fbpx

Diversify within property

Want our top tips for finding investment properties that PAY YOU?
  • The top eight strategies to consider when searching for positive cashflow investment properties
  • What a positive cashflow property looks like ‘on the books’. In other words, you’ll see an example cashflow analysis clearly demonstrating HOW a property can pay YOU every week
  • And much more.

Transcript

Hey, everyone, it’s episode seven on the board and today’s topic is all about, diversifying within property. So, you can actually diversify within property, and it’s a bit of a myth I’d like to bust. Commonly, we go, all right, there’s property shares, and other assets that we can look at. Now, it’s important to have diversification within your portfolio as simply said you don’t want all your eggs in one basket, but does that mean it has to be property and other? Look, it can be, but even within property you can actually diversify so you can spread out different risks. 

Now, there are going to be some things that impact property as a whole. For example, interest rates impact property as a whole, but interest rates at times can also impact those other assets because if interest rates go up, you might have less spending from people, and if there’s less spending, those companies that rely on people to spend their buck to buy their products, their shares may be impacted as well if there’s not as much spending going up. So, interest rates can actually not only just impact property but they impact so many different type of asset classes. Now, that’s why we want to go into diversifying within property because we can actually get that mix within it. 

Now, you might be got involved, there’s a lot back here, but it’s just to show you how much you can actually diversify. Firstly, let’s start on the right side here. Residential, you can invest in residential assets where people are living in them, or commercial assets where businesses are living in them with people that manage it. Then we even got new or existing. So, you can look at new build assets for the certain type of returns you can get there or building it new, or existing assets. You can see we’re starting to spread because this is a high level and then within that you go, “Okay, where can I buy?” You can buy across New South Wales, Victoria, Queensland, Northern Territory, South Australia, Tasmania, and WA. The spread is huge. 

I am personally spread across four states, so, when people go, “Oh, wait, the market is not so … Well, hold on a minute, Firstly, you don’t buy in the market, you don’t buy the market, you buy particular asset within it and the market is made of things that are performing and not performing and that average up becomes that market. So, if you’re having Sydney having a bit of a down but then say Tasmania might have been having some increases, this is just some examples of that spring. Now, yes, again, back to that point, there might be some very high level confidence or high level factors that can impact property as a whole, but different markets, different assets, different locations can help you balance that risk or even help you grow in some parts where others might be a little bit lower. Obviously diversifying just really helps out there. 

Cool. Then you go, all right, you’ve got residential, commercial, new, existing, you’ve got all these different states. What about the types of properties? Again, you can diversify within those. You’ve got house plus granny fat, unit, unit blocks, townhouse, townhouse blocks, dual occupancies, duplex, offices, hotels, fuel stations, warehouse, retail, land, commercial farming, medical, childcare, multi occupancies, there’s some that I’ve even missed out. What’s that showing you is that there are so many different ways you can A, get in, but so many different ways you can diversify.

If for you that’s not enough, hold on a minute, we’ve got one big one here, overseas. Yes, you can invest around the world. We live in Australia, but others invest in our country, why can we invest in some of theirs? Sure, there is going to be different things to think about mending tax, so forth, but it’s just to show you opportunities exist, and you can diversify within property. 

So, episode Seven today, diversify within property. That’s it, all covered up here in terms of the different areas that you can go to. Just makes you think how big this opportunity really is. With over seven trillion holding in assets across residential property, close to one trillion in terms of the asset size in commercial. That’s over $8 trillion of activity that goes on in the real estate space for [inaudible 00:04:08] wealth. Real estate does underpin wealth in Australia and it’s absolutely massive. You can diversify completely. That’s it from us at InvestorKit, the experts in wealth creation helping you take action.