Only 1 in 10 investors buy for positive cash flow

The two main strategies in property investment are capital growth (long-term results) and cash flow (short-term results) – and right now, savvy Australians are favouring growth over positive returns.

The majority of Australian investors (59%) are buying property with an eye on long-term capital growth, with only 11% holding out for positive cash flow, according to a new survey.

The 2017 Property Investor Sentiment Survey, presented by Your Investment Property and Michael Yardney’s Property Update, reveals that many investors are in it for the long haul where property is concerned.

Even those who do not describe their strategy as being capital growth focused (20%), and who instead opt to buy a property, develop or renovate it, have a long-term view, as they plan to hold the asset over a longer period.

Since many locations with long-term growth potential also generate low yield, more investment properties are negatively geared (37%) than positively geared (27%), the survey showed.

For investors seeking to buy their next investment, Melbourne and Brisbane topped the list for capital cities, with 52% and 48% of respondents, respectively, citing these areas as having the best growth prospects in the next five years.

Canberra and Darwin have the least confidence, with less than 10% of respondents interested in these areas.

Despite the incurrence of short-term losses, there is strong faith in the feasibility of property as a source of passive income – therefore, a whopping 61% of respondents consider now to be a good time to invest.

Over 50% are in fact planning to buy an investment property within the next 12 months.

The 2017 Property Investor Sentiment Survey showcases insights from over 2200 property investors and would-be investors across the country.

Running since 2011, it offers rich and vibrant insights into how property consumer trends and sentiments have changed over time.

Click here and download the full survey results

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