Unlike the stockmarket, there have been no earnings downgrades on rental housing. And unlike the stockmarket, the downturn in housing prices has been pretty moderate.

Melbourne-based investment adviser Atchison Consultants has compared the performance of asset classes for a decade; managing director Ken Atchison for even longer.

On the Atchison numbers, residential property has delivered a better total return - cash plus capital - than most other asset classes over the past decade.

On most time horizons - one, three, five or 10 years - residential property has outperformed Australian shares.

In the past year, as the more defensive assets have come to the fore, housing has fallen behind fixed interest and listed property.

(To make the comparison, Atchison uses the Real Estate Institute of Australia price series and assumes a net return of 3 per cent.)

John Edwards, the founder of residential property analyst Residex, cuts the numbers a different way.

Over a 10-year term (any 10 years in the past 33), says Edwards, housing has delivered a higher return, and less volatility, than equities or bonds.

"For the ordinary person, housing investments are best, provided they are held for 10 years and are not over-geared," Edwards says.

Of course, all these comparisons come with qualifications. The numbers do not account for the costs of maintenance or capital expenditure required for housing.  And there is the old caution: the past is no guarantee of the future.

Edwards has tracked the dynamics of house price growth, yield and total return back to 1906.

For the first half of the 20th century, when most Australians rented, price growth was low but gross yields were high, above 10 per cent. For those 50 years it was the cash yield that delivered the return.

Then, with the baby boom at the end of World War II, house prices took off. The rent yield, which approached 20 per cent in the first years of the postwar housing shortage, dropped for 60 years.

But what was lost in yield was made up in capital.

In 1948-2008, house prices rose through a series of booms, which at times delivered annual returns of more than 20 per cent.

Edwards says the market is headed back towards the conditions of the early 20th century. Everything will revert to being positively geared," he says. "It will become more like commercial property; it has to."

Parts of the following article came from the Weekend Australian Financial Review. It has been amended by Silverhall for the purpose of this blog post

Residential property is back on the map. It may not deliver right away but it will deliver - and it offers the certainty of rental income in shaky times.

Australia's 1.5 million housing landlords experienced a rent boom through the financial crisis.

Across the nation, rents rose 50 per cent between the 2006 census and that of June 2011.

The surge has helped housing to become one of the best-performing asset classes of recent years. It is also changing the way investors consider houses and apartments. More weight is being given to income and less to prospective capital growth.

Peter Chittenden, managing director of residential property at Colliers International, an agency that sells around 4500 new apartments a year, has noted a renewed emphasis among prospective buyers on income.

"Buyers are asking what they can rent the property for, what is the return and what is the yield," he says. "Interest rates are low. Investors are saying, 'If I can get a good yield I can get some equity in my investment'."

Chittenden says the old rule of thumb is returning. If a property rents for $500 a week, it will sell for $500,000. In essence the yield is 5 per cent before costs.

In Maitland, Fletcher, Campbelltown and Rooty Hill of NSW, rents on Silverhall properties have grown strongly and house prices have been increasing, gross yields are now more than 6 per cent. (added by Silverhall)

At the other end of the scale, in the inner south-east of Melbourne, gross yields are less than 4 per cent, which reflects weakening rentals and the tail of the housing boom.

Of course the vast majority of housing investors are still locked into the old paradigm.

On the latest numbers, from the Australian Taxation Office for 2009-10, more than 1.1 million investors have negative-geared properties.

The strong price growth through the 2000s encouraged negative gearing. In 10 years the proportion of negative-geared investors rose from 50 per cent to 66 per cent.

The past year, however, has been hard on highly geared investors. Equity was lost as prices fell. However, this has occurred in areas where prices have fallen, a factor normally associated with a fall in demand or an oversupply.

But one thing has remained constant - the rent has always been in the account. In tight housing markets, even a week without rent is unlikely. As old tenants vacate, new tenants move in.

