There is no denying that a long-term investment can help you build good wealth and make you feel financially secure. It allows you to plan for your retirement and fulfil your personal as well as financial goals. However choosing between stocks and real estate for a good investment is a tough call.
According to investment experts, it is always good to buy a property in Australia if you want higher returns in long run. Of course, stocks have a proven track record of good returns, it is an individual decision depending on their budget and financial goals.
Here is a complete guide on whether you should invest in real estate market in Australia or not. Keep the following reasons in mind:
Capital Growth
The best thing about real estate in Australia is that it is likely to rise in value as long as you are patient. Believe it or not! The Australian property market has exploded by more than 400 per cent in the last 20 years and is continue to boom.
However, there is a myth is that a residential property in the hotspots of Australia will double in value every 10 years. If you enter the real estate market with the same expectations, you will stay disappointed. But you can’t ignore that investing in property can help you generate substantial earnings in the long run that is why getting a home loan from a bank is comparatively easy.
Tax Benefits
One of the key benefits of buying a residential property in Sydney, Gold Coast, Melbourne, etc is that even if the rental income doesn’t cover the entire expensive, you will still have a tax concession that you can leverage the benefits.
Always remember that you have had to pay for loan repayments, utilities and council rates at the end of the financial year. You can use all these expenses to offset your taxable income.
Earn Passive Income
Many people invest in property because it can help earn additional income. Buy a residential and commercial property and find a tenant so that you can earn passive income every month. Make sure you maintain the property, keep it clean and sanitised to attract potential tenants.
Believe it or not! An additional income stream goes a long way and can support you financially when you retire.
Give You Stability after the Retirement
You may want to quit your job early and live close to the nature in Australia. Property investment at an early age can help you generate income and this will secure your retirement life. If you own more than one property, you can earn a lot of passive income from rental returns without a hint of stress.
You can also buy a larger value house, hold it for a few years and sell it to live off the capital gain. Make sure you plan everything ahead of time, do proper research about the real estate in Australia, its trends, property investment and other aspects before investing your hard-earned money.
Low Interest Rates and Government Incentives
It is always good to wait for the right time when you can invest in real estate market. The property prices in Sydney, Melbourne and other parts of Australia are increasing and this is the best time you should invest in it.
Apart from this, the recession across country saw a dip in residential and commercial property during the COVID-19 times. But, the situation is getting better and the government is encouraging people to buy homes by offering lower interest rates and financial support.
You should leverage the benefits of low interest rates and incentives and become a smart property investor.
Have a look at pros and cons of Property Investment in Australia so that you can make the right decision:
Pros:
- Access to Equity
- Less volatile
- Benefits of tax concessions
- Long-term growth potential
- Control over the value of property.
Cons:
- High prices of properties
- Pay for capital gains tax
- ROI is never fixed
- Market fluctuations due to COVID
Conclusion
These are the top reasons that will help you make the right decision for your long-term investment plan. It is good to hire professionally-trained real estate agent who can assist you in property investment process.
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