Australians invest more in real estate compared to other investment class. In fact, more than two million Australians own at least one investment property.
An investment property is an asset that generates income, it appreciates, and it brings tax advantages that can be used to have more wealth. If you’re considering buying an investment property, here are some reasons it’s a good idea.
1) It’s a good investment
While a property is one of the most expensive things you can purchase, if you think about it, it’s cheap compared to other investments. Compared to a car, a property doesn’t depreciate, it doesn’t require costly maintenance, and everything you do for your property will be worth it. You can sell it and make more money from it.
2) It will enhance your income
If you can gain more, why not, right? Buying an investment property will let you make more money through rental income. Rent prices are growing compared to selling homes.
3) You’ll be in full control
When you purchase an investment property, you’ll have full control over it. You’re free to decide which financing method to use, which property to buy, etc. You’ll also be the one to set the amount of rent, whom to rent the investment property out to, and to sell the property.
4) It has fewer risks
Compared to other investments, property investment has fewer risks, especially when you’re doing it for the long term. The longer you invest in properties, the fewer chances of loss you’ll face. This is because home prices and equity grow with time. Also, property will always have value because it’s a physical asset.
5) You’ll have tax benefits and deductions
Cash flow from property investments is tax-free and investors can deduct almost all the expenses that they spend on the property, such as mortgage interests, property taxes, and insurance. Be sure you cover all your legal tax obligations however, so you don’t find yourself in trouble with the tax office.
6) You’ll have greater asset stability
Real estate properties have become a more preferred method of investment by individual investors compared to bonds and stocks. This is because real estate has more stable returns, which can easily be generated from monthly rental income. House rents also rise over time especially if the property is in demand.
7) It protects you from inflation
Investment properties can drive a wedge between you and inflation. This is because your mortgage payments will not increase with inflation, hence, you will benefit from this over time. Also, most of your costs are fixed. And even if insurance and property tax increase with your inflation, so does the rent that you charge.
Investing in a property will provide significant benefits. So, if you have the funds and you’re looking to invest your money, you can’t go wrong with a property. With all these reasons, you can look forward to a more secure financial future for you and your family.
With a property investment, you gain more strategic value to your portfolio as well.