A familiar property saying can sound reassuring while leaving the most important financial questions unanswered.
Land always rises in value
Values can fall as well as rise. Location, condition, competing supply and buyer demand matter. Compare credible local evidence and consider the effect of a lower valuation or slower sale on your finances.
Rent will cover the ownership cost
Gross rent is only the starting point. Allow for vacancy, management, insurance, rates, strata levies where applicable and repairs, then include finance costs. Test the budget at higher rates and with a significant unplanned expense.
Experience removes the risk
An experienced investor can still face a defective building, an unsuitable loan or changing circumstances. Check the property, contract and proposed use. Obtain professional advice about questions that an agent’s market appraisal does not answer.
Holding longer guarantees a profit
A longer holding period may spread transaction costs, but maintenance and other expenses continue. Compare the net outcome of keeping, improving or selling the property against your needs. There is no universal holding period or strategy that suits every investor.
