1. Grow your wealth
Residential property in Australia has consistently returned in excess of eight per cent capital growth per annum over the last 50 years. Regardless if you invest in one property or create a property investment portfolio, with the right strategy and advice, property investment can help you to achieve financial freedom.
2. Get into the property market
This especially applies to younger people and those that have never purchased property before, regardless of age. It is common to hear the younger generation say they will never be able to save a deposit or afford to buy their first home. However investing in property can achieve just that. A current trend taking place around Australia is for friends or siblings to pool funds to buy an investment property, which over time will deliver financial growth and equity and in turn can be used to purchase further property.
3. You have control
Because you control where you buy, how you buy and when you sell, property investment provides many options in terms of growing the value of your investment and the income generated from it.
4. Someone else pays your loan
When you purchase property for investment purposes the primary goal is to have tenants live in it. Tenants pay rent which is used to pay down your investment loan while the value of your asset increases.
5. Low risk investment option
Australia’s property market is relatively predictable and with the right advice and strategy your investment can be relied upon to increase in value. It should be noted that even if the market experiences a major downturn, you are not at risk of losing on the property until you actually sell it. With the right investment strategy from the outset, your property should be able to maintain a healthy cash flow during a market price drop and be sustainable until the market rights itself.
6. Property investment is simple to understand
Unlike the share market, investing in property is a straightforward process. You identify what your investment goals are, determine how much you can borrow and then engage an expert to find the right property in the right place at the right price. Admittedly it is a little more involved than that but not much more – key is surrounding yourself with a team of experts that will guide you through the process.
7. You don’t have to be rich to start investing
Approximately one in three landlords in Australia have a household income under $100,00. This shows that you don’t have to be rich to start investing in property.
This level of income can go a long way outside major cities when you consider studios or one-bedroom apartments.
8. High level tax deductions
Opportunity exists to claim various tax deductible expenses through an investment property. An accountant can show you how to legally cut your tax expenses by potentially thousands of dollars.
9. Flexible investment option
Regardless of age, lifestyle or financial goals, there is a property investment strategy to meet your needs:
- Add value
Purchase a run down or potential knockdown property with potential for renovation, sub-divide or develop. - Positive cash flow
Choose a property that delivers a passive income. - Long-term capital growth
Buy in the right area with correct housing supply / demand ratios.
10. Lenders’ love property
Home loans are a major part of a bank’s business model and are more likely to lend for residential property than other types of investment options.