A common trait of wealthy people is that they own real estate. They don’t rely on shares alone to maintain or grow their wealth, they look to property. But for many people investing in property seems risky, scary and just too hard.
But it should be a part of your wealth accumulation planning.
Wouldn’t it be great to have another asset that produces income for you while you are alive, and then something you could pass on to your children or family in your will?
Investing in property can provide security and freedom
Real estate is an asset and wealthy people own assets that produce income. It’s one of the smartest ways to make money. Where else besides property can you buy an investment with a 10 percent deposit and have a renter pay off the rest of the investment for you?
Wealthy people own real estate because it is an ideal investment that provides:
1) passive income/cash flow – it can provide a foundation for positive monthly cash flow and permanent passive income. The moment your rents exceed your monthly expenses you have cash flow. There is no limit on the amount of years that you can collect rents on any given property.
2) appreciation – over time property values generally rise. As Australia’s population expands the demand for property will increase, and demand drives appreciation. This is happening now.
3) tax advantages – there are huge deductions available to investment property owners. You can claim for a whole raft of things like advertising for tenants, owners corporation fees, council rates, land tax, depreciation, mortgage interest and borrowing fees. Even losses are tax deductible.
4) leverage – using someone else’s money to buy an appreciating asset is a smart move. By using the bank’s money you can leverage your own resources, and in a low-interest environment where your property is growing in value, coupled with a renter helping to pay your loan, you can let time and appreciation work for you.
Check out this property investment opportunity
If you are thinking of investing in property then take a look at our video on buying an investment property in Mooroolbark at Paperbark Place. The opportunity is exciting.
