Real estate investment is a great way to secure your future. It will give you a stable stream of profit and a stress-free retirement—provided that you commit to lucrative properties and avoid investment risks. However, both are difficult feats if you lack the knowledge and experience in retirement planning in Melbourne.
Why the Risks Shouldn’t Put You Off from Investing in Properties
Before we delve into the perils of property investment, let’s establish that risks are possibilities. They are not definite outcomes. When managed and accomplished with consideration of its risks, real estate investment is a profitable venture. So, don’t dismiss property investments. Otherwise, you’ll miss out on the following advantages:
- Higher return on investment due to leverage
- Better stability since property markets don’t fluctuate as much as stock markets
- Enjoy tax benefits from property-related expenses
- The chance to increase your property value with improvements
- The opportunity to amass capital gains by employing the “buy and hold” strategy
Property investment also offers alternative options for various situations. For instance, if you’re set on purchasing a lucrative property but lack the financial means to secure it, consider engaging in fractional investment in Melbourne. It will give you the right to a portion of the property’s returns without shouldering all the costs of its ownership. Consult an investment property specialist to find out more about this alternative investment strategy.
The Risks of Property Investment
Here are some of the biggest risks you’ll take when investing in properties.
- Liquidity Risks refer to the possibility that an investor may be unable to secure or sell a property when they want to due to inadequate opportunities.
- Market Risks, like a market-wide price crash, are broad and indiscriminate. As a result, they’re difficult to avoid. Purchasing and investing in properties in different states does reduce the risk; however, it will not hold up against an extensive market slump.
- Interest Rate Risks occur when an investor purchases security offering a fixed rate of return, which may decline in value due to an increase in interest rates.
- Specific Risks, also known as business/unsystematic risks, refer to the danger of obtaining a property that delivers sub-optimal returns, consequently increasing opportunity costs.
How Retirement Planning Consultants Minimize Investment Risks
Aside from providing real estate management assistance, property consultants that specialise in retirement planning can also take measures to minimise—if not prevent—the risks discussed above. Here are some of the ways experts can mitigate them.
- To reduce liquidity risks, invest in areas that exhibit constrained supply and eminent demand.
- To minimise market risks, focus more on longer investment time durations to allow faster recovery in case of market crashes. Investment property consultants in Melbourne also recommend investing in assets that are unrelated to real estate.
- To mitigate interest rate risks, utilise efficient cash flow management and prudent fixed-rate mortgages.
- To prevent specific risks, research and acquire properties of different types in various states.
Take note: these are only some of the strategies property consultants employ to reduce investment risks. Competitive property consultancy companies, like Safe Super Homes, typically customise their risk reduction approaches to their client’s situation.
Secure Your Future with Safe Super Homes
Have a hassle-free retirement with our expert financial management solutions. If you want to take a hands-on approach with your retirement plans, we can teach you everything that you need to know to make worthwhile property investments, including how to:
- Manage and maximise your finances and properties
- Analyse Australia’s financial climate and how it affects property investments
- Plan your investment ventures to ensure their success
We also hold comprehensive seminars about timely property investment topics. If you’d rather let the professionals handle your finances and ventures, you can count on our property investment specialists. Click here to learn more about our services.
Secure your future today with worthwhile property investments. Call Safe Super Homes now at (03) 9702 2595 for professional financial management solutions, property investment assistance, and expert retirement planning in Melbourne.