Does the value of my investment go down?
Investing's very idea entails risk and the returns should be proportional to the risk you take. Importantly, values aren't linear when it comes to property. Based on many variables, property prices change, and you can not always encounter years when your property goes up in value. When you have a long-term strategy and solid financial planning in place, your property experiencing negative growth for a time isn't too extreme to think about.
Properties can often decline in value; however, experience has shown that, if the purchase is made in an region of continued economic development, the property would increase in value over a 10 year period. This illustrates the value of making your buying decision right when you spend first.
Although you may find a cheaper property and get into the market quicker by buying a property in a less sought-after location, it is a riskier decision than being cautious and buying in a safe, blue-chip place. As Warren Buffett puts it, he buys stocks just as he buys food. He is concentrating on buying shares in blue-chip firms as he invests.
Several factors influence property values from macro factors such as interest rates and the broader economy to localised, micro factors. Some of the main localised variables influencing home prices are success on the property market in your local area. If your property is in a low-demand area, you will naturally be subjected to slower capital growth and a higher risk of declining your property value.
An area's population and demographics would also have a significant effect on property prices. For example, if your investment property is a multi-bedroom home in an area that is popular with young families, you may expect this kind of property to be more likely to outperform in comparison with the neighbouring apartments. If your property is in an area that is common with younger people who prefer the luxury of living in an apartment, the opposite can also apply.
Regional jobs and proximity to work are important for property prices. When your property is in an region with convenient access to the CBD or sustainable long-term job opportunities, then the region would obviously be in higher demand than less linked areas with less job opportunities. In comparison, regions with seasonal employment or unpredictable boom and bust cycles are exposing investors to an increased risk of decreasing property values. Following the mining boom in 2011/12, the rapid fall in property prices is a clear example of what happens with property values when a crucial regional industry slows.
Make sure your property ticks the important boxes in terms of factors influencing the value of the property to mitigate the risk when it comes to investment in land. Such issues include location, infrastructure, population and demographics as well as property specific features. Such features include scale, aesthetics, and facilities such as air conditioning and an outdoor entertainment areas.
Although there are market-wide variables that all investors need to be aware of, each investor will always have its own specific strategy and objectives. Before making any major property decisions, make sure you check with your accountant, financial advisor and other professionals.
For further information about real estate in this area, contact No Bull Real Estate, your most reliable and friendly real estate agents in Newcastle & Lake Macquarie. Buying, selling, leasing for residential, commercial, industrial property, contact your local expert to buy, sell or lease today on 49552624 or https://www.nobullrealestate.com.au