traditionally comes from an increase in land value
  • Apartments need to be high yielding, in terms of rental income, to compensate for lower growth

Top 3 tips when purchasing an investment property 

  • Do your research on the history of the property and the location in which you are considering investing – capital growth, rental yields, outgoings & running costs
  • Make your investment a business decision and don’t let your emotions get in the way
  • Find an excellent property manager as they will assist with ongoing advice and managing your tenants

Speak to our team about your investment opportunities by contacting info@affinitascapital.com.au or (08) 8172 9122.