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Why Invest In Property
 

Property is a comfortable investment for many Australians - around 70 per cent entered the market with the purchase of their own home. So it’s not surprising that when deciding to make a further investment, Australians choose to buy residential property to rent out.

It’s often a good decision, but there are many alternative ways to invest in property such as Listed Property Trusts, Property Syndicates and of course other asset classes in the share market.

Many Australians choose to invest in property because of its proven ability to provide steady returns and capital growth. Further advantages include ongoing income through property rental, and potential taxation benefits. Importantly, an investment property should be viewed just like any other investment with it’s own risks and benefits.

We’ve all heard the expression “ as safe as houses “. Does this really apply to property investment?

What are the Risks and Benefits of Real Estate Investment?

The Benefits
Property investment is popular for several reasons:

• it is a fairly secure, long-term investment;
• it provides a solid visible asset;
• it can 'pay itself off' when the rent covers the loan repayments - but be warned, this is not always the case;
• there can be tax benefits through negative gearing.

The Risks
Like every investment, property also entails expenses and risk. It is important to be aware:

• there are substantial purchase costs, including legal costs, stamp duty, property inspection fees, loan establishment fees ;
• you should also consider the holding costs involved, including maintenance, rates, body corporate fees, and insurance;
• the rental return may not meet expectations;
• the value of the property may not grow as quickly as expected;
  if you ever need fast access to the money invested in the property, it may take time to sell it;
• you might earn a higher return if your money was invested elsewhere.
  So take your time to weigh up your options and be clear about your investment time frame. Property is generally viewed as a long-term investment.

 

 

 

 

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