The property buying process can be exciting and overwhelming, but it’s a worthwhile investment of your time and money. 

Whether you’re going it alone or considering using a buyer’s agent, the property investment experience will provide you with some excellent transferable skills and a fantastic knowledge of the industry overall.

When you buy investment properties, you have the potential to receive back what you put in tenfold in terms of experience and money. If you’re thinking about investing, here are the top  five reasons why you need to stop thinking and start buying:

1. Passive Income Source

Breaking into the property market has the potential to set you and your family up for life if you approach it strategically. It’s one thing to buy your dream home for you and your family to live in, but a whole different ball game to gather rental income from buying a house and leasing it out.

Property investors have the ability to sit back and relax as their properties generate income in the background. Home loans are passively paid off through rental income, enabling the investor to focus on their families, hobbies, and careers.

Recently, rental properties have been in high demand. There is very little vacancy time, renters are more likely to sign a 12 month lease, and will pay higher prices that cover rising interest rates, property management fees and maintenance costs. These factors mean gross yields gained from investment properties are currently quite high.

Gross yields are obtained by taking the total annual rent and dividing it by the purchase price of the property. For example, a $500,000 property that receives $450 per week in rent ($23,400 per year) has a gross yield of 4.68%.

2. Long Term Capital Growth

Not only will property investment give you a passive income source but it will also continue to grow in value over time. What you gain from your property portfolio now will only increase in the coming years, future-proofing you and securing you an early retirement.

To ensure consistent capital gains, it is important to research the best cities and suburbs to buy in. Understanding that growth can be cyclical and dependent on current events also contribute to the overall return on investment. 

3. Tax Deductions

In Australia, there are several tax deductions you can make the most of when you’re an investment home buyer. Some of the most useful tax deductions available include:

• Rental advertising costs: If your property appears in any paid advertising mediums online or in print, you can claim the expenses against your income.
• Loan interest: Any interest or associated bank fees charged on an investment property loan can be claimed.
• Council rates: If your investment home is being rented, you can claim the council rates for any tenanted period within that financial year.
• Strata fees: You can claim body corporate fees if your home is on a strata title.
• Building depreciation: This one depends on when the property was built, but you may be able to claim a deduction on any depreciation your structure may experience and any renovations you decide to make.
• Repairs and maintenance: Any wear and tear related repairs can be claimed.

The above list is not exhaustive – there’s at least double the number of deductions you can make as a property investor. Of course, we recommend speaking to an accountant or financial advisor about these claims to see if they are relevant to your investment circumstances.

4. Portfolio Diversification

Diversifying your portfolio is a great way to minimise investment risk. For those who have only bought in an owner-occupier capacity previously, it can be daunting to step out of the comfort zone and purchase an investment property outside their local area, but it is a necessary step for future-proofing.

For example, if the suburb you live in experiences a decline in average property value, chances are that any investment properties owned within the same area are also going to feel the same effects. Investing outside the box can lower this risk and keep your portfolio safely ahead of the curve.

Investing diversely lowers the risk of capital loss and opens the doors to flexibility when it comes time to sell.

5. Security and Authority

Of all things you could invest in – hobbies, crypto, businesses – homes are the least likely to leave you broke, because property does not go broke or out of trend. Even banks recognise property as a safe investment to rely on for income generation.

Despite fluctuations in property prices over time, the homeowner market is huge and foundational to the overall Australian economy. 

Furthermore, the value of a property is completely within your control once you sign on the dotted line as you call the shots on the renovations and repairs that will increase worth.

Monopoly Wealth has got you covered

Whether you’re a first-time investor or looking to expand your current property portfolio, it’s always a sound decision to work with an experienced property buying agent. It can take months to research homes and suburbs if you are approaching the process alone. Buyers agents take out all the heavy lifting so you don’t need to break your back trying to set yourself up for early retirement.

Monopoly Wealth will build you a bespoke property portfolio based on your specific needs and wants. Follow us on Facebook and Instagram for industry updates and don’t hesitate to DM us to set up a free consultation!