7 Reasons Why You Should Invest in Property and 5 Reasons to Invest in Property. We also have PROPERTY INVESTMENT deals that you would want to see now.
Bernard Salt, author of "The Big Picture" and "The Big Shift", is Australia's leading advisor to the Property Investment and Development Industry, and has been doing commentary for almost two decades on demographic trends. He reports that in recent years there has been a sharp increase in the rate of population growth. The rate of commuters from locations to capital cities has jumped by 20%. The shift towards work-life balance has prompted many Australians to live in Queensland and commute to their workplace. Telecommuting and more flexible work practices simply fed the coastal frenzy early in the new century.
In 1950 Australia had a population of eight million, by the end of the 20th Century this was now 20 million, we added 12 million to a base of 8 million in 50 years. We are a small nation of some 20 million people in charge of the resources of a large continent.
The vast majority of millionaires have made their money through property, by taking advantage of trends like these. In fact 86% of the world's millionaires hold their wealth in property. Well known people like Donald Trump, Warren Buffett and Robert Kiyosaki have used property to amass their fortunes. A large portion of the Rich 200 in BRW made and is continuing to create their wealth from property.
It's simple when you have sufficient equity you can borrow all the money you need to invest; the repayments can be made by tenants and as an extra bonus the Federal Government provides tax concessions to property investors. This combination makes the property investment exercise very affordable and accessible for all.
In summary, investment properties generate:
- Steady and increasing rental income from tenants
- Increased capital value in the land over time
- Attractive tax benefits on the depreciation of the physical house
- Security of ownership
- A growing asset base for retirement and long term benefits for family members.
If you have 7 to 10 years to work with, a well positioned affordable investment property portfolio can give you the financial independence and freedom that many of us need for retirement. For generations, Australians have trusted 'bricks and mortar' as their favoured investment strategy. And with good reason.
While the stock market certainly works well for many, it can be a volatile and risky roller coaster ride. The biggest challenge with successful share investments is knowledge. Competing with professional traders and business people in the know can be a losing game for the everyday investor.
Why Property? - Reasons to invest in property
Easier to understand - Property investment is generally more easily understood than share investment. Although property investment requires a certain level of sophistication it does not require the same degree of technical understanding that share investing does.
Tangibility - Property investment provides tangible evidence of where your hard earned money is going. It is much more satisfying walking through your own investment property than through the aisles of a Woolworths store in which you are a shareholder.
Control - Investing in property provides the investor with a greater level of control over their investment. When making decisions the property investor has complete influence over their investment unlike a share investor whose influence is only as great as their voting power.
High long term returns - Property has historically provided high long term returns, particularly in comparison to fixed interest and cash.
Tax efficiency - Property has a high degree of tax efficiency for a number of reasons. Firstly, its returns are comprised of a growth component that may be concessionally taxed (if held for over 12 months) using the capital gains tax discount. Secondly, property can be highly geared which results in a high deductible interest component. Thirdly, property allows the deduction of a depreciation component for building write off and plant and equipment which improve the after tax return.
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