Rapid, near overnight, renovations - as demonstrated on TV programmes like “The Block” – might seem like a sure fire way to generate money from property.
But in reality, creating wealth via property investment requires a long-term commitment and the old buy and hold strategy could be more financially rewarding for investors.
While holding your property, you can also accumulate equity faster using three exceedingly simple strategies according to Your Property Success founder Jane Slack-Smith.
Slack-Smith said that she has developed her own property portfolio by applying a three-pronged “trident strategy” to equity creation, which ultimately comes through capital growth.
- Investing in areas with the right growth potential and infrastructure.
This is the first – and most vital – prong when building a property portfolio according to Slack-Smith. “While it might take a while to create the reward, the good news is that you do all the hard work up front and then just wait for the equity to grow.”
- Buy below market value where possible.
This does require the knowledge to locate properties with the potential for a discount, and then to negotiate a good deal on them, she said.
“But a $40,000 discount on a $400,000 property is equivalent to 10%pa capital growth, or months of renovating to create the same value.”
- Add value via renovation, development or subdivision.
To reap the full benefits of a renovation it is vital to have selected a property with potential, she said.
“The key to creating equity is knowing how to do it, having a backup plan in case that does not work and a system to replicate it,” Slack-Smith said.
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