It’s common for many people to assume only rich people buy investment properties. But who is the average investor?
Research conducted by the Housing Industry Association (HIA) in 2015 and recent statistics released by the Australian Taxation Office (ATO) revealed some surprising statistics about investor incomes that might make you rethink your assumptions.
Let’s take a closer look at some more property investment statistics to see just what the average Aussie landlord looks like…
The Australian Taxation Office (ATO) published figures in 2015 showing there were 1.7 million landlords in Australia. That means around 1 in 7 Aussies is a property investor.
You might also be surprised to learn that the majority of Australian property investors fall within the low- to middle-income brackets.
The statistics showed that almost 75% of Australian landlords earn a taxable income of $80,000 or less. They’re not super rich. They’re just average mum and dads, but they have at least one investment property.
Who Is the average investor?
Recent research conducted by property analyst Michael Matusik revealed that more than 80% of property investors purchased residential property in the hope of achieving long-term capital gain.
ATO statistics also show that 63% of landlords are negatively geared. In other words, the costs associated with owning the investment property are higher than the rental income they receive from the tenants.
Even if you take the net rental loss out of a family’s total household income, statistics show that around 33% of people who take advantage of negative gearing have a total income less than $52,000 a year.
It just goes to show that buying an investment property isn’t just reserved for the rich!
How many properties does the average investor have?
In the same way that many people seem to believe that property investment is only for the rich, most people also assume that landlords with more than one property must also be rich.
Let’s take a look at the statistics to see how many properties different landlords own.
The ATO released statistics showing that around 2 million Australians own an investment property. Approximately 10% of those landlords own three or more properties.
It’s believed that the record low interest rates has made it easier for many people to enter the investment property market and focus on building wealth for their future.
It’s also interesting to note that for the first time since records began more first home buyers are also more likely to buy an investment property rather than moving in as an owner occupier.
Statistics released by the ATO also show that younger landlords aged between 18 and 24 own two properties on average.
When you consider the implications of the statistics, it shows that starting early offers property investors more time to build equity and take advantage of capital growth.
Reading through lists of statistics might not seem so exciting at first.
However, when you look at the reality behind those numbers, it’s clear that plenty of average Aussies on average incomes are taking advantage of the benefits associated with owning an investment property.