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Lifestyle Investment Properties can be positioned anywhere, whether it be the coast, city or rural areas. The term ‘lifestyle property’ refers to a balance between investment and lifestyle. You can rent out a property on a short let basis, and during other periods live there yourself.
Lifestyle properties have similar risks to all types of investments. This is why when looking at any type of investment, property or shares, it is important to research the investment yourself and choose an investment option tailored to your expectations. In the property market, researching the area and the market of your potential property is crucial to making a wise investment choice.
Lifestyle investment properties are generally thought to not have such a strong return as other investment properties. Many factors go into return rates, which makes it difficult to draw a comparison between lifestyle properties and other types of investment. Based on factors such as location, developing infrastructure, and property demand at that time a lifestyle investment property may perform either better or worse than another property type. Like all investment properties, your returns are partially reliant on the factors affecting the property at the time.
It is important to decide what your investment goals are. If you are after a holiday home you can make income off during the year, and can be claimed as a tax offset, a lifestyle property may suit your needs. However, if you are after a more reliable source of extra income or investment, the more traditional type of investment property may suit your investment needs.
Lifestyle properties are often considered ‘optional’, and in a tough real estate market, these types of properties can be the first to suffer. In recent years, the Gold Coast and Sunshine Coast (prime examples of locations where people often purchase lifestyle investment properties) have softened substantially due to the global financial crisis. In saying this, these locations are currently offering some of the best lifestyle property opportunities as developers are offering massive price reductions in areas which in the medium term will improve in performance.
Purchasing at the lower end of the lifestyle property cycle is always best, as in these market environments, there are added incentives from developers. These can include, and are not limited to, rental guarantees, furniture packages and price reductions.
It can be hard to time the real estate cycle, but any type of investment property is a long term decision and it pays to research. Minimise your risk factors by determining if the area is growing, what type of returns you can realistically expect from a property, as well as how you will ride out any risks which may arise.
The future trends of lifestyle property investment is hard to predict, however an industry professional will be able to help you navigate the factors that will best indicate what kind of return you can expect on your individual lifestyle property. For more information on lifestyle investment properties, speak to Which Property today.back to top