Investors

Why people invest in property?

We've known it for a long time; Australians definitely have a love affair with property. That's one reason why many of us choose the bricks and mortar type of investment over shares and other non-tangible options. But does investing in property pay off? Here are some reasons why people choose property as their strategy:

• The potential to earn a profit as a result of gaining capital growth.
• To supplement their income with the rent they earn from their investment.
• Take advantage of tax benefits. Rates, insurance, certain bank charges and repair costs may be claimable as tax deductions.
• Use the equity in their home to build a nest egg for retirement.

Whatever your reasons, make sure you have a good accountant who is well versed in investment home loans and property to advise you before, during and after you make the plunge in the investment property pool.

What do you need to consider when investing in property?

• Think long-term strategy rather than a quick win. Property investing is for those who patiently wait for the market to be in their favour and who weather any economic storms in order to realise capital growth from an investment home loan.
• You don't have to fall in love with the place to buy if it's for investment (unless you have a long-term plan to move in). You do need to make sure of its potential to offer a good return in rental income and that it has potential to increase in value. (Is it in a good area? Are there amenities and features that appeal to buyers and renters alike?)