Of all the things you could invest in, why choose property? Property was traditionally seen as an area for the elite and wealthy to trade and invest in and its image certainly hasn’t been helped by the recent GFC either and all the talk of the housing bubble and subprime mortgages.
However, this negativity can in fact cloud the fact there are many good reasons to invest in real estate. In essence, it’s just purchasing a future income stream with a bit more effort today – plus, the value of your property can soar if you buy a place that is currently undervalued! Here are five good reasons of why you should invest in property:
It’s real and it’s there
Stocks may be the traditional area where it makes sense to invest, but property holds the advantage of being actually, really there. This is a bricks-and-mortar house or flat that you’re talking about – it’s a lot harder to just vanish into thin air or rapidly decrease in value, unless a natural disaster strikes. Even when the economy stagnates, real estate can generally still provide you with steady returns, which can’t be said for many other investments.
It’s your choice
Three-bedroom apartment or one-bedroom house? Flat in the city centre or sprawling house in the suburbs? Or maybe you should go commercial? It’s all up to you to decide. By doing the right research, you can find a place that’s right for you, both financially speaking and simply based on what you like. Given that investing is such a big decision, it helps to have so many options and that degree of control, which can’t be said for many other types of investments.
It has tax benefits
Tax: the all-important factor to take into consideration. Investing in property can help you lower your payable tax because you can claim a number of deductions on your tax return. For example, interest paid on the loan, repairs and maintenance, rates and taxes, agent’s fees, and building depreciation can all be discounted. Claiming building depreciation is a particularly good way of increasing your cash flow, especially if your property is brand new or relatively new.
It will grow grow grow
This is perhaps that most important point. There’s a reason why there’s a saying: “safe as houses”. Property increases in value. History has clearly shown that real estate prices continue to steadily increase over the years. If you’re willing to invest long-term, you’ll really see the capital gain – a property doubling in value sometime within a decade is certainly not unprecedented, especially in the capital cities.
It’s an essential part of life
Last but not least, you should invest in property because at the end of the day, everyone needs somewhere to live. Property is a sound investment because for one, you can live in it yourself! Second of all, the population is continuing to grow meaning that there will always be people looking for a place to live, should you choose to rent out your property.
- Photo credit: smartphotostock.com
Beth Griffin is a freelance writer who is interested in property and real estate. She has recently been looking up some commercial property with Goodman for her new start-up, and likes what she sees!