The average age of retirement in Australia continues to creep up and now more than ever is an important time to think about your financial stability. The difference between a comfortable retirement and a lasting legacy for your grandchildren can start with a wise investment. Building wealth takes time, patience and some capital. Buying a property with intent of making money from it is a popular choice in Australia for many reasons. As an investment, property is a tangible choice; you can see it, touch it and walk around in the surrounding neighbourhood. Property investment is a long term strategy, check out this handy Home Loan Calculator to get started.
- No experience necessary
A piece of property is tangible. It has history. You can see how it’s made, you can feel it and smell it and touch it. As an investment, the factors for its success are easy to understand. There is no complex jargon to decipher and you don’t need a degree in economics to build wealth with an investment property. Statistics that need to be taken into consideration are easily digested such as location, vacancy rate and average rental price.
- You’re the boss
As a landlord you are the CEO. You chose the investment, you chose the tenants. If you want steady income all year round you can find the perfect tenant and provide stable housing for years. If you invest in a property in the right location you can use it as short term holiday housing of intermittent but larger bursts of income.
If you have taken out a home loan to purchase an investment property, a portion of the money used to by the asset is borrowed. As you pay back the loan you will also be paying extra as interest. This “leveraged” purchase actually starts to act in your favour as the entire asset appreciates in value not just your original deposit. This property appreciation enables you to get more growth long term out of a smaller amount of initial cash.
- Regular income
Unlike many other forms of investment, a rental property can give you real money in your bank account every week. It is wise to put a portion of the money generated aside for maintenance and to cover against vacancy. Many investments will lock up your money and take months to pay off, with a steady income you will have more cash free to reinvest to enjoy.
- Write offs
Unbelievable tax write offs are available to the investment property owner. The write offs are almost crazy, it is no mystery then why investment properties are popular with those who have the means to acquire them. Fees associated with real estate management, travelling to and from the property for inspections and council water rates are amongst the write offs available. Perhaps the biggest draw though, the ability to write off interest paid on your home loan! Do you research and consult your financial advisor and the appropriate government agencies as some terms and conditions do apply.
Creating financial freedom is not just for those with retirement on the horizon. The best time to invest was yesterday but the next best date is today! Purchasing a property as an investment is a sound way of building long term wealth. With the long list of benefits it’s easy to see why a lot of Australians (and investors from overseas) have chosen to purchase a property in Australia. Being a landlord is an attractive prospect for those looking for a regular income with the freedom to live life. Attractive home loan packages are available to assist you in reaching your investment dreams and help you create a wealthy, healthy and happy future.