Once you have an understanding of the need to make your money work for you, you then need to decide how to best do that.
This Lesson examines the advantages of direct property investment as an asset class. Property is something most Australians understand. It is a tangible asset, you can see, touch and feel bricks and mortar!
There are a number of reasons why property makes a solid investment choice and we look at each of these in turn.
In a free enterprise economy like Australia market forces largely determine what will be produced and at what price. It’s important to understand what influences demand for housing and also what constraints exist on the supply side of the equation. How responsive or ‘elastic’ the market is also has a significant influence on prices.
“What goes up, must come down” is a truism that applies to the housing market, as illustrated in ‘ The Property Cycle ‘ and is true of the wider economy, as modeled in the ‘Business Cycle’. Having the right investor mindset means being armed with this knowledge and investing in a sustainable way that allows you to ride out the movements around the trend.
One of the biggest mistakes investors make is to come in and out of the market and to follow the ‘herd mentality’.
Finally, we look at why buying new property is an advantage not only to the individual investor but to the economy as a whole.