Australians are said to be in love with bricks and mortar but new research has shown that we are growing anxious about jumping into property investment.
A Galaxy Research survey conducted by lender State Custodians has found that 65% of Australians are anxious about whether property investment is viable.
It found that 35% of people felt it was too hard to come up with enough money for a deposit, while 33% were worried they would be taking on too much debt, while 23% say it’s too expensive to find an investment property where they live.
According to CoreLogic, there are more than 2.6 million investor-owned properties in Australia and investors own on average one investment property each.
The research also highlighted other potential barriers – while 74% of Gen Xers say they would like an investment property, 21% say it can be hard to secure a loan.
Lenders have recently tightened their policies. Here are some fears when it comes to investment purchase.
Investing fear #1: It’s too hard to come up with a deposit
“I think it’s just looking outside the square. You can come up with some other form of collateral. It doesn’t have to be a cash deposit. You can borrow some of the equity in your home and use that to fund the deposit and costs."
Investing fear #2: I’m taking on too much debt
“We’ve all been trained by our parents to pay cash for everything. But there are three different kinds of debt – horrible debt, tolerable debt and productive debt.
“All the wealthy people in the world have lots of productive debt and not much horrible debt. Most people think all debt is the same, but it’s not.”
Investing fear #3: It’s too expensive to find a property here
“Be a borderless property investor. If you’re in Sydney, why don’t you buy something in Brisbane or Adelaide? If you’re in a country town and your market’s not performing, you don’t have to buy in your backyard.”
Investing fear #4: It’s hard to secure a loan
“Get an investment-savvy mortgage broker to do the legwork for you. They’re dealing with the changing landscape hourly.”