Over the last few decades, many new investment assets and strategies have become available. However many investors continue to turn to buy property.
There are many reasons why investors remain committed to buying property. Here we discuss the main ones:
Income
Successful investors seek to earn income as part of their investment strategy. Shares earn income through dividends paid generally every 6-12 months, term deposit pay interest at the end of their term. Property earns income through rent. The real benefit of property investment is the fact rent is charged weekly and paid monthly.
Having a regular income provides great returns regardless if the asset deist increase in value.
The rental income can also increase each year or when you see fit. Having control over the income return makes investors turn to buy property.
Tangible
Many investment assets can be intangible. This has become particularly more common in recent years with the introduction of bitcoin and other forms of securities traded over the share market.
However investors turn to buy property on the basis the asset is tangible. Having the ability to drive past your asset at anytime increases an investor’s peace of mind.
Having building insurance to protect it from fire, theft and damage is also ideal and recommended.
Leverage
No other investment can access borrowed funds to fast track a purchase like property.
Investors turn to buy property as they can access money from banks and financiers to buy.
Borrowing to invest can be a great way to accelerate your investment portfolio or net wealth, but it’s important to note it adds more risk. It can magnify your gains and losses but you are also committed to service the loan repayments regardless of the investment property’s performance or your circumstances.
Many successful investors establish financial plans to take advantage of the available leverage. If used correctly this can be a very rewarding opportunity.
Tax benefits
Not all investments offer tax benefits when making money. Property investment can offer some excellent tax incentives. Items such as property maintenance, interest loan payments and tax depreciation are among the most influential contributors why investors turn to buy property.
Tax depreciation can be a tax deductible expense that can last up to 30-40 years. Obtaining a tax depreciation schedule is the most effective way to take advantage of it. It’s very enticing to investors at tax depreciation is actually a non-cash expense. To learn more, please read our market insight on tax depreciation.
Capital growth
Investors prime objective when commencing an investment strategy is to generate capital growth. Investors turn to property as past history has shown us that property prices have doubled and quadrupled over the long term.
You can’t make an investment decision based on past performance but it certainly encourages investors to buy property.
In summary
If you want to consider buying an investment property, please don’t hesitate to contact us. We specialise in sourcing brand new and off the plan property for buyers.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
October 2020
