Why Invest in Property
Investing in property has many benefits when looking to build long term wealth. If you take the time and select your investment properties well, there are a number of advantages including: earning a profit from capital growth in property, additional income through rent or tax benefits including negative gearing. In some cases, you do not need a deposit. If you have sufficient equity in your current home, you can use this as a deposit for your new investment home loan.
Interest rates should stay where they are for a while, or at least until the stock market regains its footing and economic uncertainty lessens. This is a positive for real estate investors, including prospective homebuyers seeking investment opportunities in the most popular neighbourhoods. It makes sense for them to take action when rates are low.
- Unlike Shares and Stocks etc., property is reasonably consistent in its growth and not as susceptible to the large variations and losses seen in stock markets the world over - such as during the GFC.
- It does not require as much as you may think to get into the property market. Lenders have a different set of criteria for lending to property investors, lending up to 100% of the purchase price at times (using equity from another property). Also, the expected rent of the prospective investment property is taken into account in offsetting loan repayments, something not done when purchasing your own home for personal use.
- Security. You are putting money into an asset which can not only generally increase over the long term but can also be insured against many of the risks associated with home ownership and renting it out.
- Additional Income. This comes from rent which can increase over time and be used to build a property portfolio or pay out existing loans.
- Capital Growth. Property goes through cycles which are influenced by many things, such as population growth, infrastructure and current market conditions to name a few. However it is this property cycle which has seen consistent capital growth, doubling the value of a well located property within a 7-10 year period.
Stockdale & Leggo offer our services to help speed up the process by identifying investment properties in areas that are at a point in the property cycle set to increase considerably. Property Investing also allows investors to receive any government incentives available at the time of purchasing and use a multitude of tax benefits associated with property investment.
Once you have bought your property it’s important to understand and be aware of any ongoing costs. As with any property, you will need to pay interest, council rates, land tax, property management & strata fees (if applicable). As a landlord you have other financial responsibilities, like maintenance and repairs and landlords insurance.
Investing in property may be the stepping stone that you could take. Our offer is simple, it is to help you make an informed decision and point you in the right direction on the road to wealth.