2020 was a year like no other in Australia and, thanks to COVID-19, Australia saw its first recession in over thirty years. But now that real estate markets have well and truly bounced back in almost every major Australian city, many of us are looking towards property predictions and asking ourselves; “what’s next”? So, is now a good time to invest in property in Australia? Keep reading to find out!
11 reasons why you should invest in Property?
1. More millionaires have been created through property than any other form of investment.
Remember, there’s nothing wrong with seeing what successful people do and applying those principles to your own life. If the majority of extraordinarily wealthy people have probably used real estate, there is no reason why you shouldn’t also.
2. Anyone can do it
Property investment is not just for the wealthy. It doesn’t really take large sums of money to get involved in real estate. This is because banks will lend you up to 80% against the security of residential property, which means that most Australians with a steady job and a little capital behind them can afford to buy investment properties.
3. Security
It’s often said that residential real estate offers the security of ‘bricks and mortar’, but let’s take a closer look at why I believe it’s one of the safest and potentially most profitable investment markets in Australia.
4. Income that grows
The rental income you receive from your investment property allows you to borrow and gain the bene!t of leverage by helping you pay the interest on your mortgage. Over the years the rental income received from property investments has increased at a rate that has outpaced inflation.
5. Consistent capital growth
Good capital city residential property has an unequaled track record of producing high and consistent capital growth. Over the past 25 years, the value of the average property in all capital cities has doubled in value every eight to 10 years. However, in the short-term, the picture is much more uncertain and confused, and at times capital growth stops and even reverses, as we saw in the early 80s, the early 90s, and in some areas in the most recent slump we experienced in 2008.
6. You can buy it with someone else’s money
Sure you need some of your own money – I don’t believe in nothing-down deals, but the ability to use leverage with real estate significantly increases the return on your investment capital and, importantly, it allows you to purchase a substantially larger investment than you would normally be able to.
7. You are in control
Property is a great investment because you make all the decisions and have direct control over the returns from your property.
8. Tax benefits
Property investors are able to take advantage of a range of tax benefits including tax deductions and depreciation allowances.
9. You can add value
There are hundreds of ways you can add value to your property, which will increase your income and your property’s worth.
10. You don’t need to sell it
Unlike most other investments, when real estate goes up in value you don’t need to sell in order to capitalise on that increased value. You simply go back to your bank or mortgage broker and get your lender to increase your loan.
11. Most forgiving
Even if you bought the worst house at the worst possible time, chances are that it would still go up in value over the next few years. History has proven that real estate is possibly the most forgiving investment asset over time. If you are prepared to hold property over a number of years, it’s bound to rise in value.
If you’re looking for a new kind of opportunity beyond shares, fixed income, and traditional property investments, Simply Wealth could help you diversify your portfolio and meet more of your goals by investing in the growing opportunities of real estate.
Please contact us for clarification, or further advice, regarding any of the topics covered in this knowledge centre.
