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Investing in Property: Start Building Your Wealth
Investing in Property: Start Building Your Wealth
Investing in property can be a powerful way to grow your wealth over the long term. With careful planning, research, and the right support, you can make confident decisions that set you on the path to financial success.
Why Property Remains a Smart Investment
Why Property Remains a Smart Investment
Property continues to attract investors because it offers stability, long-term growth, and the potential for consistent rental income. The demand for affordable rental properties is strong, making real estate a reliable choice for those looking to build steady capital growth. However, success comes down to doing your homework and making sure your investment is financially sound, not just now, but for years to come.
Property offers stable, modest 5-year returns, while shares rise sharply with positive drivers; shares likely outperform in current conditions.
Key Considerations:
Houses typically yield higher capital gains, while units tend to come with lower maintenance costs.
Making the Right Choice: Units or Houses?
Making the Right Choice: Units or Houses?
When choosing an investment property, consider what type of property fits your goals:
Houses: Usually cost more upfront, but historically tend to appreciate faster, offering greater potential for capital gains.
Units or Apartments: Often lower-maintenance than houses, especially if they have shared amenities, but watch out for ongoing body corporate fees.
Location Matters More Than Ever
Location Matters More Than Ever
You’ve probably heard it before: location is key. For rental properties, it’s not just about prestige—it’s about convenience for tenants. Properties near schools, shopping centres, public transport, and infrastructure developments tend to attract higher demand. Take the time to research local market trends, rental rates, vacancy levels, and upcoming infrastructure projects. Visiting the area as a potential renter can give you valuable insights into what makes a location desirable.
Factor in All Costs
Factor in All Costs
Owning an investment property comes with ongoing expenses beyond your loan repayments. These include land and water rates, maintenance, and repairs. Tenants expect timely upkeep, so make sure you have the funds to meet these obligations. For units and apartments, consider body corporate fees, which can be significant in modern complexes with shared amenities. Older buildings may also require contributions to sinking funds for maintenance.
Choosing the Right Loan Strategy
Choosing the Right Loan Strategy
Many investors use interest-only loans because the interest can be tax-deductible, helping maximize long-term gains. Negative gearing is another popular strategy for high-income earners, while positively geared investments may benefit from principal and interest loans to reduce debt faster. Always consult your accountant about tax implications so your broker can find the loan that works best for you.
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