Investments are a tangible source of income and offer financial stability for the future. Investing in estate or land is perhaps one of the most financially sound decisions that you can make. Investing in properties is stable, consistent, and can be a great source of regular income. There is a reason why investing in properties is popular in Australia, and more and more people are choosing this avenue for money-making.
Buying a property for investment purposes is very different from buying one for personal reasons. Before purchasing a home, the considerations you might focus on are not necessarily relevant when buying a property for investment. For example, one need not consider the proximity to the office or children’s school, the right neighbourhood suitable for your family, etc.
Companies offering investors property services can guide and help you in making the right decision. They offer choices for investing hard-earned money in the right place at the right time.
Here are 10 features that are an integral part of investor property services:
1. Volatile yet easy-to-understand market
Unlike other investment options, which can be volatile and confusing, investing in properties is more stable, consistent, and can be a great source of regular income. The property market is easier to understand and handle, whereas other investment avenues might seem daunting and time consuming. Banks are well versed in the property arena and often have standard procedures for you to follow and fulfil.
2. One-time income with appreciation
Property investment can both be a one-time income/profit generator and also a constant source of regular income. The price of the property might increase over a while, bringing you profits on your initial investment.
3. Income through the rental property for regular gains
You can rent out investment properties, thus ensuring a constant passive income. Consider long-term benefits when revenues are higher than expenses incurred on the purchase and upkeep of the property. After all, the budget for miscellaneous costs like property management, council rates, insurance, vacancy costs, etc., should be factored in before investing.
4. Access to equity
The current market value of your property sans the amount you owe for the property is your equity on which you have access. This equity can be further utilised for other investments or renovations.. Make sure to have the property evaluated to figure out your equity share. Also, the sooner you pay the loan, the higher your equity will be.
5. Better control on investment than stocks
Unlike stocks and shares, which are dependent on others, you have control over this investment. For instance, you may decide to renovate the property for better market price when you feel the time is right and can choose when to sell or keep a property when the market is right.
6. Cost of purchase and financial solidity
Investing in a property can be expensive. Along with the cost of the property, there are added costs like stamp duty, registration fees, legal fees, building inspection, and the price for various treatments like pest control. Investors need to consider financial solidity and chalk in the possible risk factor, which is a probability in all business ventures before deciding to invest in property.
7. Property value based on market trends
The property market value is dependent on the market trends and land rates. Additionally, taking a loan against your equity is dependent on the financial source extending the loan. Remember that you will be adding your property as collateral for the loan. Consider these options carefully.
8. Cost of renovations may or may not add value
When making renovations to increase the value of your property, consider the actual difference the additions will make. Weigh the pros and cons before launching the renovation. Also, keep in mind, the rise in the value might not cover the renovation cost. At the time of sale of your property, there would be additional costs like capital gains tax, important renovations, and real estate agent’s charges.
9. Tax deductions involved
Much of the added costs may be tax-deductible at the time of purchase. For example – fees paid on the loans taken, advertising costs (for tenants), maintenance, etc. You can also take a tax deduction if you have incurred a loss due to the difference in your investment and the expenses incurred as a property owner/investor. Focus on tax deductions overlooking the additional costs towards capital gain tax.
10. Investment through trusts or the exchange
You can also choose to be a part investor via the Australian Stock Exchange or the Real Estate Investment Trusts. These avenues allow you to invest on a smaller scale, thus allowing better liquidity, lower risks, and transaction and tax costs. You can also invest in building construction projects like apartment complexes, which are fast coming up in the suburbs and can be a very lucrative investment.
Consider these basic investment tips and ideas before deciding to invest in a property in Australia. Consider all the options carefully, the finances involved, the short- or long-term gains, the taxation, equity, and consult a financial advisor to make a well-informed decision towards a beneficial investment venture.
