Without a doubt, property investment is the best wealth creation tool. Since time immemorial, property has been the foundation of wealth. The wealthiest people in the world – from world leaders to actors – have huge property portfolios. Banks and life insurance companies also own many properties – from hotels, to shopping centres, to vacant lots. It is estimated that approximately 50% of all the wealth in the world is in property. If you dream of becoming wealthy, start buying investment property.
When it’s all said and done, only one person can help you to create wealth – yourself. But it is impossible to create wealth without proper knowledge. The more you know about property investment, the more confident you will be in making decisions. Read, ask questions, and learn from the experts. Here are some reasons why you should invest in property.
You don’t need to be an expert in order to start investing in property. Many wealthy Australian investors were once amateurs. People have the perception that Australian property is unaffordable, that buying property in big cities is next to impossible because of the high prices. However, you can buy property in cheaper capitals, regional towns, and middle-ring suburbs. If you buy a good property, it can increase in value faster than more expensive properties.
According to research, the Australian real estate market has increased by 11.4% every year since 1926. This increment is similar to that of the Australian Securities Exchange. However, the property market has never been affected by the instability that is common to the share market. Property investment is a much safer option than the share market.
You may not know this, but lenders love property. Home loans make up a large part of a bank’s business model. In fact, banks lend more money for residential property than other asset categories. They lend a large percentage of the value (as much as 95%) and give lower interest rates to attract borrowers. Loans for residential houses have lower interest rates than those for commercial property. Unquestionably, it is easier to borrow money for property investing than for other assets.
If you want to generate wealth through property investment, you must make clever choices. One myth most new investors believe is that properties always deliver positive returns. This is not always the case. Property investing can make you wealthy, but it isn’t a direct road to riches. The good news is that with the right tips, you can buy a good property. Here’s how to find the best property.
Researching is the best way to find a good investment property. Find out if there are upgrades of shopping districts or main streets, planned developments, soon-to-be completed roads, and recent resource discoveries. Ask renters and homeowners in the area about the good and bad features. Renters will be more honest because they haven’t invested in the area. Also visit the neighbourhood on different days at different times to see how it looks.
There’s no use purchasing a property if you will never be able to find tenants or buyers. Pick a good location so as to attract the right people. For example, if you want to buy a rental property, look for one near commercial buildings. You won’t have difficulty finding tenants. Look for Infrastructure One of the tell-tale signs that an area is headed for greatness is the infrastructure. An area with good roads, public transport, eateries, schools, and shopping malls is worth investing in. If the property is near a school, learn more about the school before you buy. A school with a poor reputation can have a negative effect on your property.
The Australian tax system is in-depth so it is important to seek expert advice. There are basic taxes that are applicable to purchasing property in Australia while others are applicable to certain states. Ask a tax advisor to walk you through the area’s taxation issues before you enter a property transaction. If there is a legitimate way of saving tax, he will ensure you know about it.
When buying an investment property for wealth acceleration, you cannot afford to follow your emotions. Don’t get so emotionally attached to a property that you end up buying with your heart and not your head. You may pay much more than you should have. Remember that it is an investment property and not your permanent residence. Simply make a list of your priorities. Listing the important qualities can help you to find the right property.