“The main benefits for recommending this strategy to your clients is long term growth and more affordable entry levels.
“It’s also a cheaper investment with longer term gains. Buying a regional property for $300,000 and renting it for a 5% per annum return, in a market that has low vacancy and more capital gain, makes more sense than buying an $800,000 unit in the city at 3.5% return with higher ongoing expenses.”
Braden added how this method is gaining in popularity because of a flat rental market and house prices increasing which mean the returns are not as good in urban centres.
He added: “We are getting a lot of owners with massive equity in their current homes who would like to invest in a property for their retirement where they might end up.
“This investment style mainly appeals to first time investors or second time investors and those closer to retirement.”
Offering value to your clients
Braden explains how recommending this method to your clients helps provide better service and value. However, before anyone takes this step, they should check it is right for them.
He explains: “I always recommend my clients get their current position checked by a professional to find out how much equity they have in their house or current properties and where their super is at.
“It is also wise to see a financial planner to see how you can use your savings to make more money. I always advise on areas with lots of future growth potential, areas with access to nearby airports with flights to Sydney/Melbourne, freeway upgrades, town upgrades and industrial growth.”