Invest
The importance of diversification in the property market
Despite the strong gains in sections of the property market, investors are being reminded not to “put all your eggs in one basket”.
The importance of diversification in the property market
Despite the strong gains in sections of the property market, investors are being reminded not to “put all your eggs in one basket”.
In a conversation on nestegg sister publication Smart Property Investment’s podcast, director of Rethink Investing Scott O’Neill discusses the importance of diversification when building a property portfolio.
Having previously invested in residential property, Mr O’Neill explained he has “moved more into commercial, so I’ve purchased four more commercials since then”.
“[I’ve] invested in a syndicate as well which is basically purchasing large-scale commercial assets but owning portions of it. It’s almost like a form of diversification. You’ve got bigger, better-quality tenants and you don’t have to own 100 per cent of the assets sometimes,” the property investor explained.
Knowing the businesses
Just like investing in residential property, it is vital for investors in commercial real estate to understand the market they are buying into.
While some leases “just need a tidy-up”, others have potential red flags that property managers need to be aware of.
“One thing I would always try and get from the current owner is bank statements, or at least rental receipts to see the timing of their payment, because if they’re paying in the first three days of every month for the last 12 months, that’s a pretty good indication they’re going to do that when you own it,” Mr O’Neill explained.
Finally, the property manager advocates for visiting the site and having a conversation with the locals before purchasing any retail assets.
“A lot of just on-the-ground research, like going to see these properties, especially when it’s retail-related,” Mr O’Neill said.
“I don’t go look at all warehouses for instance, because you don’t care about foot traffic and stuff like that, but a good retail asset, like you know, a shopping centre, you need to go and just sit in it, have a chat to the café owners and that.”
Mr O’Neill concluded: “They’re always going to be the most negative, I’ve found, because, especially if some random [buyer] starts asking how business is, what benefit do they have to say they’re going great? But it’s still good to hear what they’ve got to say and just take it on board.”
Read more about properties in this article Australia property market.
RELATED ARTICLES
About the author
About the author
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Trust as a performance multiplier in Australia's real estate market
In Australia’s A$10–11 trillion housing market, trust is emerging as a crucial factor that sellers and agencies can no longer afford to overlook. Traditionally viewed as a soft metric, trust is now ...Read more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Trust as a performance multiplier in Australia's real estate market
In Australia’s A$10–11 trillion housing market, trust is emerging as a crucial factor that sellers and agencies can no longer afford to overlook. Traditionally viewed as a soft metric, trust is now ...Read more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
