Have you ever fantasized about how fabulous it would be to invest in property, only to suddenly snap out of it with the same old stories?
‘It’s too risky,’ you remind yourself.
‘Property investment is only for the rich…’
As property tax specialists, we’re here to let you know that this simply isn’t so. In fact, with the right investment property advice, almost anyone can safely and successfully enter the property market – and now is a great time to consider doing just that.
Here are our 6 reasons property investment is for you!
1. Negative Gearing
When it comes to your investment property, the tax benefits are seemingly endless! Australian tax laws reward people who invest in real estate, which means property investment is more economically feasible for Australians of all financial backgrounds.
Through negative gearing, the ATO allows property investors to write off their property investment expenses against tax, which lowers their taxable income. This will either entirely or partially offset any shortfall between rental income and holding costs, making property investment more affordable, with greater potential for long-term growth. There are tax deductions for your mortgage interest, operating expenses, insurance, depreciation, and so much more – so negative gearing is one of the most important benefits for investors. A good property tax specialist will help you decide whether negative gearing is the right option for you.
2. Capital appreciation is a retirement plan
When a property is purchased at a fixed price, the value of the property is likely to rise over time as a result of supply and demand. When the current market value of your investment property goes above the amount you originally invested, you’re enjoying capital appreciation. This is one of the main sources of investment returns, and although it can be difficult to predict long-term rises, real estate assets will almost always grow in value (especially in emerging housing markets.) As long-term growth is so likely in property, investors are able to use their current assets as leverage in acquiring subsequent properties and other investments in the future.
3. Diversify and protect your portfolio
All serious investors will understand the importance of diversification, as it lowers the overall investment risk. Stocks, shares and other investments will always rise and fall, but history shows that real estate will always be the most high yielding, tangible and safe asset for boosting and protecting your portfolio. Despite short-term fluctuations, real estate values will always increase over time. This provides better returns than the stock market, without as much volatility and stress.
4. The Government will always have your back
On a global scale, governments are under pressure to protect those with property. This is due to the simple fact that property is one of the largest assets of any country, and a government that doesn’t protect its property markets will quickly be voted out. In addition to generous laws around investment property tax, The Australian Government rewards real estate investors by providing grants, such as the First Home Owners Grant.
5. The population is growing
Population growth is both the simplest reason, and the most powerful reason as to why the global real estate market will continue to grow. The demand for housing is always on the rise, and property in growing cities and towns will become more sought after in the future. With the growing population and the rise in employment, real estate experts are expecting to see continued long-term growth in the Gold Coast property market. Leading demographer, Bernard Salt has stated that the Gold Coast needs to prepare for a population of 1.2 million people by the year 2050. This will result in an ever higher demand for property in the years to come. The key is to get in now while it’s still affordable, so talk to your tax specialist in Southport today!
6. Property is the most popular personal asset for a reason
Whether for investment purposes or just for somewhere to live, many people strive to own their own property. As a stable and secure investment, owning property can offer support in times of financial trouble, and it’s something real and tangible you can leave to your children. Despite the ups and downs in the property market, our growing population will always need homes. This means there will always be value in land and housing – which is simply not the case for other investments.
As with any investment, seeking professional advice is essential to ensure you’re taking the best possible action for you. Although there are many great reasons to invest in property, there are also many factors to consider – from deciding on a location and learning how to manage your assets, to developing a strategy to close the gap between your current financial position and your long-term financial goals.
ABA are hands-on property investors with over 20 years experience in the real estate industry. We provide our clients with safe systems, success strategies, and expert investment property advice, as well as the preparation of investment property tax returns and other taxation and accounting services. Get in touch today for a chat about turning your property investment dreams into a reality!