Investment Hints & Tips
Why should you consider investing in bricks and mortar?
Property investment offers many advantages. Unlike your money stuck in a bank savings account, it is considered a growth asset class where capital growth outstrips inflation. This means overtime you increase rather than decrease the capital value of your assets.
Shares are also a growth asset. However, it’s hard to get truly independent information for investing in shares, where as property is a tangible, transparent buy. The expression ‘investing in bricks and mortar’ means you get a real asset you can touch and feel for your money.
If your shares become worthless overnight, you are left with paper. If your property drops in value, you can always live in it. You should consider getting expert advice from a financial specialist before investing in property.
When choosing which property to buy, consider whether people in the area would want to live there (remember, it’s not a property for you to live in).
Also understand that:
> With newer buildings you may be able to reclaim up to four per cent of the building’s value annually
> Only the interest component of a mortgage for investment can be tax deductible, which is why many property investors use interest only loans
> Property is a growth asset
> Choosing a reputable property manager (fee is tax deductible) will reduce vacancy times and result in better tenants. Why not speak with a property management expert from Richardson & Wrench.
> Don’t forget to claim depreciation on your investment property. Regardless of age, depreciation can be claimed on most properties, potentially resulting in thousands of dollars back in your pocket at tax time.