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Investing in Perth Real Estate
Work for a Living - Invest for a Life.
Investing in property for future financial prosperity is a simple investment that most people understand. People can see it, drive past it, it is solid, fairly stable with the added comfort of knowing it is a necessity in life with a good growth history.
With the attraction of capital gains, regular stable income and generous tax benefits, investors over time can grow a modest deposit into a sizeable asset.
Power of Leverage
The basic principle of leverage is borrowing money to buy an appreciating asset.
If the value of the property increases and you pay down the balance of the loan over the years, your wealth increases by building equity in the investment.
The reason why property is so attractive to investors is because it has a better borrowing capacity than almost all other types of investments.
Most banks or lending institutions prefer financing property as opposed to other investments because it is less risky, it is tangible, prices do not fluctuate quickly, it is in demand and it is easy to value.
Property is one of the few investments that you can potentially add value to quite easily.
If the property that is purchased is presented for sale in an average condition, you could tidy or landscape gardens, add mulch, paint, add some light or renovate kitchens - the list is endless.
Most people have done this before in their family home and this can transform the appearance of the investment property, enhancing its value and resulting in a higher rental income.
Assessing Your Profits
Another feature with property investing is that you do not have to sell to get access to profits or equity you have gained.
You can refinance by having a new valuation carried out by your bank and borrow the funds using the increased equity to purchase more property or diversify into other investments.
Property investing offers excellent tax advantages through negative gearing which allows you to offset any losses and deductions against your other income.
Seek advice from a qualified accountant and use a quantity surveyor to prepare a depreciation schedule to maximise the tax benefits of your property investments.
Look at the long-term benefits of building secure wealth through property and set your goals.
Speak with your bank or financier to arrange the best loan to suit your needs.
Research sales in the preferred areas that you are looking to purchase and inspect properties so you have a feel for price and values.
Develop a relationship with a Harber agent who specialises in the areas you are looking in to gain additional advice and to alert you to new properties coming to market.
Have thorough discussions and select a good Property Manager to manage your property to maximise financial growth and income returns.
Invest in areas with dense population that are well established (the old rule - location, location) with low vacancy rates. Rents of the properties must be affordable to the community. Affordable rents make properties easier to rent and enhance continual income.
Buying Through Self Managed Super Funds
The Australian Government has made it possible for Australians to buy properties using their Self Managed Super Funds, either purchasing outright or borrowing funds to purchase the property investment. This strategy gives you greater control of your Super Funds and can be a low cost solution with enhanced tax benefits on income and capital gains.