When an investor first borrows to buy an investment property, almost always the rental income does not cover the associated expenses, including loan repayments. This means the investor will need to cover any shortfall out of their pocket each month. While you can claim a tax deduction for this shortfall (known as negative gearing), it…
It’s always fascinating to explore how property prices might move over the coming year. While short-term price fluctuations aren’t particularly relevant for long-term investors, this kind of analysis can be incredibly useful for those planning to sell or buy property in 2025. Last week, I joined James Kirby on The Australian’s finance podcast to dive into this…
It’s very common for parents to worry about whether their children will be able to afford to buy into the property market, and we get asked about this regularly. There are several complexities involved: some financial, and some more related to parenting choices. I’d like to share an idea that could work well for both…
Some buyers’ agents promote investing in more affordable locations (i.e. outer suburbs). I can understand why some investors might be attracted to follow their advice. But it’s not until you delve into the theory and evidence that it becomes blatantly obvious that such investments have a high probability of underperforming. Here’s an example I saw…
I believe most people spend too much of their lives trying to reduce perceived financial risk. The opportunity cost of this approach is very high and puts lifestyle goals at risk. Too much focus on risk reduction Many people buy a home and then focus on repaying debt. They then upgrade their home and once…
There’s an endless stream of news articles discussing the economic factors that influence property prices: interest rates, unemployment, the supply of new homes, rezoning, and population growth – just to name a few. Having followed the property market closely for more than two decades, I have two observations to share. First, I’d love to have…
If you are contemplating investing in property, should you buy now or wait? What if prices fall? Maybe you would be better off waiting? As my analysis below reveals, buying for less than market value or at the bottom of the market (i.e. buying well), has very little impact. The price we pay for a property…
A few weeks ago I wrote a blog about the one thing that stops most people from making the most of their financial opportunities including making regular investments. It was my thesis that a lack of context is the main cause. Having a long-term plan provides you with the context required to make mistake-free financial decisions. It is difficult to…
In a blog I wrote back in late 2018, I introduced the term liveinvesting. It’s inspired by the concept of rentvesting, where you rent a home in your desired location while investing in property elsewhere. Considering that property prices in certain capital cities like Melbourne are currently more affordable relative to other locations, it’s a good time to…
Every asset class comes with its own set of advantages and disadvantages, and property investment is no exception. I often highlight the many benefits of investing in property and offer strategies to become a successful property investor. However, it’s equally crucial to recognise the downsides that come with property investment and think about how to…
