Buying an investment property has been a successful wealth creation strategy for many Australians.
Super won’t be enough? Why property investing is the key
Buying an investment property should be considered, along with your superannuation and other investments as part of your overall wealth creations to fund your future retirement.
The first exposure to property in most cases will be the purchase of your first home. We have all witnessed over time the capital growth in our homes due to economic factors such as increasing home buyer demand, lower interest rates and increased foreign investment.
In most cases your superannuation will not be enough to fund your retirement, so buying an investment property should be considered as part of your wealth creation strategy. This is where we advise clients on how they can access equity in their home along with a cash flow analysis so they can buy an investment property.
Benefits of Property Investment
Buying an investment property provides many benefits as part of your wealth creation strategy. This is explained below;
- Most investors feel comfortable with buying an investment property versus shares as it is a tangible asset, an asset they can see.
- Historic growth in residential property over the decades has assisted many clients to build wealth through property investing (including their home).
- With the increase in capital growth on residential properties, this is also reflected in increasing rental yields so properties over time can move from a negatively geared investment, to neutrally geared and long-term to a positively cash flow investment.
- Buying an investment property is traditionally great for tax planning but the structure and asset ownership is integral to capture these tax benefits.
- Buying new properties over established properties also provides greater tax advantages due to the depreciation that you are allowed to claim on the ‘building price’ each year.
- Buying your first investment property today is much more achievable due to the current low interest rates on investment loans.
- Tax variation forms also assist with the ongoing cash flow management of owning an investment property.
Building Wealth & Saving Tax
- Buying an Investment Property is a great way to build long term wealth.
- A $450,000 Investment Property in 10 years time could potentially be worth $700,000 – $900,000 based on historic calculations.
- The interest you pay on the investment loans are ‘tax deductible’ which means you will receive a greater tax refund every year.
- Property Investing should be considered as part of your overall future retirement plans.
How we can HELP you
We can assist you with the following:
- Advice on your current Equity Position.
- Eligibility requirements for an Investment Loan.
- Cash Flow and Tax Considerations on a potential Investment Property purchase.
- Advice on the correct loan structures for your Investment Property.
- Get you in financial position so you are ready to buy.
If you would like to find out how you can buy an investment property, please complete our online enquiry form below or simply contact our office to book an appointment.