Why invest in property?
Property investment has a long history of performance and is generally considered less volatile when compared to other investment options. It is income producing, highly tax effective and accessible by most people. Australians have been comfortable with the bricks and mortar idea of investing for many years.
Security Property
Property investment is widely considered the least volatile of the asset’s classes and has a long-proven history of performance. Financial institutions will typically lend up to 90% of the value of a property. when compared with shares, for example, they typically only lend up to 60%.
Capital Growth
Historically the median house price in Australia has continued to rise in all capital cities. As with all types of investments property goes through cycles, however, it has been proven that property investment as a long term strategy will see increases in value.
Tax Effective
In 1985 the Australian government introduced tax incentives to encourage Australians to invest. These incentives were introduced to encourage and assist people to become self-funded in retirement, relieving the pressure from the provision of the aged pension. Additionally, investing in property can allow negative gearing providing for significant cash and non-cash deductions. Cash deductions are made on the money paid to service the interest on the property loan and any property related expenses such as rates, water and property management fees. Significant deductions can also be claimed without cash outlay in the form of depreciation. these strategies allow investors to significantly reduce their taxable income.
Income Producing
Property produces income through rent and taxation savings. This income can then be redirected towards servicing the investment loan and related expenses. Done correctly, this strategy can allow the investment owner to service the investment with little or no additional out of pocket contributions. In effect the tenant and the Tax department are paying for your investment property while you take advantage of the long term capital growth.
If you’d like to discuss your options with us directly, call (03) 9827 1777 or click “Book a call” and we’ll contact you when it’s convenient for you.
PLEASE NOTE: This should not be considered financial advice and should not substitute advice from an authorised & licensed professional.