A property investment expert has urged Aussies to think carefully before buying real estate and says the move shouldn’t be seen as a ‘get rich quick’ scheme.
Open Corp Founder and CEO Cam McLellan said its important for people to identify their financial goals before they invest in property.
‘If you’re looking to get rich quick, property is not the thing for you,’ Mr McLellan, who bought his first investment property when he was in his 20s, told Daily Mail Australia.
‘[Investors] should be conscious that [the concept of] get rich quick equals lose money fast.’
Mr McLellan said a good property investment provides long-term financial results.
He said people can’t afford to think that the move is as easy as buying a bunch of properties that will set them up financially for life.
‘Investing is about building a safe slow portfolio to give you a long-term growth result so don’t think you’re going to get into it and set and forget,’ he said.
He revealed that his firm carefully considers the financial situation of each client to assess whether investing in a property is a realistic option for them.
Open Corp Founder and CEO Cam McLellan (pictured) said its important for people to identify their financial goals before they invest in property
These considerations include their income, the number of dependents they have and their existing work/contractual arrangement.
‘We identify the core reason for investing and what people want to achieve financially,’ Mr McLellan said.
‘Just having X amount of dollars in X amount of time isn’t going to get you there’.
He explained the financial strategy for each person depends on their income and career prospects.
‘We deal with a lot of professional athletes like AFL players and NBA players so we set their set their financial strategy up a lot different to someone, who sees themselves having a longer career,’ Mr McLellan said.
More than 2.2million Australians or 20 per cent of the nation’s 11.4million taxpayers own an investment property according to figures from the ATO.
More than 70 per cent of investors own at least one investment property while almost 20 per cent own two.
Mr McLellan, who has purchased a property every year for the last 30 years, said there are ways Aussies can invest in real estate more effectively.
He said one the biggest mistakes people make is they wait for the right time to invest and they miss out on the opportunity to buy and grow the value of their asset.
‘I’ve purchased property every single year since the first property I purchased, but some capital city markets [were] not good for investment at that point in time,’ Mr McLellan said.
More than 2.2million Australians or 20 per cent of the nation’s 11.4million taxpayers own an investment property according to figures from the ATO (pictured homes in Sydney’s south-west)
‘A lot of people wait on the side lines for the perfect time to invest.’
Mr McLellan said the key to property investment is identifying ways to enter the market while minimising risk.
He said this can be achieved by finding capital cities with ‘growth corridors’ such as infrastructure development that will lead to an increase in population.
‘Matching that with the council’s available supply in those areas that will get you the fastest growth and finding the best property for that specific area,’ Mr McLellan said.
‘Have a very clear strategy on how to pick a high performing property every time and don’t pick a loser, which will sit stagnant for a long period of time’.
The strategy has helped one of Mr McLellan’s clients Adam and Belinda Robinson amass an impressive portfolio of seven investment properties worth a massive $6million.
Ms Robinson previously told Daily Mail Australia Mr McLellan encouraged the couple to invest in properties outside of Sydney and the move paid off.
Mr McLellan (pictured) said the key to property investment is identifying ways to enter the market while minimising risk
‘That’s what was holding us back because we were just saving and waiting to buy something close to us,’ Ms Robinson said.
The latest figures by property website CoreLogic shows Brisbane, Adelaide and Perth experienced the strongest capital growth for houses and units this year.
The value of houses and units in greater Perth increased by 20.7 per cent and 23.7 per cent as of November 2024.
Greater Adelaide increased by 13.4 per cent and 18 per cent while the value across greater Brisbane increased by 11 per cent and 18 per cent.
Prices of houses in Perth experienced the strongest capital growth over the last five years with the value increasing by a massive 81.5 per cent.
Despite the financial advantages to owning investment properties, Mr McLellan said property investors aren’t helping the current housing crisis across Australia.
He said around 80 per cent of property investors purchase established properties, which means they do not add to the housing supply.
‘The issue is Australia is not building enough houses and we’re increasing the population,’ Mr McLellan said.
Despite the financial advantages to owning investment properties, Mr McLellan said property investors aren’t helping the current housing crisis across Australia (pictured Sydney’s CBD)
‘The government isn’t allowing enough building approvals to happen so we’re not building enough homes to meet the current supply let alone the increase population we’ve got forecasted.’
Figures from the Australian Bureau of Statistics (ABS) revealed approvals for dwellings across the country sunk to their lowest level in 12 years with 162,892 houses and apartments given approval as of June 2024.
The figure represents a 8.5 per cent decline from the previous year and the lowest since 2011-2012.
In the year to July, 432,150 migrants arrived in Australia, preliminary ABS data showed.
House prices in Australia continue to remain unaffordable with the median price of houses and units $872,000 and $662,000 according to figures by PropTrack.
Sydney remains the most expensive capital city to afford a home with the median price of a house and a unit in the harbour city valued at $1,453,000 and $818,000.
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