Are you ready to invest in real estate? If so, the question of whether to invest in short term or long term investment opportunities will arise. Which is the best fit for your portfolio or investment strategy?
Money often needs to be stored for relatively short periods of time. There are many reasons: preparing for an emergency, anticipating an upcoming expenditure, or waiting for other investment opportunities that may arise.
As a general rule, the short-term investments are those that put preserving capital ahead of growing it.
Short-term investments, also known as temporary investments, are investments made with the expectation of a limited timeline, generally a period less than three years.
Examples of short term investments are stocks and bonds, while long term investments generally include pension funds and superannuation.
With short term investments, there is a higher chance of making money and losing money in a shorter timeframe, and with long-term investments, your money is tied up for a longer period but the chances of making more money, may increase.
Consider investing in a few different types of short-term investments in your overall portfolio, to meet your various financial goals.
・Certificates of Deposit
・Treasury Inflation-Protected Securities
・Series I Savings Bonds
・Short-Term Bond Funds
・Individual Short-Term Bonds
・Brokerage Money Market Mutual Funds
・Real Estate Crowdfunding and Crowdinvesting
In the Australian real estate crowdsourced market, APRA states that the total addressable Real Estate Market in Australia is $312 billion. The real estate crowdfunding industry could boost the volume of deals to phenomenal levels in 2025 as investors seek to tap high yield investments and developers turn to the crowd for capital alternatives.
A short-term real estate investment strategy is great for properties in areas with stable or projected increases in value.
Also, if you can devote substantial amounts of time to the real estate's development, and if you can afford to pay considerable capital gains at tax time, then short-term real estate investing might be for you.
The information in this article is general in nature. Any advice it contains is general advice only and has been prepared without taking into account the objectives, financial situation or needs of any particular person.
The article content is not intended to be a substitute for professional advice and readers are urged to seek their own appropriate advice before making decisions.
Any reference to a particular investment is not a recommendation to buy, sell or hold the investment.