Why property works
Property is a versatile asset and provides lots of hard and soft benefits.
1. The search for shelter
Everybody needs shelter, a place to live. Residential property provides us all with safe, practical shelter - a fundamental need. A home can be the family home, a place of newly found independence for young adults, the foundations of a new life for young couples, a temporary place to live or a stepping stone to something else. You could be a home owner, a landlord or wanting to buy your first home. What we choose to live in and where we choose to live often reflects our stage and age in life.
For many people, renting is an affordable, practical and convenient option. Lots of people rent these days - corporate executives, families, overseas students … and it’s a growing trend! The majority of rental property in Australia is provided by individual private investors. Without them tenants would have far less choice of where and what they could rent. More dynamically, property can be a beautiful and inspiring place to live.
2. Your own tax free bank account
Your own home is not subject to capital gains tax. This means when you sell your property any increase in value (growth) is yours to keep – tax free. It’s a unique and attractive benefit. Unfortunately, for many Australian’s it can be their only mechanism of creating wealth.
3. It’s good for the economy
The Australian Federal Government offers tax incentives for people who invest in property. There are significant benefits to the economy in doing this. Firstly, the building industry is a major employer and stimulus to the economy. Secondly, people who invest in residential property make an important contribution to the rental market & public housing. Without private investors there would be significant pressure on existing rental stock and unsustainable financial pressure on Federal & State Governments to provide more public housing.
4. Keep more of your earned income
Australians pay a high level of direct and indirect tax. Every day, tax and inflation erode the buying power of your pay packet. What can you do?
“the more you earn, the less you keep!”
The key is to put a part of what you earn into assets that go up in value, provide tax relief and build an independent source of wealth now and in the future. It is also an outstanding wealth creation strategy with a proven track record of success. In the medium to longer term, good quality property is a stable and secure investment, which will appreciate in value and/or provide a regular income. Others have succeeded with property – so can you!
Tax benefits provided to property investors mean that some expenses and costs associated with property ownership are tax deductible. The result is you pay less tax and keep more of your income. Along the way you enjoy the benefits of capital growth and a regular rental income.
5. Is working for a living enough?
If the latest research is true, the answer is clearly NO! More people are working harder and longer without achieving the rewards that their efforts or talents deserve. After a lifetime of work most people will not have enough money to live independently in retirement. In fact, two thirds of retirees rely on the aged pension as their main source of income. Most retiring Australians are prisoners of a pension and have severely limited lifestyle choices.
Property provides the double benefit of growing in value faster than you can save and earns an income while you sleep. For many Australians, a good quality rental property produces a reliable and regular income stream that is paid weekly right into your bank account. You are in control.
6. Property has a proven track record of success
Australian's love bricks and mortar. It is estimated that about 50% of Australia’s wealth is in real estate. More than in superannuation. According to econimist Saul Eslake - Australia's relatively even spread of wealth is in part due to its investment in property - either their on home, investment property or commercial stock.
Would you like to know more?
It is difficult to build enduring success based on a punt or luck in the market. Those who have built wealth in property -
· Have a plan or strategy
· Base their decisions on relevant & accurate market information
· Involve finance, property and tax specialists
· And are alert to opportunities.
You can start today to create real wealth using the latest ideas in finance, tax planning and property selection. Let me show you how.