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Building your portfolio? How to make money from your properties in 2023

Building your portfolio? How to make money from your properties in 2023

As we start 2023, there’s no hiding from the fact that there are challenges for those investing in property. But what does this mean when it comes to making money from your investment property? Despite the slowing economy, there are some new opportunities to take advantage of allowing you to refocus your attention and continue to make strategic moves in 2023. Here we’ll be sharing our expert insight on which market trends to take advantage of and how to best utilise them to benefit your portfolio for the year ahead.

New rental tenants with borders opening

After two years of border closures, 2023 marks the year when Australia will once again become a go-to destination - with tourists and students returning to the country. This move will see an increase in demand for rental properties, likely intensifying the already strained housing shortage.

As a result, 2023 will be a prime time for those in the position to purchase property on the lower end of the scale and rent out in line with the rising rental rates. Purchasing property in areas with high rental demand and in line with key demographics will help to offset increasing interest rates and maintain property value.

Softening yields present long-term opportunity

For those looking for short-term gain or focusing on year-on-year yield, 2023 will present a softening. Potentially creating smaller profit margins or just breaking even dependent on the property price and yield expectations.

However, despite a somewhat dismal yearly output, those with a long-term strategy and wider outlook serve to benefit. As with any plan we create with our clients, we don’t guarantee quick returns but long-term movement towards a considered and measurable financial goal. Having this long-term view in place will allow you to think ahead and see the bigger picture. Enabling you to continuously move towards your financial goals and eventual financial freedom.

Moving with office trends

Sitting outside of residential, many large companies and corporations are buying up large assets in CBD locations, in the hope of bringing workers back into the office and rebuilding office culture. As a result, there is a glut of vacant B & C grade office properties available in city fringes and suburbs. This may see an opportunity for investors who want to make a quick turnaround - buying the property at a low price and selling on to fast-growing retailers who want to use the land to expand their retail offering.

Additionally, if you already purchase commercial property, the demand for co-working and hotdesking solutions is growing. So a restructuring of your current business model could look to increase the value of your property away from the traditional rental structure.

Purchasing of smaller niche assets

In addition to offices, there is also a gap in terms of business assets that are prime for the taking. With risk-averse mum & dad and individual investors pulling out of long-standing properties, those who have a stronger and more adaptable financial standing have an opportunity to take the helm. Spaces such as small office blocks, restaurants, pubs and retail are all worthwhile investments for those looking to expand their portfolio outside of residential.

Despite being higher-risk properties, they also offer potentially higher returns. With opportunities such as restructuring rental agreements from a fixed rate to CPI - there is potential to take advantage of rental increases across the board.

So whether you’re new to investing or are a more astute investor, 2023 does present its challenges but having a long-term view can ensure that you’ll continue to move towards your end  financial goals.

To understand how we set clients up for long term success and build profitable property portfolios, 
Book in with one of our Property Strategists today to start/continue your journey.