Author: Mark Watson

Why Buy New Property

Low Investment

Purchasing a new investment property requires relatively low savings or personal equity.   In most cases you can use the banks money to purchase up to 90% of the purchase price. (In some rare cases you can even borrow the full amount from the bank to purchase a property.)

Demand

Tenants prefer to live in newer properties. The benefit here is you will have more tenants wanting to live in your investment. Means you will have a greater amount of tenants to choose from (so you don’t have to lease the property to anyone who doesn’t tick all your criteria on their application) and your property won’t be left vacant. (As someone will be willing and waiting to move in as soon as the previous tenant moves out). Meaning less money you are out of pocket!

Low Maintenance

New properties require much less maintenance than some older properties. Should mean much less time and money put into maintaining the property for the tenant – which means more time and money for you!

Consistent Growth

Property values have consistently proven growth time and time again over the long term. You benefit from 100% of the increased value in the property even though you may have used the banks money for up to 90% of the purchase price.

Tax Incentives

Property expenses and ATO (Australian Tax Office) depreciation of assets can work to reduce the tax you pay each year. In some cases you may be approved to have tax rebates paid as part of your weekly or monthly wages instead of an annual return from the ATO. Hire a good tax accountant to maximise your taxable deductions.

Leverage

As property values increase, you can use the equity built up to invest in more properties and continue to duplicate your wealth. Leveraging is a great way to build your property portfolio.

Speak to us today about how we can help you find a new residential property that meets your investment needs.

There are numerous reasons why you should invest money into property but the fact that residential property continues to increase in value is probably the reason that is the most appealing to investors. (The percentage to how much it’s value increases or has increased largely depends on its location and therefore it’s extremely important to do your due diligence to choose the correct location when first purchasing the property – click here)

As Safe As Houses

Bricks and mortar have always been a popular way to invest. The saying ‘as safe as houses’ has always meant something is an extremely safe option with no risk involved and this saying has always been associated with buying property.   As opposed to investing in shares, when investing in property you can actually see and touch your investment which may mean to you that you feel you have more control over your investment. Also your investment can be insured – so that if it was to burn down in a fire it can be replaced thru insurance.

Purchasing a Property isn’t Difficult

Investing in property is a relatively easy process once you have your funds/finances in place. Yes saving the dreaded deposit isn’t easy but once you’ve got that it can be all systems go. Whilst there is a fair bit of paperwork to do this can and should be arranged by your Solicitor. Therefore investing in property is something everyone can achieve if they have the funds to do so. Unlike shares where you have to navigate the stock exchange or pay someone you trust to do so on your behalf.

You Have Control

Investing your money into property can be a secure investment as you have full control over the investment. You can choose what direction to take the investment. I.e. you can renovate to increase its value or sell whenever you wish.

Increase Your Tax Deductions

Investing your money into property can help put money into your pocket at tax time. Many costs associated with the purchase of investment properties and holding it can be tax deductable. This can increase your cash flow by reducing the total tax you pay her year. (Finding a good, knowledgeable Accountant is a must to legally cut your tax payable with tax deductions associated with investment properties.)

Positive Rental Yield = Someone Else Pays Your Mortgage!

Invest your money into an investment property and have someone else pay the mortgage. Again, by buying the correct property in the right location the tenant’s rent can cover the cost of your mortgage. Essentially costing you nothing if the yield is high enough especially with interest rates at an all-time low.

The beauty of property as it rises in value is you can then use the equity in that property to leverage acquiring another property. Meaning, if you have enough equity in the first property you won’t need to save the deposit for the 2^nd property. Do this a few times and your property portfolio increases.

There are many reasons why investing money into property is the best decision for your investment portfolio. Generally investing in property isn’t a get rich quick investment. But overtime it can really pay off and set you up for your future.

If you have any questions or comments on why invest money into property please comment below. I’d also like to hear the main reasons others choose property to help feather their nest egg.