House and Land vs OTP

I’m always on the hunt for relevant info and I loved this - one of the best articles I’ve seen on this topic for a while. Here are a few paragraphs as a taster...

Did you layby a property this year?

How many property investors put a property on layby this year? If you are confused let me explain.

“The definition of a layby is a system of paying a deposit to secure an article for later purchase. In effect you make a purchase and only take delivery later.”

When you buy a house and land you pay a deposit and pay it off over time – put some money down, make regular payments and take delivery much later. Sounds like a layby to me. Ok, I agree it is stretching it just a bit but hey, it is the festive season after all.

But one part is different. With property, you buy today and pay it off in the future when it is worth much more.

I know, I know, that’s a very simplistic statement but fundamentally it is true. A property bought 20 years ago is worth more now than it was then. I understand there are ups and downs along the way and cash flow changes can occur to impact holding though managing these risks for the long term can mitigate the issues. I will clarify that statement with a disclaimer. It’s important to have a clear strategy and to purchase property that is located in areas that match our Value Criteria.

So it follows then that if you buy something today it should be worth more in the future.

Pretty valuable stuff, I’m sure you’ll agree! Why not check out the whole article here https://www.investorsdirect.com.au/house-and-land-vs-otp/ and share your thoughts with me afterwards: call (0432) 132-123 or email me at [email protected].

Thanks,

Arthur