Why you should invest in property

Apart from purchasing a property and seeing the uptick in value over time, there are additional financial incentives and benefits that – if you buy well – arise as part of the process of investing in property. 

Historically many Australians have achieved financial success by investing in property, and because of this proven success over time property has rightfully earned the reputation of being an accessible and safe wealth creation strategy. By selecting the right assets property investors can build relatively predictable cash flow, access big returns, make the most of tax advantages, minimise risk, and diversify and protect their wealth…with the added possibility of leveraging property assets to supercharge wealth above and beyond the purchase of just a single property. 

So, if you’re considering getting into property investment and need some additional motivation, read on to find out more about some further benefits and perks you may not have considered just yet!

Rental income and yield

This benefit is quite clear but we thought it worth mentioning up front! One of the key ways property investors make money is through rental income. Rental yield is simply the difference between the income you receive from renting out the property minus the overall costs of the investment (usually expressed as a percentage). The higher the yield percentage, the higher your return on investment (ROI), and the greater your cash flow. Rents generally increase over time, generating higher, more consistent cash flow. 

Cash flow 

Cash flow is the net profit (or loss) realised after all expenses pertaining to the property have been deducted. So, one of the key benefits of property investment is that it has the potential to generate positive cash flow and additional income!

Tax incentives 

Property investors can take advantage of a range of deductions at tax time, you just need a great accountant to help you plan out how to claim as many of the costs of owning and managing a property as you can! In addition, a financial planner can assist you with how to defer or minimise capital gains when its time to transfer or dispose of your assets.

Equity and wealth creation

When it comes to equity, the more you pay down your mortgage over the years, the stronger your share of equity in the property becomes! Combined with the underlying organic growth in the value of your property, plus the value of any improvements you may have made (provided you haven’t made the mistake of overcapitalising), you can leverage this accumulated equity to purchase another investment…effectively diversifying your portfolio, spreading the risk and increasing your wealth and potential cash flow even further. 

Diversification

It pays not to have all of your eggs in one basket…and don’t have just eggs! Why? Because if all of your wealth is invested in the stock market and all of a sudden it crashes, then you can find yourself in serious trouble if you need to sell…or you panic. And so the aim of diversification is to spread out your investments across different asset classes, sectors and strategies, so that a downturn in one particular area is less likely to impact your portfolio as a whole. Hence, holding property adds to your wealth diversification, creating increased security when it comes to protecting and growing your overall long term wealth.

How to get started as a property investor

Nowadays entering the property game for profit can be a little trickier, especially if you have plans to build a substantial income-generating portfolio for retirement, so you need to be smart about how you approach the process and who you consult along the way. 

The team at One Haven are experts in property investment in Australia. With an extensive history in property, we can provide you with clear, concise and confident advice about what approach will best suit you. We’ll help you navigate the complexities of the property market, provide you with the best advice to build your portfolio and grow your personal wealth. So don’t wait, contact us to speak the team and get started right away.