Benefits of Property Investing

When it comes to investment opportunities to secure your financial future, I don’t think anything can compare to investing in property. And with property values doubling every 10-15 years, you can see why I think so!

Aside from the capital gains, there are also plenty of potential tax benefits and I believe it’s important to educate everyone on the benefits of property investment and why it might be the best way to achieve your financial freedom.

Less Volatility

If you’ve paid any attention to property prices over the years, you’ll have noticed they always seem to be on the rise. That’s because they are! Historically property prices have doubled every 10-15 years. Which means a 400k property bought 10-15 years ago could be worth over 800k today!

On the other hand, other investment options like shares and the stock market can rise and fall daily, increasing the volatility and making it harder to be confident and increasing the chances of losing your investment.

Property investment provides a layer of security based on past performance. While there will never be a guarantee (in any investment you do), the previous historical growth over time can provide you with additional confidence that your investment will yield good capital growth.

Less volatility means it can also provide that additional peace of mind that you’ve made a safe investment that will actually make you money in the long run.

Tangible & Simpler to Understand

Another great aspect to property investment is that it’s tangible and simply easier to understand than shares or the stock market. An investment property is something you can see and interact with, and you can get a clear picture of your costs and returns without needing a background in financial planning or accounting.

For many of my clients at No1 Property Guide, simply being able to interact with an investment property puts it ahead of other investment avenues. Knowing you have a material asset you can track creates great peace of mind. It’s also something you can work on yourself if you want to increase the value. And being able to actually work on something and increase the value of your investment yourself adds an extra sense of accomplishment when it’s time to reap the rewards.

Tax Benefits

One of the biggest reasons why I believe investment property is the best way to secure your financial future is the numerous tax benefits that exist for investment properties*. The most well-known benefit is ‘negative gearing’. You’ve probably heard the term before, but it can be a confusing concept for first-time investors.

Essentially, negative gearing is when you claim money you’ve lost in the investment against your tax. This can actually reduce your losses to the point where you break even or even make money and therefore any growth in your property value quickly adds up and creates an even bigger profit quicker.

Along with negative gearing, there are other tax benefits including depreciation on construction within the property or on the property itself, capital gains exemptions for certain properties, claiming interest on your mortgage and even tax exemption on equity loan withdrawals.

Not only do investment properties provide a tangible, less volatile form of investment, they’re also full of additional tax benefits that can make them a clear winner for many investors!

*Always consult your personal financial advisor or tax expert before claiming or making any tax decisions.

Equity

When it comes to property, the word equity is thrown around a lot, and for good reason. Using equity to finance new home loans and buying additional properties is a popular strategy for many investors and is a great reason as to why investing in property is a smart move.

Being able to draw on the equity of your existing property allows you to access additional finance that wouldn’t be possible for many other potential investors. And when combined with the additional tax benefits, and the general high growth and rental return of an investment property, makes property investment an easier starting point for many investors and a relatively safer strategy compared to other investment options.

I have helped many clients access an investment property by utilising their equity and finding the right house and land package in a high-growth area.

How to Begin Investing in Property

Getting started with an investment property is probably easier than you think. There are multiple ways to get into the market and depending on your situation you’ll most likely have one that works best for you.

My no or low deposit home loan system is a great starting point for investors as it doesn’t require a large deposit to get financed.

If you already own a property, or multiple, then utilising equity will probably be the best option for you as it will lower the amount you need to finance upfront and can be paid off using the rental returns from the investment property.

Another option if you’re looking to build towards your retirement is using your Super to invest in property. SMSF property investment uses part of your Super Fund to finance an investment loan. There are additional rules and regulations that come with this, the primary one being that any property bought using SMSF can not be lived in by yourself or a family member/friend until you have reached retirement age.

SMSF property investment is a strategy for retirement wealth, so if you’re looking to utilise investment property to grow your current wealth to access immediately, then something like equity or my no or low deposit home loan system is a better choice.

Whether you’re just getting started or want to increase your existing portfolio, I have systems that are designed to help get your investments underway, build your wealth, and get you started working towards a retirement lifestyle you can enjoy.

Kind Regards,

Darren Walters

Darren Walters is the Founder and Director of No1 Property Guide by Darren Walters, Walters Real Estate, and the Co-Founder and Co-Director of Loantec—Everything Finance. He is passionate about servicing others and believes that every Aussie deserves to be able to buy and own their own home.