Silverhall provides experienced guidance and strategies for property investors. Book a free investment consultation online or call 1300 662 143 today!

Parts of the following article came from the Weekend Australian Financial Review. It has been amended by Silverhall for the purpose of this blog post.

The 2012 Home Buyer and Investor Show was held last weekend. The show serves as a great barometer for the property market and the 10,000 plus people walking through doors were reflective of Silverhall’s positive perception of the market.

The weekend Home Buyer & Property Investment Show was a great success. I have found everyone who attends the Show are there for positive reasons. Most want to know how they can improve their current position through residential property investment. The Show provided us the opportunity to showcase the hotspots to invest, the type of property and the numbers – how much positive income each property would generate and our forecast capital growth.

Every year, and we have been presenting for 5 years now, more clients come on board. The presentations by Mike Anderson, on where to find capital growth and positive income was attended by over 500 people with the majority wanting to talk to the team further over the weekend. What piqued clients interest was Silverhall’s exclusive access to NRAS properties in NSW. This is a rare commodity right now.

If you were unable to attend the Show but wanted to be taken through the hotspots research and the numbers please don’t hesitate to call on 1300 662 143 or book a free consultation online

Too often rental properties are seen as a foolproof source of steady income where the investor "can't lose" This is often not true.

Many novice landlords are not aware of the costs incurred throughout the investment and don't take advantage of all the benefits.

Some of the biggest costs for landlords are incurred before finding tenants - in safety items such as smoke alarms and circuit breakers as well as insurance.

Statements of agent fees can often appear complex and confusing. Rental income can quickly evaporate when subject to management fees, letting fees, marketing fees, strata levies and even a fee for the statement itself.

Cameron Anderson of Silverhall says, landlords often make the mistake of choosing the cheapest property manager.

"A good property manager should be making sure you have properly managed tenants, timely inspections and communicate with the landlord at the right times. Good property managers will inform the landlord when a lease is due for renewal to ensure the new lease period reflects the proper market rent. I see too many times property managers not communicating with landlords and accepting less than market rent.”

Management fees vary between states. This is usually a factor of supply and demand of property managers for a particular area.

Landlords need to ensure agents demand punctual rental payments to avoid extra loan interest.

It's also important to recognise the value of further investment in the property, which can attract higher-quality tenants and is often tax deductible. However, be careful not to overcapitalise.

Better tenants mean lower arrears, higher rent and less maintenance costs.

For more information on property investment strategies, check out Silverhall’s range of FREE informative ebooks, or contact us on 1300 662 143. 

For many first-time property investors it can be tempting to go it alone. But whether you’re a property beginner or a seasoned investor, it takes time, knowledge and expertise to build a successful portfolio, particularly if you’re looking to invest in propertiesin fast-paced, complex markets such as Sydney and Brisbane or robust large regional towns including Newcastle and Townsville.

Having the right army of advisors behind you can make or break your success. So before you step out on your own, consider the benefits of property investment guidance.

Strategy

First of all, a property advisor is in your corner. Unlike real estate agents, who represent the seller, your advisor represents your interests. They will build a strategic plan for you based on your short and long-term investment goals, as well as your budget. A good advisor asks you the right questions so they can source a property that meets your objectives.

Options

A common pitfall for investors is approaching the market as a property owner rather than a property investor. Trustworthy investment guidance takes the guesswork out of property hunting. An advisor can draw on extensive industry research to source a selection of properties that you might not have considered, but which have defined reasons for growth.

Industry Knowledge

An experienced advisor will have established partnerships with industry experts in finance, accounting, conveyancing and insurance to help you through the purchasing process.

Long-Term Goals

Even after you make your purchase, the right advisor will help monitor your investment and keep you informed of your investment’s value and opportunities well into the future.

Want to learn more about building a smart investment portfolio? We run informative investment property seminars in Sydney and Brisbane. Find out more online or contact our team of professionals on 1300 662 143