Owning an investment property isn’t limited to the uber-rich. In fact, investors are usually people you interact with daily. Today, we’ll reveal which occupations are the nation’s most prolific property investors, and how you could potentially join them.
Owning a home has traditionally been the great Australian dream, but aspirations to own an investment property may not be far behind.
One-in-four households plan to invest in real estate over the next year, according to Agile Market Intelligence.
If they do, they’ll be joining the almost 2.3 million Australians who reported earning rental income in 2022-23 (the most recent Australian Tax Office figures).
What’s especially interesting, though, is that PropTrack research shows property investors span almost all adult ages, levels of income, and occupations.
But which occupations top the property investor list?
Topping the list is general manager with 65,559 property investors (no surprises there), with CEO/managing director coming in at third with 60,800, according to ATO 2021-2022 financial year data compiled by PropTrack.
But splitting them in second place is teachers (both primary and secondary) with 64,529 investors, while nurses come in at fourth (55,519) ahead of accountants (49,203) at fifth.
Other noteworthy top 20 occupations include electricians (12th with 21,397), truck drivers (18th with 15,378), and police (20th at 15,400).
With the above in mind, let’s look at four possible pathways to investing in property – even if you don’t boast a fancy job title or have substantial savings for a deposit.
Harness home equity
Home values nationally have risen 49.1% over the past five years.
That’s great news for home owners, many of whom may have seen an increase in their home equity (the difference between a home’s market value and the remaining home loan balance).
Depending on how much equity a home owner has, it may be possible to use part of this equity as a deposit on an investment property.
Get in touch with us to find out exactly how much home equity you have, and whether it could be put to work as a deposit on an investment.
Turn a first home into a rental
If you’re ready to upgrade to your next home, you may have considered holding onto your current place and renting it out.
It’s a strategy that could mean saving on selling costs. You may also be able to leverage accumulated equity to help fund the new home.
But if you’re thinking about this pathway to investing, it’s important to speak with us about financing arrangements. Not to mention an accountant, as it can have some considerations to navigate come tax time.
Rentvesting – weigh up the pros and cons
Rentvesting is all about renting where you live while owning an investment property in another, potentially more affordable, suburb.
The beauty of this approach is that you get to call your preferred suburb ‘home’, while having the opportunity to earn rental income, and potentially benefit from a rise in the value of the investment property over time.
According to PropTrack, rentvesting is on the rise, especially among first home buyers.
However, as with any investment strategy, there can be pros and cons.
When you buy as an investor, you’re unlikely to be eligible for first home owner grants or other first home buyer concessions.
This should be weighed against the rental income and potential tax savings an investment property may generate.
Co-investing – a possible boost to buying power
If your finances don’t stretch to buying an investment property solo, an alternative may be teaming up with family or friends as co-investors.
This strategy can be a way to pool financial resources and share costs.
However, there is also plenty to plan for, including how expenses will be divided, and working out an exit strategy if one owner wants to bail out ahead of the other co-owners.
If you feel co-buying could be an option that suits your goals, we can explain the various options to finance a property. Some lenders offer mortgages specifically designed for co-borrowers.
Talk to us
If you’re thinking about investing in property, it’s important to speak with a tax professional to understand the tax obligations involved, and weigh up whether property suits your investment needs and goals.
When it comes to financing a rental property, what matters is that you know the options available for your situation – and the buying strategy you have selected.
Like to learn more? Contact us today to find out if you could become a property investor.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
