Why Invest in Property?

Investing is a choice many people make at one point or another, in the hope of bringing wealth to their lives. Whilst there are many investment alternatives such as stocks, bonds and cash, property investment tends to be viewed as one of the safest and easiest options.
However, property investment isn’t for everyone. Thus if you are considering investing in property, it is important to weigh up the pros and cons.

ProsCons
Capital Growth: The value of your property will grow over time and may be extremely benefcial fnancially if well chosen. Not only will you beneft from steady capital growth, but regular monthly rental returns.Liquidity: Although you can sell your property if things get tough, the process is not as quick as it is to sell other investments such as shares.
A safe investment: This is the only investment market which is not dominated by investors, hence creating a natural buffer in the market.Hidden and ongoing costs: Along with the initial costs of investing in property (i.e. stamp duty, deposit, legal and conveyance fees), you will need to consider the ongoing hidden costs of property investment such as ftting out the property, maintenance and repairs, building and landlord insurance, land tax, water rates, council rates, etc. Other investments such as shares do not incur ongoing fees.
Mitigate risk: You can insure your asset against most risks; fre / damage / a tenant leaving, damaging your property or breaking the lease.Rent free periods: During the periods when you are unable to fnd a tenant and the property is vacant, you will need to cover the mortgage repayments.
Anyone can invest: You do not have to possess a vast amount of knowledge, as you may with stocks or opening up a business.Bad tenants: Problematic tenants are every owner’s nightmare. They can severely damage your property, refuse to make payments and sometimes even refuse to leave the property.
Control: Unlike other investments, you are in full control of your property investment; you can make all the decisions and have control over all of your returns.Other costs: Although negative gearing may offer tax deductions, you will need to consider and budget for the shortfall between repayments and rental income as well as the cost to cover repayments when the property is vacant.
Tax benefts: Although tax benefts should not be used as a decision-making factor, it can be a beneft of investing in property. If your property is negatively geared, it may provide tax benefts.

Note: it is important to consult your fnancial advisor to seek advice.



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