You don’t have to be wealthy to invest in real estate and you don’t even need a huge deposit, most of my clients use their current assets to get their first investment property, then use that to snowball onto a second. What you do need is a proven strategy and the motivation to hold the property for the medium to long-term.
Remember, its always a good time to buy real estate, you just need to know where to target!
Here’s my Top 3 reasons why you should invest in real estate NOW!
1. Property Can Make You Rich
Property investing has proven to be one of the most trusted and safest ways to create wealth. It’s a powerful wealth building tool that has made millions of individuals millionaires.
In fact, it explains why real estate magnates and developers dominate the BRW Rich List. In 2016, 54 out of the top 200 made most of their money in the property sector.
Generally speaking property in Australia tends to double in value every 7–12 years, if you invest wisely and purchase at the right point in the property cycle.
Your goal should be to hold onto your investment property through at least one full property cycle, if not longer. As a general rule of thumb, the longer you hold an investment property, the more likely you are to make a great profit.
2. Potential Appreciation of a Leveraged Property
Leverage, in layman’s terms, means you invest a relatively small amount of your own money, and borrow the rest. Property offers this financial leverage, and the more leverage you have, the more quickly you can build wealth, it’s simple math. Make money by using other people’s money!
If you had $100k in a term deposit account and the bank paid 5% PA (more like 2.5%), the return will be $5k. Now, if you used the strategy of leverage and purchased a property for $400k, using the same return of 5% (capital growth), you will make $20k on your investment of $100k. I know what return I’d choose every day of the week!
3. Legally Minimise What Goes to The Tax Man
Property investing is an effective and legal way to minimise the income tax you pay in Australia. As a rental property owner, you are entitled to significant tax deductions.
You can claim a deduction for your related expenses for the period your property is rented or is available for rent. You can claim the interest on the loan borrowed to finance the property and all of the related expenses for holding the asset, such as, property agent’s fees, insurance, repairs and maintenance, council rates, water charges and building depreciation.
You should always seek independent financial advice from your accountant to work out the best tax effective strategy to build your future wealth.
If you’re serious about building long-term wealth through real estate and don’t want the worry and stress, then send me an email to book your free discovery session today!
“Thanks so much for all your efforts, we are so time poor with our jobs, sport commitments and our family that it was so great to have you and your company do all the hard yards for us. We found your scope of knowledge, your contacts and your professionalism reassuring and exceptional – all client focused”
Kirk Harrison & Cindy Patmore – East Hills, Sydney