Investing without borders
All too often property investors approach our team with the goal of purchasing a property nearby where they live. I get it, it’s handy to have a rental property a short drive or even a brief stroll away from home. Diversifying your assets is one of the golden rules we teach at National Investment Advisory. Buying interstate can deliver valuable gains for your property portfolio.
Investing interstate is a strategy used by all types of investors. You might be a successful investor who’s looking to diversify your portfolio on a national scale, or you’re a newbie rentvester hoping that an interstate property will be the first step on your journey to becoming a real estate mogul. In 2022 investing without borders must be a consideration, here’s why:
Minimising Risk
You’ve likely heard the saying “Don’t put all your eggs in one basket“. Many have taken this to mean diversifying in different asset classes. While this is true, you should also distribute your risk within the class of property by buying properties in varying locations. Balancing your risk across various markets makes investors less susceptible to industry and employment changes like we’ve seen in regional towns dominated by mining and tourism. If you own properties in Sydney, Melbourne, Perth and Brisbane and the market in Melbourne comes to a standstill, you’ll be glad you own investment properties in other cities that may be experiencing stronger growth.
Capital Growth
Looking at alternative opportunities also provides you a greater possibility of capitalising on the upswing of a property cycle. For instance, an interest rate rise in 2022 will likely see Sydney’s price growth slow down as investors chase yield and affordability. Contrastingly, an interest rate rise will likely see further demand in more affordable markets such as Queensland. Being fluid with location allows you to capitalise on alternative markets whilst you’ve got the financial ability to purchase, rather than waiting for the next cycle to jump into Sydney.
In closing, investing interstate could deliver the outcome you’re after but make sure it aligns with your wealth plan and supports what your financial goals are.
Of course, speak to one of our friendly team for more information.