Birds eye view of suburban residential homes

Benefits of investing in residential property

You’ve been working hard, consistently saving, and now it’s time to invest your money.

Your investment options are endless, ranging from shares and index funds to term deposits, cryptocurrencies, and property investments, however, which option will provide a good return on your investment, without putting your hard-earned dollars at too much risk?

Find out the five potential benefits of investing in residential property.

 

1. Ability to borrow money

One of the advantages of property investment is that banks are more likely to approve a loan for property investment, than one for cryptocurrencies or shares.

 

2. Investment stability

The property market often fluctuates at a much slower rate than the stock market. 

The volatility of shares means there is potential for your entire portfolio to be wiped out in a matter of days. 

For example, just this year the stock market plunged to 1/3 of its value during the peak of the COVID-19 crisis.

 

3. Tax benefits of buying an investment property

Council rates, maintenance and management fees can be used as tax write-offs.

 You can also claim the depreciation of your investment property against your taxable income.

 

4. Capital gains 

The ‘buy and hold’ strategy (whereby an investor buys and holds onto a property for a long period of time, regardless of market fluctuations), typically provides buyers with a good return on investment. 

This is especially true in high growth areas close to CBDs, transport, beaches, and schools.

 

5. Greater control over your investment

Physically owning a property gives the owner control over tenants and property managers. 

Ownership also provides the owner with the option to make improvements to the property, in order to further increase its value. 

In contrast, a shareholder normally has little to no control over the decisions made by the companies in their investment portfolio. 

 

Invest in your first residential property 

There are many benefits of owning an investment property, but whether it is the right move for you depends on your current financial situation and future goals. 

Will your credit history affect your ability to get a loan? How long will you need to hold onto your property before selling? Is now a good time for you to invest in the property market? An experienced consultant at Simmons Livingstone & Associates can answer these questions, helping you to make the most informed investment choices.  

Get in touch and start your investment journey today. 

 

If you liked this article, you might also like Is now a good time to invest in shares?



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