Investment Property Strategies - A Definitive List
Hi,
I'm new to the forum and have been sponging up as much information as I can, and found a few comments hitting home especially one by one of the senior members about how many focus on the IP itself instead of their strategy, with the IP being akin to the vehicle and the strategy being the driving force behind it.
I wondered if I was aware of all strategies, so I listed them out and thought others may benefit. I found many threads mentioning them but not one definitive list. If there is one that I've overlooked I'm happy to delete this post. Please feel free to correct or add any additional ones I haven?t listed:
1 - buy and hold (long term): purchase a property with the goal of holding long term
2 - short term capital growth: purchase a property with the goal of achieving short term capital growth before selling or re-valuing property
3a - renovate and sell: purchase a property with the goal of increasing its value by -renovating it before selling
3b - renovate and hold: purchase a property with the goal of increasing its value to then hold
4a - property development: typically involves levelling an existing building, or beginning on fresh land, and building an entire new building from scratch
4b - sub-divisons: is the act of dividing land into pieces to sell or otherwise develop.
- Managed Super Funds (MSFs): involves trusting a financial institution to invest your money in property shares and portfolios
- defence housing: purchase a property to then engage in a unique leasing arrangement typically varying from 3 to 12 years
- National Rental Affordability Scheme (NRAS): a commonwealth or state scheme that offers annual incentives per dwelling per year typically for ten years
- holiday home: purchase a property with the view to use as a holiday home but also rent out
- co-investment with family &/or friends: when multiple parties band together to purchase a property
- flips: purchasing and selling a property before the original purchase has been settled
- wraps: purchasing a property and paying instalments to the seller instead of taking out a loan
- purchase / lease options: is an agreement between 2 parties that entitles the purchaser the right to take up the option to purchase the property (or land), typically at a fixed price, from the other party during a specified time period. For this right the buyer is typically charged an option premium.
- Listed Property Trusts (LPTs): provides investors with access to property and property related securities listed primarily on the Australian Stock Exchange. These trusts invest in REIQ and listed property securities whose dominant business is property ownership, property funds management or property development. Unit trusts of property assets which are not listed on a stock exchange are known as unlisted property trusts (UPTs).
- Joint Venture Agreements (JVAs): is like a partnership that is entered into for a specific investment goal or purpose. It comprises of a money partner (investor) and a Vendor Financier (Co-Venturer). They range from simple projects (rental property) to more complex (purchase for development and sale), essentially based on profit share (profit split) rather than fee or commission based.
- Syndicates / crowdfunding: is the practice of funding a property's purchase by raising the funds typically from a large number of people, typically via the internet.
I haven't listed home ownership (eg. PPoR) as a strategy.
Hi,
I'm new to the forum and have been sponging up as much information as I can, and found a few comments hitting home especially one by one of the senior members about how many focus on the IP itself instead of their strategy, with the IP being akin to the vehicle and the strategy being the driving force behind it.
I wondered if I was aware of all strategies, so I listed them out and thought others may benefit. I found many threads mentioning them but not one definitive list. If there is one that I've overlooked I'm happy to delete this post. Please feel free to correct or add any additional ones I haven?t listed:
1 - buy and hold (long term): purchase a property with the goal of holding long term
2 - short term capital growth: purchase a property with the goal of achieving short term capital growth before selling or re-valuing property
3a - renovate and sell: purchase a property with the goal of increasing its value by -renovating it before selling
3b - renovate and hold: purchase a property with the goal of increasing its value to then hold
4a - property development: typically involves levelling an existing building, or beginning on fresh land, and building an entire new building from scratch
4b - sub-divisons: is the act of dividing land into pieces to sell or otherwise develop.
- Managed Super Funds (MSFs): involves trusting a financial institution to invest your money in property shares and portfolios
- defence housing: purchase a property to then engage in a unique leasing arrangement typically varying from 3 to 12 years
- National Rental Affordability Scheme (NRAS): a commonwealth or state scheme that offers annual incentives per dwelling per year typically for ten years
- holiday home: purchase a property with the view to use as a holiday home but also rent out
- co-investment with family &/or friends: when multiple parties band together to purchase a property
- flips: purchasing and selling a property before the original purchase has been settled
- wraps: purchasing a property and paying instalments to the seller instead of taking out a loan
- purchase / lease options: is an agreement between 2 parties that entitles the purchaser the right to take up the option to purchase the property (or land), typically at a fixed price, from the other party during a specified time period. For this right the buyer is typically charged an option premium.
- Listed Property Trusts (LPTs): provides investors with access to property and property related securities listed primarily on the Australian Stock Exchange. These trusts invest in REIQ and listed property securities whose dominant business is property ownership, property funds management or property development. Unit trusts of property assets which are not listed on a stock exchange are known as unlisted property trusts (UPTs).
- Joint Venture Agreements (JVAs): is like a partnership that is entered into for a specific investment goal or purpose. It comprises of a money partner (investor) and a Vendor Financier (Co-Venturer). They range from simple projects (rental property) to more complex (purchase for development and sale), essentially based on profit share (profit split) rather than fee or commission based.
- Syndicates / crowdfunding: is the practice of funding a property's purchase by raising the funds typically from a large number of people, typically via the internet.
I haven't listed home ownership (eg. PPoR) as a strategy.
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