Shocking Factors That Could Affect Your Investment Wealth
Predicting what could affect our investment wealth, and where the smart buying opportunities exist, is getting more complicated.
A 2020 news article suggested that Australian home owners could face millions of dollars in losses if their homes are affected by sea damage or coastal erosion due to the fact that most major insurance companies will not insure properties against environmental damage.
Considering that all major Australian cities are coastal, and most of the richest neighbourhoods are beachside, the growing threat of severe weather incidents due to global warming throws a serious spanner in the works when considering where to buy and invest.
If you’re a climate change sceptic, we’re not here to judge. But that position isn’t going to help you if the institutions you rely on to protect your assets won’t have a bar of your $3 million beachfront house.
While you can’t single-handedly stop climate change, you can gain a greater understanding of the other factors at play in what can affect your property investment wealth in both positive and negative ways.
Areas that are rich in industry is one good indicator that capital growth will happen. This is especially important to investigate if you’re looking at regional towns. While you may get more for your money than in a major city, will the area continue to thrive and survive? Does it have more than one industry that will attract jobs and people? While some regional towns are more like ghost towns now, others, such as Mudgee in NSW, are thriving. The tourism, mining, agriculture and wine industries that exist there are sustaining the region and allowing it to grow. Do your due diligence and make sure you know the region you’re buying into has a future.
Infrastructure investment and development is another key influence in property investment wealth. If billions of dollars are being poured into local schools, transport and hospitals, the region will be supported by employment opportunities. The more people who come to work, the more homes will be in demand, and so the rent rates rise.
LIVE, WORK, PLAY
One of the effects of COVID-19 has been an acceleration in the pre-existing shift of more people wanting to live, work and play within a 20-minute radius. Suburbs adjacent to CBD’s, with easy access to exciting social activities and green space, offer the renter or buyer much more than just a dwelling.
The Third Space – the area close to your home that gives you a lifestyle you crave – is a significant factor on what will continue to grow investment wealth. Check out the walk score of a neighbourhood, investigate the health and well-being benefits of the community and find out if people are starting to see the area as a “place economy”. If people want to be seen and live there, property prices and rent rates will rise.
INSTITUTIONAL DUE DILLIGENCE
Lastly and most importantly, make sure you fully understand your level of coverage and vulnerability risk.
The institutions that support us as property investors by underwriting and protecting our assets are a vital part of our ongoing success and wealth creation. We need them on our side.
Minimise your risks by doing your due diligence and making sure you can get the right protection for a property before you purchase it.
Setting your property portfolio up for success from the get-go is a crucial factor of safe investing. With so much money on the line you need to ensure you have the knowledge and a strong strategy in place that supports your long term financial goals.
To learn more about how you can do this, join our free property investing seminar and make sure you have the key fundamentals in place to achieve prosperity and wealth. Afterall, no one becomes an investor to stay stagnant or lose money.
Limited spots are available. Book here now.