Property Investment

Benefits of Property Investment

Property has proved a relatively secure investment over the past quarter decade in Australia, with returns above 8 per cent in some metropolitan markets. In general, property is considered a fairly low-risk investment, and can be less volatile than shares (although, this is not always the case). Some of the advantages of investing in property include:

  • Tax benefits – a number of deductions can be claimed on your tax return, such as interest paid on the loan, repairs and maintenance, rates and taxes, insurance, agent's fees, travel to and from the property to facilitate repairs, and buildings depreciation.
     
  • Negative gearing – tax deductions can also be claimed as a result of negative gearing where the costs of keeping the investment property exceed the income gained from it.
     
  • Long-term investment – many people like the idea of an investment that can fund them in their retirement. Rental housing is one sector that rarely decreases in price, making it a good potential option for long-term investments .
     
  • Positive Asset base – there are many benefits from having an investment property when deciding to take out another loan or invest in something else. Showing your potential lender that you have the ability to maintain a loan without defaulting will be highly regarded. The property can also be useful as security when taking out another home, car or  personal loan.
Property Investment
  • Safety aspect – low-risk investments are always popular with untrained "mum and dad" investors. Property fits this criteria  with returns in some country areas reaching 10% per year. Housing in metropolitan areas is constantly in demand with the high purchase price being offset by substantial rental income and a yearly return of between 4% and 8%.
     
  • High leverage possibilities – investment properties can be purchased at 80% LVR (loan to valuation ratio), or up to 90% LVR with  mortgage insurance. The LVR is calculated by taking the amount of the loan and dividing it by the value of the property, as determined by the lender. This high leverage capacity results in a higher return for the investor at a lower risk due to having less personal finances ties up in the property (80% of the purchase price was provided by the mortgagee).

By choosing a property intelligently, investors can make this form of investment work for them.

Do you know that by seeking proper advice from the start will enable you to maximise the benefits you receive from your investment property?

I have met people who have wanted to  purchase an investment property, however, have not realised that by not having a S.M.A.R.T (specific, measurable, achievable, results oriented, time framed) plan could possibly end up missing most of the benefits they are entitled to.

The benefits are financial in the long, medium and short term.

These range from:

  • Long term –  capital growth
  • Medium term - increased  rental income due to inflation and the increase in market rent
  • Short to medium terms –  tax variation, tax minimisation,  negative gearing and  depreciation
Financial Advice

To maximise the benefits from your investment property ideally you should seek the proper advice from qualified experts in their respective fields like Accountants, Financiers and Quantity Surveyors.

Your Benefits will be:

  • Tax minimisation
  • Long term capital growth of the investment
  • Tax Variations - this helps with your cash flow
  • Full rents paid to your nominated bank account (this helps your cash flow)
  • Negative gearing (helps legally reduce the tax you pay)

We have relationships with people who can help advise you with these matters.

Kindly contact us for more details 

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