Six Reasons to Invest in Property

Property investment is renowned as a safe and lucrative way to invest and make a profit. While the share market is prone to highs and lows and other forms of investment can carry a high level of risk, property is chosen by many astute investors who desire long term gains from their funds.

#1:  A secure investment…

Of course real estate values do rise and fall, but trends generally show that most property prices steadily grow. Consequently, residential property offers one of the most secure investment possibilities.

The security of investment property is reflected by banks who will (for some people) loan a substantial amount of the value of a property because they know that in the long term, property values do not fall.

#2:  An increasing income…

Many people choose an investment property to rent out. Income received from an investment property facilitates leverage that assists you to pay the interest on your mortgage and time has shown that the rental income received from property investment has been greater than the rate of inflation.

With such incredible demand for rental properties in so many cities and other parts of Australia, there are many opportunities for landlords to enjoy a healthy income from their residential investment properties. As an investor, choosing a property that is in a sought after location and with features that are desired by tenants will help to ensure that your investment property is always tenanted.

#3:  Capital growth…

In Australia’s capital cities, quality residential property has a very good record of consistently high capital growth. Properties in Australia’s capital cities have significantly increased in value over the last twenty five years and this trend seems set to continue.

Property investment offers capital growth in a way that bank deposits and fixed interest banking products simply cannot. However, investors in property should also note that property is a long term investment and therefore is not an ideal investment option for those looking to make money in the short term.

#4:  Almost certain profitability…

Real estate is often thought of as a ‘forgiving’ type of investment. This means that even if you purchased a terrible property at a very expensive time, it would still be likely to increase in value over time. If property investors are prepared to hold on to their property for a number of years, their property will almost certainly increase in value.

The almost certain profitability of property investment is what attracts so many people, including very successful property moguls, entrepreneurs and wealthy people generally, to this investment type.

#5:  You have control…

Property investment affords you complete control over what happens with your property. You make all the decisions and can control the returns of your property.

This means that if you want to raise the rent, you can upgrade the property. Similarly, if you want to increase the total worth of your property, you can renovate and/or make other improvements.

#6:  Tax benefits…

Property investors are able to take advantage of a number of tax benefits by virtue of owning an investment property. For example, property investors are able to claim a greater tax deduction on the interest charged on the loan and can have legitimate expenses in relation to running the investment property made tax deductible. Such expenses may include: the fees paid to a property manager who manages the property for you or travelling to the property for an inspection,to carry out repairs or to collect rent.

As a tax deduction, it is also possible to claim for depreciation of the building and this can often represent a good way to increase cash flow.

Property investment is a perennially popular way to invest as it offers safety, security and good opportunities for profit to be made in the long term.

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