Residential vs Commercial and Capital City vs Regional
I recently enjoyed a family holiday in Port Douglas. It is such a beautiful part of the world, with the Great Barrier Reef and Daintree rainforest on your doorstep, there is so much beauty to see and so much to do. Being my first visit, I enjoyed the adventure of exploring everything Port Douglas has to offer and I was certainly impressed!
However, I could not help but notice the numerous vacant shop fronts on the main street and at the famous Marina Mirage. And it does sadden me to see this. I assume there was a time in history when all of these shops were full and the town was bustling!
It was a good reminder for me, why I have stuck to residential property rather than commercial property through my investing journey. Whilst commercial investing may boast a higher rate of return, the risk of vacancy and the difficulty to find a new tenant for a commercial investment is far greater than residential property. Commercial property success is also more closely linked with the economic climate.
It was also a good reminder for me of why I stick to investing in the capital cities rather than regional areas. Whilst the idea of owning a water front house in Port Douglas is extremely appealing, it does not fit with my investment strategy. I am not a big risk taker and this is why I stick to the capital cities rather than chasing high rental returns or unusually high periods of capital growth that regional centres can sometimes offer.
Throughout my investing journey I have never invested with the intention of getting rich quickly. I do not believe that property is a get rich quick scheme. So I have never been swayed away from my property investing strategy which is fundamentally a buy and hold strategy. What I do believe, is that if you understand your risk appetite, find a strategy that matches it, and apply a good knowledge of the fundamentals with every decision you make, then over the long term property can make you very wealthy.
The moral of the story is…
Understand your risk appetite and find a property investing strategy that matches it and stick to it. Do not be swayed by Get Rich Quick Schemes!
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At the tender age of 18, Marissa Schulze already possessed a financial understanding well beyond her years. She saved up her first deposit while still living at home with her parents and bought her first property. Now, 11 years later, her portfolio of 16 properties brings her $3,710 in rent each week; has amassed equity of more than $1.5m. She now runs her own mortgage broker firm in Adelaide, along with her husband and, still at just 30 years of age, she is only getting started.
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