Growth and Income – Ask for both!

Most investors will be looking to buy the property which has the best possible growth AND the best possible income.  Since we have already said that it is unnecessary to make a choice between the two, all clients should be encouraged to consider property for both its immediate or short-term future income generating capacity and its potential growth.

Buying a property with a great yield that won’t grow does not make sense. Neither does buying property which might grow well with low yields, as this will cost the investor too much money to hold while they wait for that growth.

The key for you is to anticipate which one, income or growth, holds the most importance in the short term.  As long as it is held for at least 10 years, a well-bought property should give both income and growth, as long as adequate research was carried out at the purchase phase.

If the area is showing signs that income will grow first, such as low vacancies, rental pressure and a population suddenly expanding, then this type of property suits those needing cash flow immediately.

If the area shows stable yields, but pressure on prices, then this type of property suits someone needing growth first. All property should be assessed for its capacity to achieve both outcomes over the medium to long term.