After Australia's property boom cooled and rates rose, rental yields are climbing sharply. The play now is buying quality properties in good locations that generate strong cash flow today, then holding for the next capital growth cycle.
Okay, let's talk property growth in Australia. Here are some things we know. We've been through a big boom over the last few years in the property market, but things have started to calm down. Also, interest rates have gone up and the cost of owning a piece of real estate has gone up with it. But the question you've got to ask is, does that mean that it's not a good time to be buying real estate in Australia? I want you to think about this a little bit differently because while we've seen capital growth starting to go down, we've started to see rental yields start to go through the roof. So while interest rates have gone up, rental yields have really started to shoot up as well. So here's something to think about. What if for right now, while prices have calmed down, you were focusing on buying some good quality real estate in good quality locations that you are happy to own for a long-term period of time while you're getting some really strong rental yields in the marketplace so that you're set up waiting for the next property cycle to turn around. Different way of thinking about real estate investing, especially given that it is a long-term game. So what I want you to think about instead is how can we choose those properties that will tend to outperform the rest of the marketplace because they're more desirable, they're more livable, they're set up for the future, they're designed for your owner-occupier, someone who wants to live there and make it their home and find those properties that can potentially create their very own economy and outperform the rest of the marketplace. So you are not subject to the ups and downs of a potential capital growth cycle or capital growth bust.
