{"id":172195,"date":"2023-03-12T18:30:07","date_gmt":"2023-03-12T07:30:07","guid":{"rendered":"https:\/\/propertyupdate.com.au\/?p=172195"},"modified":"2023-03-06T11:36:17","modified_gmt":"2023-03-06T00:36:17","slug":"heres-how-ill-be-investing-in-property-in-2023","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/heres-how-ill-be-investing-in-property-in-2023\/","title":{"rendered":"Here\u2019s how I\u2019ll be investing in property in 2023"},"content":{"rendered":"

I'd like to share how I'll be investing in 2023.<\/p>\n

In fact, this is how our team at Metropole will be helping our clients invest in property in 2023.<\/p>\n

\"Investment\"<\/p>\n

Whether you\u2019re new to the game or you've already built a property portfolio you\u2019ll probably benefit from what I'm about to share, because even though each investor's needs are different, it's always interesting to know what other people are doing, and it may give you a reference point or a new perspective from which to think about your own plans and what you could be doing.<\/p>\n

And while I\u2019m going to share how I'm going to be investing in 2023, and how we\u2019ll be advising our clients at Metropole, in truth it's not that different from how I invested in 2022 or in years gone by, because over many, many years I have fine-tuned a strategy that has worked well for me and has helped many of our clients reach the ranks of those top 1% of property investors you own six or more properties.<\/p>\n

1. Firstly I\u2019m going to focus on capital growth<\/span><\/h2>\n

As long as I've been investing there has been the question of whether to invest for capital growth or for cash flow.<\/p>\n

<\/div>\n

Now to be honest I'm greedy and I want both, but there\u2019s no doubt that the more important factor to focus on is capital growth because that's where the real wealth in property investment is made.<\/p>\n

If you speak to anybody who has owned a property for any length of time and they work out how much rent they have collected, and particularly how much they've kept after tax and expenses, and they then compare the tax-free capital growth they have made, invariably the capital growth will be significantly more.<\/p>\n

Now I understand that cash flow is important, especially at times of rising interest rates and increasing holding costs for your property.<\/p>\n

But remember that cash that keeps you in the game, while capital growth gets you out of the rat race in the long term.<\/p>\n

Moving forward, as our property markets move through the next stages of the property cycle, we will have a number of years of subdued capital growth, and the markets will be fragmented with some areas significantly outperforming others with regard to capital growth.<\/p>\n

And, in general, these will be areas where the locals will have higher incomes and can afford to and will be prepared to pay to live in those locations.<\/p>\n

These will also be the gentrifying suburbs of our capital cities.<\/p>\n

Recognising that the location of my investment properties will do around 80% of the heavy lifting of my returns, I will remain focused on areas that I believe are primed for capital growth.<\/p>\n

\"Capital\"<\/p>\n

2. I will only invest in a capital city<\/span><\/h2>\n

Even though there will be investment opportunities in many regional towns around Australia, there will be more great opportunities in our 3 big capital cities where economic growth will lead to wages growth and stronger population growth, particularly through immigration.<\/p>\n

I\u2019ll be looking for locations within those cities that are in continuous strong demand by an affluent demographic \u2013 locations where people really want to live and aspire to live and are able and prepared to pay to live there.<\/p>\n

These should also be areas where there is strong demand from affluent tenants who can afford to and are prepared to pay higher rents and will be able to do so over the long term.<\/p>\n

Remember, your future cash flow will be dependent upon your tenants\u2019 ability to keep paying you higher rents.<\/p>\n

And of course, these locations are likely to remain resilient through all stages of the property cycle.<\/p>\n

This means I will avoid investing in outer suburbs where more people are living week to week and where they are being hurt more by the increasing cost of living as well as rising mortgage costs or rent.<\/p>\n

I will also avoid investing in potential future hot spots which may or may not lead to short-term capital growth and then become not spot.<\/p>\n

\"Investment<\/p>\n

3. Investment-grade properties<\/span><\/h2>\n

I'm only going to invest in prime properties,<\/strong> what I call \u201cinvestment grade properties\u201d<\/a> as this is the type of property that gives you the most growth and an easier ride along the way.<\/p>\n

In my mind, less than 4% of properties currently on the market are investment grade.<\/p>\n

Of course, there is plenty of \u201cinvestment stock\u201d out there, but don\u2019t confuse the two.<\/p>\n

You see... any property can become an investment - just kick the landlord out and put a tenant in and it becomes an investment, but I'm only going to invest in properties that will generate wealth-producing rates of return.<\/p>\n

Investment-grade properties:<\/strong><\/p>\n