How to be a Property Investor

One reason for solid growth in property values in Australia in recent years is the number of people wanting to become a property investor.

People want to know how to be a property investor because they believe the key to financial freedom is to invest in safe assets, using equity in their own homes and other borrowed funds, with the potential for solid capital growth. A key to becoming a property investor with the goal of financial freedom is a medium to long term holding strategy.

As an accountant I have seen many clients who begin with the same question - "How to be a property investor" and end up becoming property traders. Property traders buy and sell, sometimes improving the property in the process with renovations.

Some of these property traders do very well. However, profits from trading property are diminished by acquisition/sale cost, renovation costs and Capital Gains Tax (CGT). Of course this strategy also relies almost entirely on a growth market. If I ask those clients if they wish they still owned the properties they traded they invariably answer "yes".

So, if your goal is financial freedom and you want to know how to be a property investor this is an important principle - a medium to long term holding strategy.

When people decide they want to know how to be a property investor they often know intuitively that property enjoys a long history of steady growth. While there has been periods in the past where property values have declined they are brief periods and don't happen often.

Historically, direct property is one of the best performing asset classes over the long term. Based on statistics over the past 100 years, a property located in a good area close to amenities, can double in value every 7-12 years. Again, for people who want to know how to be a property investor, a medium to long term holding strategy is an effective key to financial freedom.

For people who want to know how to be a property investor there are other benefits to a medium to long term holding strategy:


  • With effective property management, property can provide stable rental income
  • Substantial tax benefits can apply
  • Over time, equity that becomes available from growth in value can be accessed to build a portfolio of investment properties.

For people who want to know how to be a property investor this is a very simple, yet sound, principle I have observed as an accountant/tax agent for many years.

Finally, we prepare many tax returns and property investment analysis reports for our clients. Many new property investors are surprised to learn that an investment property can be acquired for as little as a regular car payment. For those who want to know how to be a property investor this concept can radically change the way they think.

We hope these principles will help you learn how to be a property investor.

By David Maynard

CEO My Tax Zone

Copyright 2014. My Tax Zone.