fbpx

Why politics is just one part of the puzzle for successful property investing

Change the government, you change the country, or so the saying goes.

In the lead up to Australia’s recent federal election there was plenty of talk about the future of the nation’s property market, with Labor promising to axe negative gearing if it won power.

Many people held off on their investments until there was a result in the polls, while both sides of the debate speculating there would be a boom or bust in the market depending on who won.

Yet while it can be tempting to link the ups and downs of the Australian property market solely to the politics, there are many other factors property investors should take into account.

Negative gearing set to stay for Australia’s property investors

In the end, the coalition was returned to power under Prime Minister Scott Morrison with a strong majority, and Australia can enjoy the fruits that negative gearing has brought more at least three more years.

The share market responded to the Liberals’ win with a surge in value in the aftermath of the poll, rejecting Labor’s property policies.

Meanwhile, the government has promised to slash taxes and introduce a scheme to reduce the amount first-time homebuyers need for a deposit on a property.

These are all good moves and will help people get on the bottom rungs of the property ladder, but it’s important we recognise these are political moves beholden to the mood of the leaders of the day.

For property investors, the fundamentals rarely change regardless of who’s in power.

The fundamentals of successful property investing

The property an investor selects to buy must be viable regardless of the political environment of the day and whatever policies are in place to regulate the market.

Because while the political landscape can change on the results of a single election day, a cashflow positive property is built up over many years.

Good investments tend to have one or all of these four elements:

1. Strong demand
2. Low and tight supply
3. Relative affordability with reduced cashflow risk
4. Positive investor sentiment, focused on the long term

All politics is local

Focusing on the long term in property investing is perhaps the hardest to manage because it’s a mindset rather than something that’s measured in dollars or statistics.

But above any other element, your personal circumstances will have the greatest influence on your investment decisions, not which party is in power.

The amount of money you have to spend, the position you are in in life, the amount of time you’re willing to put in; all of these factors will influence your success in property investment.

So while it pays to pay attention to politics, it’s wiser to chart your own investment course and pick properties based on their fundamentals, not what the government of the day is doing.

Having a professional act exclusively on your side could be the edge needed to help you make numbers based decisions on the right investing fundamentals. It starts with a FREE CONSULTATION, CLICK the button below to book yours in!