Bonds, cash, stocks – there are many investment options out there. So why insist on investing your in real estate? Well, if you are looking for long-term stable investment, property certainly makes an obvious choice. The following are just some of the reasons why a property should be your first big investment.
It is easy to get financing from banks.
Here’s the thing, while they may appear stoic when you applied for that home loan, banks do like properties. Revenue from mortgages comprises a major chunk of banks’ profits. Which is why lenders are more inclined to provide full funding for properties, especially residential, at a lower interest rate than any other assets because the properties themselves make a good collateral.
It is safe.
Generally, properties are hedged against rate changes. In Australia, for example, properties increased in value at an average of 11.4% per year since 1926, keeping investors’ money safe and investment unaffected by a succession of economic crises, recessions, and disasters.
Its value appreciates over time.
Property investment is like wine, it gets better over time. Especially those located in strategic locations with lots of opportunities for development, you will not only benefit from your property’s steady capital growth but also monthly rentals. The rags to riches story of Joseph Frangieh, one of Australia’s renowned property developers, should inspire you.
It is easy to learn and begin with.
Specialized training or not, you do not need specialist knowledge and skills to be a property investor. As a matter of fact, many successful investors did not start off intending to make fortunes in real estate. Most of them started off as ordinary homebuyers just wanting to live in a house they can call their own.
It offers tax benefits.
Here’s what many probably did not know – real estate investment offers tax benefits. This happens when the property’s ownership cost is lower than its earnings (negative gearing), creating a taxable loss as a result. Negative gearing can be set off against your monthly salary and other income as a tax deduction.