One of the favourite investments for many since a long period of time is property. It is a way to increase your wealth multiple folds and secure your future for your future generations. But, in case you want to reap positive outcomes you have to struggle a bit and learn about the right way of investing. The effectiveness with which you handle investment properties can give you a lot of benefits which you will learn as you read on.
Unlike other investments such as shares, property is considered to be less volatile which is good factor in an investment. With less volatility come great returns and lesser risks, that makes your investment property much stable. As the rise and fall of properties is a gradual process you will have a little thinking time to respond to the changes.
If you are interested in buying a property as an investment, banks these days offer almost 90% LVR along with mortgage insurance. This way you have secure money for investment properties. In case you own your own home and have the required equity for it, you do not even have to take a loan. You could simply use the equity value and gain finance to buy other properties.
Capital Growth and Taxes
Once you invest in your own property, you could either use it for your own or give it on rent and get a periodical payment from your tenants. This way the value of the property increases with time and you get your investment money back as capital growth.
Also investment properties offer a lot of tax advantages. One way is to buy a property whose cost of investment is more than the actual income you earn. This will create a negative gearing and reduce the taxation value. Another way is to take a loan whose interest is tax deductable and thus you save such expenses. Depreciation on renovated or new property also has tax benefits.
You are buying something you can touch and feel
Investment properties are always better as they have a stable growth over a long period of time. They are fixed assets which do not get depreciated soon and provide a sense of ownership to an individual. Most importantly property can be seen, analysed and then bought. This makes it even better. You may even end up investing in a property that is actually much more worth than other investments on which you have spent money all these years.
Investing on a property can be a hard decision for many. As a large number of features such as property taxes, insurance, interest rate and maintenance have to be looked into in detail, you need to surely make some reasonable calculations and see if the property is really worth the investment. If you feel that all the factors are working in your favour, go for the best investment of your life and be a property owner.