Johnson Property Group

Property v shares and cash

Maximum yield with minimum risk: Finding that sweet spot

With interest rates at an historic lows and little to no yield in cash, investors are faced with the dilemma of how to get higher returns without taking on too much risk.

Many perceive the stock market as overinflated, so we are increasingly seeing investors  turning to commercial and residential property.

Before embarking on a new financial journey, make sure you identify investments that fit your individual fiscal goals and your tolerance to risk and time.

The most popular investment trajectory at the moment is understandably those looking at commercial assets yielding upward of 5 per cent, and yields of two per cent and above for residential assets. Be aware though that while the yield is higher, commercial assets can have added risk.

With wide exposure to both commercial and residential property sectors, JPG spends a good deal of time identifying assets that increase returns and grow portfolios.

There’s no room for shortcuts if you decide to go down this path. We always advise clients to do their homework to ensure they know exactly how the investment will work, how it will generate a return and what the capital gain will be.

Other considerations for investors considering a real estate immersion include the duration of the investment, or how long it should be held before it’s sold or reaping dividends.

What are ALL the risks involved? Are there tax implications for such an investment? Are there legal or spousal considerations? How will the investment contribute to broader investments or a diversified portfolio? What are the fees involved? If a lender is involved, can you adequately service the loan?

The aim of a property investor should always be to secure both growth and positive returns. One without the other isn’t sustainable.

My own experience has been to find that sweet spot where you can achieve both. 

An experienced agent can help kickstart a diversified portfolio in residential then, then add commercial assets over time. I’ve found this maximises yield and keeps risks to a minimum