Residential Property Investment Returns
Listed below is a schedule of Residential Property Investment Returns, as based on recent researched property sales. All preparatory information on residential property investment is contained within the "Research Steps" section. Obviously residential development property returns are higher because the risk is higher. Be aware that returns frequently quoted on development property are developer’s margin on costs and not annual returns. This is vastly different if the development takes more than one year, which is often the case. Unless otherwise stated the holding period on investment property within this site is 10 years. You should be aware from your research in the RESEARCH STEPS (step 7) just what the capital gain projections should be in the chosen area. When you locate your residential property or properties (step 6) you are then ready to inspect or arrange an inspection and organise a residential property feasibility study.
All preparatory information on Residential Property investment is contained within the RESEARCH STEPS section. Click here to view Residential Property Inspection Checklist Click here to view Existing Property - Feasibility Study Report Inputs Click here to view Development Property - Feasibility Study Report Inputs RESIDENTIAL VERSUS STOCK MARKET RETURNS - courtesy The Australian Financial Review - January 2008 RESIDENTIAL PROPERTY INVESTMENT OPPORTUNITIES, BENCHMARKS & SALES Contact our office for updates.
CAPITAL GROWTH ASSESSMENT This is extremely difficult to project, however this needs to be included in the model. Some classes of property may have different rates of growth to others. For example houses which have a larger land component than apartments (land being the more finite resource) may have an historical higher capital gain than apartments. This historical level of mean values over a defined period may tell a story. Is this class of property ready to take off for whatever reason, or has it just enjoyed an unprecedented rise? Has that rise tapered off or dropped. Recent sales of the same property in close time frames or sales of very similar property may show a drop which should be reflected in your offer. The capital growth aspect is more important with residential property. This is because the gross returns on capital invested are traditionally low. This means that capital growth is the main component of total financial gain. Get this wrong & you could be disappointed. Should you buy property with a high yield and low growth or vice versa? Only a feasibility study can tell you what the final financial gain will be.
|
