Investment in Sydney property and your future

We had a girlfriend approach us recently about some advice on selling her house in Sydney. Her and her husband had bought the property about 5 years ago when it was un-renovated they bought it at the top of the market. They did all the right things when renovating the property and added some value early on. After owning it for about 6 months her husband got a job in Hong Kong, he is a futures trader. They now live in Hong Kong.

The conversation that we had recently was fuelled by her husband’s career, he felt he wanted to sell now before the market crashed and invest the proceeds into the cash economy.   Being a futures trader he is looking at the global economy and investing clients money in non-traditional commodities, which are termed “financial futures” these may be currencies, securities or financial instruments. However applying the same principals to the property market in Sydney can result in failure.

Quite simply put you can’t buy real estate like you trade in futures, one is tangible and the other is intangible. For starters the entry and exit into and out of the property market and costs associated are your overall liability, these need to be factored in when looking at your potential gain. If you are looking at a short-term windfall you may be disappointed. Also add in interest repayments, repairs and any additional costs along the way.

The expense associated with owning property can be huge. The upside though is that you have much more control over your investment. It is tangible, so the first plus is that you can see it! From there you can make changes, open up the floor plan, add on a room, renovate the kitchen and bathroom to add value, rent it out, rent it out fully-furnished, or live in it. You get the drift.   You have much more control over your destiny with property. History has proved itself time and time again that property does increase in value over time.

Our friend that lives in Hong Kong will want to return back to Australia at one stage and our advice to her is to hold on and keep doing what they are doing which is renting the property out and sitting on a steady gain. Of course there are highs and lows in the greater Sydney markets. Investing within that 12km radius of the CBD, and looking for the right attributes in a property, coupled with buying well is a great strategy to build equity.