How to become a property millionaire in 2016

After a number of boom years in the Australian property market, prices have begun to ease, but experts remain confident that no crash is in sight.

In this type of environment – with property becoming more affordable yet still holding value – for those which find themselves with a little spare cash, there is a very real opportunity for everyday Aussies to become property millionaires through investment.

Also read: How this Aussie couple became property millionaires by staying put

Here are some top tips to get rich with property investment.

Pick the right location

The right state, suburb and location are vital for good property investment.

Once you’ve picked your suburb you need to look for a suburb with a long history of strong capital growth outperforming the averages.

Finally, look for the right location within that suburb.

Some livable streets always outperform others, and within those streets, some properties will be more desirable that others and therefore will outperform as investments by increasing in value.

Also read: 126 Aussie suburbs join the property millionaire club

Pick your timing

Metropole Property Strategists founder and leading property author, Michael Yardney, believes that timing is just as important as location when it comes to any investment destination, but especially in smaller markets.

“It starts with buying at the right state of the economic and property cycle. I look at the big picture – how’s the economy performing and where are we in the property cycle?” he said.

The key to investing at the right time in any market is knowing when the market has reached a favorable supply and demand balance.

Pay the right price

Rather than looking for a ‘cheap’ property, look for the right property at a good price.

You’re more likely to make more money by buying a valuable property at the right time, than buying a ‘cheap’ property which will likely remain in the ‘cheap’ bracket.

Yardney says he would buy a property below its intrinsic value, which is why he avoids new and off-the-plan properties which come at a premium price.

Also read: Where will the world’s millionaires invest in 2016?

Educate yourself

Don’t wait until you’re a property expert before dipping into the property investment market, that would take half a lifetime.

Instead the real experts suggest you learn as much as you need, stick to your limit of knowledge and ask the experts plenty of questions along the process.

Aim for passive income

The best way to become wealthy is by having passive income where you continue to get paid for work you have already done – rather than linear income such as wages.

Property investors typically initially work long hours, save a deposit then invest into property and the reward is sound investment returns in the form of capital growth and rental returns.

Also read: Nine most expensive Aussie suburbs in 2015

Be patient

Warren Buffett once said: “Wealth is the transfer of money from the impatient to the patient.”

To become a successful property investor requires patience and persistence. You must not only get started, but you must continue on and follow through, Yardney said.

Residential property is a long-term investment. It’s not a get rich quick scheme.

Instead of looking for the latest fads or speculative growth areas, create your own capital growth by buying a good property at a fair price then adding value through renovations and redevelopments.