Successful property investment is all about strategy. While popular real estate shows make it look easy, the reality is that property investment can be tricky, especially if you don’t have a solid strategy behind you.
For new investors, identifying a winning property strategy can be a tough ask. With dozens of strategies to choose from, it can be daunting trying to select one that will fit in with your investment goals, risk profile and confidence levels.
While there are many strategies to choose from, here are 5 property strategies that can deliver big returns, whether you’re new to property investment or looking to diversify your holdings or investment approach. We’ve also made it easy for you to find them so you can get started ASAP!
5 Property Strategies for Investment Success
Strategy #1 – Subdividing Property
Block splitting or subdivision can be a quick win for property investors. Splitting an existing block of land in two instantly increases land value, allowing you to sell off both blocks, keep one and sell one or hold onto both.
Before utilising this strategy, understand the guidelines to subdividing in your local council area. You don’t want to find yourself the owner of a block of land that can’t be subdivided due to width, size or zoning regulations.
How to Find Subdividing Opportunities: stay on the lookout for bigger blocks (generally larger than 1000m2), especially corner blocks that can be more easily subdivided. See past the existing property on the site and recognise the potential in the land itself.
Strategy #2 – Distressed Sales
Identifying properties being sold for under market value is another strategy that can deliver big dividends. Distressed sales, which include deceased estates and bank foreclosures, results in property needing to be sold urgently, often at below market value.
If you have ready access to funds and can act quickly, distressed sales can deliver a huge return, whether you decide to hold on to the property for a while or on-sell for profit. It’s always a win when investors secure a property for below market price.
How to Find Distressed Sales: ensure you’re on the mailing list for local agents so you hear about new opportunities before they go on the market. There are also membership sites you can join for a fee that identify distressed properties for sale nationwide.
Strategy #3 – Real Estate Investment Trusts (REITs)
Real Estate Investment Trusts (REITs) combine your money with money from other investors, using the funds to invest in property on your behalf. An investment manager selects and buys properties on behalf of the trust and manages maintenance, administration, rental collection and improvements.
With someone else doing the work for you, this is an attractive investment strategy for property investors. Depending on the REIT, you may receive regular distributions, paid quarterly or half-yearly and you might also benefit from capital gain if the value of the scheme’s underlying assets increases.
How to Find REITs: contact a property expert to discover the best performing REITs. They can advise you on potential returns, explain the risks of your investment and guide you towards long term success in property investing.
Strategy #4: Rezoning
Rezoning a property can instantly increase its value. Depending on your location, changing the zoning of your land from residential to mixed-use or to low or medium density opens up more options when it comes to capitalising on your investment.
Before proceeding with this approach, it’s important to check with your local council to understand their zoning rules. You will need to know the current zoning of the property, the category you want to change it to and whether your plans will fit with local zoning laws.
How to Find Rezoning Opportunities: often properties are marketed with rezoning potential so keep an eye out for local listings. Get to know your target area so you can immediately identify properties ripe for rezoning as soon as they come to market.
Strategy #5: Purchasing New Property
Purchasing a unit off the plan or investing in a house and land package is another strategy that could deliver a win for you. While this can be an expensive option, especially when you first start out, buying a new property has many advantages when you purchase wisely.
There are attractive depreciation benefits and low maintenance costs if you decide to buy and hold a new property. Depending on the market, you might also be able to sell your new property for a profit straight up, delivering an immediate return on your investment.
How to Find New Property: expand your networks in real estate and building development so you can be among the first to know about upcoming projects in your target locations. Do your research to ensure your chosen project has a realistic prospect of delivering a positive return.
If you’re looking for a winning property strategy our property experts at Vision Property & Finance can guide you in planning for your future success. We can help you get the most from property investment and position you for success in 2020 and beyond. Contact our Sydney office on 02 8354 3000, talk to our Newcastle office on 02 4014 1999 or get in touch with us here.
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