To own a home is the most basic of one’s need and livelihood. To most families, working towards eventual home ownership provides a sense of purpose, belonging, physical security and well-being.

On the other hand, there are also people who may be long time renters for a multitude of different reasons - personal circumstances or preferences, financial constraints or otherwise. Given the complexity of today’s financial and equity markets, it is important to appreciate there are many investment options available to the investor and property investment is merely one of many.

There are also investors who may alternate between owning and renting over a period of time in an attempt to maximise their investment return. The choice between paying mortgage and paying rent may be dictated by a number of factors such as property market trends, interest rates, personal circumstances and preferences, risk aversion and government policy.

By far the majority of people who get into the property market buy their first home which they intend to live in. Rather than living with family or paying rent, they see that paying down a mortgage to own a home will provide the long term financial and physical security.

Beyond this first home ownership, investors who buy a second property do it for a variety of reasons. Some investors take a long term view of property and see capital growth as a good return on their investment. Yet some others may be in steady and high paying jobs and use negative gearing as an avenue to minimise their tax liability. There are business people who buy commercial or retail property to assist in growing their businesses where expenses incurred from owing the property are tax deductible against their business income.

Whether buying property to invest or to live-in, you need to be very clear of your individual goals and personal circumstances. Almost always, these circumstances are unique to each persona dna therefore, people buy property for all type of reasons.

Most people who invest in property will agree that location is the single most important factor in the decision making process. Whether you are buying a property to live in or as an investment, locations which are close to public amenities such as transport, hospitals, shops, local attractions such as beaches, ocean fronts, parks, cafe and restaurants will generally have greater advantages and benefits over those which lack these features.

However, your needs and preferences as an owner-occupier may differ vastly from the needs of a tenant. The key question is to ask yourself whether you are buying the property as your principal place of residence (PPOR) or as an investment. Putting yourself in the position of living in a particular location or having a prospective tenant’s mindset will also provide good insight as to the type of property and its location.

As real estate is an appreciating class of asset over a long period of time, it follows that investing in real estate is a long-term venture. When contemplating to invest in property, you must be certain you are able to afford holding the property over the long term (a minimum of five years). In general, capital growth in property only comes with time and you must have the cash flow to support and maintain the expenses of your investment property. Sure, there may be rare situations where one can profit from buying and selling real estate over a short period of time eg. buying off-the-plan apartments during boom times and off-loading it upon completion. However, I will recommend against this strategy unless you are an experienced investors and have a strong understanding of your local property market.

Buying your own home is usually the first big investment many people make in their lifetime. However, your first investment in property need not be your home. Many young people are now choosing to make small investments in property while staying with parents. It is the hope that these small investments will eventually fund the purchase of their dream home.

The most basic step in considering your first property is to ascertain your budget, that is, how much do I have to put down as a deposit (usually 10% of the purchase price of the property if you are successful in securing a home loan) and the associated costs such as stamp duty, legal fees and initial outgoings. I would allow for an additional 5 -10% of the purchase price, depending on the type of property for these additional acquisition costs.

Saving up spare cash and getting financial help from parents are among the most common ways towards a deposit although first home buyers are now using new ways to find that first deposit such as sharing with siblings and friends.

One of the most important principle to remember when investing in property, is to take a long term view. Usually, this view is in the proximity of at least 5 years and sometimes, people look beyond ever selling their property at all! One common strategy of experienced investors is to "buy and buy but never ever sell".

The question of when to buy is actually far less important than the act of buying itself. A common situation is where investors procrastinate for the market to fall in order to find a bargain. During a soft market, some investors are inclined to wait for prices to fall further and when prices start to rise, they think that they should have bought earlier, all the time missing opportunities to enter the market.

History shows that property prices have doubled on average every 7 to 10 years over the last 50 years. Taking this past trend into account and the impossible task of knowing when prices are at their lowest point, it is best to say that “Now is the right time to buy”. Moreover, this history reinforces the notion that one needs to take a long term view in order to ultimately reap the benefits of an investment in property.

The type of real estate which you may eventually invest in may be a plot of vacant land, residential property which may include houses, apartments, commercial property and industrial property.

The main factors which influence and determining the type of residential property to buy include the following:

a) Budget ~ houses are generally more expensive than apartments. For most young people entering the property market, apartments and studio units are generally more feasible from a financial perspective than houses. In addition, apartments have generally lower maintenance costs than houses although one needs to be aware of strata levies which are applicable to apartments and not houses.

b) Personal circumstances ~ families will generally require larger living spaces and therefore, this group of buyers tend to prefer living in a house than an apartment while singles and couples may find apartments a more conducive to their lifestyle needs.

c) Personal preferences ~ your personality and lifestyle preferences will influence your choice of location, demographics, public amenities such as schools and transport.

d) Yield ~ again, depending on your investment goals of whether to live-in or invest, apartments will generally return higher yields than houses and vacant land, easier to maintain and offer higher security for occupants.

e) Capital growth ~houses and landed property will generally command higher capital growth than apartments over the long term.

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