New breed of ‘accidental’ investors tipped to rise in 2019

This 23 per cent is also predicted to rise with the current state of Sydney and Melbourne’s property markets, Mr Mortlock said.

“Around 60 per cent of all property transactions in Australia occur in Sydney and Melbourne – two markets where price softening is now firmly entrenched,” he said.

“As such, one of the reasons a homeowner in these southern capitals might choose to retain their old residence as an investment is because their hoped-for sale price is now less achievable."

The predicted rise is also likely to have political ramifications, he added.

“Most of these landlords own just one property and are mum-and-dad style investors looking to get a financial step up before retirement,” Mr Mortlock said.

“It’s this group who will be most impacted by any future changes to negative gearing and capital gains tax, or upward movements in interest rates.

“In our experience, those with the largest property portfolios are the least likely to care about negative gearing or tax changes because they tend to be positively geared.”

The data was found through MCG Surveyors preparing tax depreciation schedules for their clients, asking them if they had previously occupied the property. Of their clients, 23 per cent said they had lived in their investment property as their principal place of residence for an average of four years and 11 months.

Mr Mortlock said that this lengthy time frame revealed only a small amount of property investors were taking advantage of stamp duty concessions and grants, living in property for the minimum required period before moving out.

“Such a group always planned on being investors, but they would be a very small percentage of those in our research, otherwise the average resided-in period would much be lower than five years,” he said.

If an unexpected property investor finds themselves with a property they want to hold onto, Mr Mortlock's first suggestion was to become educated.

“There’s a wealth of resources available about property investment – and much of it is online and free," Mr Mortlock said to Smart Property Investment.

“Study the forums and postings. Subscribe to newsletters. Seek out literature and read, read, read! A broad education on how to effectively invest in property helps define how to best utilise your ‘accidental’ investment.

“Also, if opportunity presents, talk to other investors about how they’re building their portfolios and what they hope to achieve. Draw on the experience around you and learn from other's successes and mistakes.”

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