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The Most Important Factors for Investing In Real Estate

Contrary to buying a home to live in, property investment is usually made to make usually via rent. So, there are things that must be considered when looking for the best property investments such as proximity to your workplace.

There are different logic that why investing in property continues to be a popular choice in Australia and is often seen as one of the best ways to invest money. But, confusion and mistakes can be expensive, so it’s always a good idea to think about why you are investing in the first place, and whether it fits with your set of circumstances.


Pros and cons of property investments

Pros:

Sensible: Property is a familiar and sensible investment that’s easy to research and understand. It can also be stable than other investments. Also, banks tend to be well-versed in property and often have a standard process to step you through.


Benefiting tax: When you own an investment property, there are many costs evolved like, advertisements, fees paid on your loan, maintenance, etc that may be tax-deductible. The best Property investors also use the losses arising from negative regulations where the income from the investment is less than the expenses as a tax deduction.


Long term returns: If the value of the property increases over time, it can deliver long value returns over time. You can rent your property and in turn, you will receive your return value thus profiting you in every aspect. At the time when property income is greater than property expenses, it could provide the investor with full income.


Cons:

The expenses for buying and selling property: Over the bulky prices of the property itself, there can be a significant entry cost to investing in the property including stamp duty, legal fees, loan set up costs, building and pest inspections. Before you start, it’s savvy to have a clear idea of how much you will need for the entire purchase process. There can also be more costs to consider, when you decide to sell, including capital gains tax and real estate agent fees.



Tax involvement: However, many investors rely on the positive impact of tax deductions when deciding whether to invest in property, it is also important to remember the potential impact of capital gains tax which you may be responsible to pay. This is the primary difference between property investments and a home to live in, as paying capital gains tax is generally not required for the home you live in.


If you decide to make some changes to your property to increase its value, make sure you are aware of how these changes will impact the value of your property and whether it’s worthwhile.

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