The advantages of investment properties are many
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- Tax benefits – A number of deductions can be claimed on your tax return.
- Negative gearing – Tax deductions can also be claimed due to the costs of keeping the investment property exceed the income gained from it.
- Long term investments – Rental housing is one sector that rarely decreases in price, making it a good potential option for long-term investments.
- Positive asset base – Showing your potential lender that you have the ability to maintain a loan without defaulting will be highly regarded. The property can also be useful as security when taking out another home, car or personal loan.
- Safety aspect – low-risk investments are always popular with untrained investors. Property fits this criteria with returns in some country areas reaching 10% per year.
- High leverage possibilities – High leverage capacity results in a higher return for the investor at a lower risk due to having less personal finances ties up in the property. The LVR is calculated by taking the amount of the loan and dividing it by the value of the property, as determined by the lender.
- Secure investments
- High capital growth
- High rental returns
- Buy your next home for less than the cost of paying rent