Being borderless investor - Part 1

So what does it mean to be a borderless investor? It bears a significant definition, that is, investing without border. And in the ground of property investment, this would ultimately mean investing in interstate as well as in different property types. In fact, the idea of investing internationally is no longer foreign to many accomplished investors.

One of the key aspects in successful property investment is diversification and being borderless is the most fundamental way to achieve diversification. Let us consider the world renowned monopoly board game, where the objective is to become the wealthiest player through buying, renting and selling of property. In some ways, these are identical to how property transactions are generally carried out in the real world. However if our aim is only to collect a particular colour set, then our odds of ending up as the monopolist are heavily compromised from the outset. It conveys a simple yet striking message to all property investors that without diversification, there is almost no light at the end of the tunnel.

From the year 2013 till present day, we experienced the strong growth in both Sydney and Melbourne markets, whereas the remaining states underperformed with just moderate growth at best during this period. Conversely, when the Sydney market endured a decade of stagnation prior to this latest boom, the other states were generating a more profitable return. Australia comprises six states and various territories, and within each state or territory is made up of numerous location markets, and within each location has its own submarkets, and all are in different stages of their investment cycles. Without diversification we are to rely strongly on the assumption that almost all of our property transactions have to occur at the right time of the real estate cycle for that specific market.

We will continue our discussion and analysis on this subject in the next article.

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