This may be the reason why you’re here, knowing that rental property investing is at a high. Because housing will always be a necessity, there will always be a demand. With low home prices and interest rates on a low, investors must take advantage of this opportunity to start investing in their preferred locations.
Long-term rental investments have historically outperformed traditional investments like treasury bonds, the stock market, and CD’S. Real estate offers a low entry point while allowing your assets to grow quickly over time, which obviously makes real estate a sound investment.
What you need to learn from the get-go:
- Understand your options. Because every investment property is different, it’s vital to determine what type of property will fit your strategy.
- Ask for assistance. First-time investors need to find a good real estate agent that’s experienced in many investment properties.
- Choose a good location. Rental property locations are key to beneficial investment. Prefer an investment property that is around schools, parks, shopping, and recreation areas. Nice areas bring better returns.
Now let’s look at some of the benefits of becoming a landlord.
The continuous income. One of the main benefits of going for a real estate investment is the chance to acquire significant income without the need to sell your investment. It’s also possible to get a high single to low double-digit returns on your investment even without using a mortgage.
Protection from inflation. Apart from real estate’s ability to provide a great income, the rent usually keeps pace with inflation. Inflation can also potentially increase real estate’s value while reducing the burden of mortgage debt. Because of this, it can be a good way to protect yourself from the rising inflation, which negatively affects both stocks and bonds.
Tax advantages. Real estate also comes with tax advantages. For example, you can deduct costs such as property taxes, mortgage interest, and depreciation from your taxes and it’s also possible to utilize “losses” to lessen other taxes. You can also defer the capital gains tax if you sell the property and reinvest the proceeds in another one. If you pass, your heirs will be able to inherit the property and sell it without the need to pay any tax on all the appreciation.
You have control. It’s possible to add more value to real estate by buying a property you know will appreciate faster than the overall market. Take note that the real estate market can also be less efficient than the stock market. Therefore, there are a lot of opportunities to profit from more knowledge.
Where to acquire financing
You can find the best fixed rate home loan in Australia through Newcastle Permanent, who offers it along with loads of extra benefits, some of which includes fixed Rates for 1 to 10 years, additional repayments of up to $25,000 p.a., fixed repayments, $0 application fee for personal and car loans, $0 annual value+ credit card fee, redraw, plus discounts and benefits available on other products.
The fixed rate home loan they offer provides the lowest fixed rate home loan interest rates and includes giving you the certainty of knowing what your repayments will be.
In any case, you should know that real estate can work for everyone with the right knowledge and tenacity. There are some crucial challenges to take into consideration. So, before you take the plunge, be sure to research exhaustively first. Best of luck!