Property investment is not just for the super-rich, with about one in three landlords having an annual household income of under $100,000, a survey has found.
According to findings from LJ Hooker’s 2015 Investor/Tenant Survey, most landlords invest at least 20 kilometres from where they live, and millennials who have forged their way into investment own an average of two properties.
Of more than 1700 landlords surveyed across Australia, 37 per cent have an annual household income of under $100,000.
A further 29 per cent earn between $100,000 and $150,000, and 34 per cent have an income of more than $150,000 a year.
With landlords, aged between 18 to 24, owning two properties on average, it’s proof that it’s never too early to invest – or ask for help to do so.
In comparison, a typical investor aged between 55 and 64 had a portfolio with about three, and those who turned 65 tended to sell down a part of their portfolio to fund their retirement.
LJ Hooker national research manager Mathew Tiller said a household income of $100,000 outside of Sydney could go a long way.
Even in Sydney, investors with a sub-$100,000 household income could look at studios or one-bedroom units in the north-west such as Ryde and Epping.
Mr Tiller said many young professionals recognised they needed to start investing to get into the property market.
Rather than selling their investment and buying a family home, they might hold onto their first investment and purchase a second as a part of their investment and wealth-creation strategy, he said.
Ray White chairman Brian White said financial systems and banks were more supportive of young people owning property than many times in the past, such as requiring smaller deposits.
Many young people now had well-paying jobs, he said, which was always a great interest to finance institutions.
“I’m finding there’s been a lot of support by parents to help younger people get started on their property portfolios,” Mr White said.
“While that’s not brand new, it’s probably as strong as ever.”
The survey also found investors looked beyond their backyards for the right property.
Overall, 63 per cent of investors own a property that is at least 20 kilometres from where they live, including 14 per cent interstate.
Fewer than one in five own a property within five kilometres of their residence.
Mr Tiller said investors were astute enough to look for properties that suited their investment strategy as opposed to targeting areas where they wanted to buy.
But the majority of landlords invested in the same capital cities or region as where they lived because they were familiar with the fundamental drivers of the market, he said.
The LJ Hooker survey was conducted online.
This article was originally published by Domain on 12 February 2016. It represents the views of the author only and does not necessarily reflect the views of AMP.
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