10 Reasons to Buy an Investment Property
If you’ve got some spare capital and you’re wondering where to invest it, here are ten reasons why you should invest in property.
- It’s Easier than Stocks & Shares
Do you know what Averaging Down means or what the Bull Market is? How about Beta or Day Trading? Mastering the stock market isn’t just about knowing which shares go up and down, and it takes a lot of time to trawl through company reports and check the financial press.
Yes, investing in property does take time when you’re looking for properties and sorting the finance, but for many it is a lot easier to understand and you can physically see your investment.
- It’s a Stable Investment
The property market generally is relatively stable compared to paper assets such as stocks and shares. A massive rout, dip in consumer confidence or even another country’s economic climate can seriously affect share-markets.
- You Are in Control
Yes, there are outside factors like economic climate which may affect your property value, but once you’ve got it, you are in control of the asset you own. Compare this to stocks and shares where you’re reliant on a good CEO and Board to run the company well.
- Tax Breaks
Negative gearing, depreciation in the property’s fixtures and fittings, renovations are just some of the tax breaks you can get from property. Talk to your accountant and you’ll be surprised at what you can claim back.
- Inheritance
If you’re thinking long term – property is a good investment to pass on to your kids. While you can still pass on shares to your kids, not many companies stay in the top ASX 200 for 30 years.
- You Don’t Need to Sell it When the Price Goes Up
With many other investments, generally when the price goes up, investors sell. With property when the price goes up your asset is worth more, so your lender may increase your loan so you can release some capital – but you still own your property.
- It’s Flexible
You may not immediately realise it, but property investment is flexible and can help you meet different financial goals. You can use it for long-term capital growth, immediate positive cash flow or even add value to your asset.
- Something for Every Budget
Whether you’ve got half a million or just a few thousand dollars, the chances are there is a property for most budgets.
- Easier to Manage if Things Go Wrong
If your property value falls, so long as you keep up the repayments you won’t be asked for more money – unlike some other investments such as shareholdings which can ask for more money if things start to go wrong.
- You Don’t Have to do the Dirty Work
Some people don’t like the idea of property hunting, but there are people who will do this for you. Furthermore, once you’ve got the property, get a good property manager and you can sit back and let them do the hard work of managing tenants and sorting maintenance. Yes, you will have to pay for it, but don’t forget, this can be used as a tax benefit.
