Property investment = Wealth creation.
The majority of wealthy people have used real estate for wealth creation, and property investment consistently remains the safest way to achieve wealth.
Anyone can do it
Banks will lend you up to 95% (and in some cases 100%) against the security of residential property, which means that most Australians with a steady job, equity or some capital behind them can afford to buy investment properties. It has been shown over and over again that careful and intelligent use of real estate can enable ordinary Australians, to become property millionaires in a short 7-10 year cycle.
The reason banks lend a significant portion of the value of your property is that they know property values have never fallen over the long-term. In fact, the entire Australian banking system is underpinned by the continual long term growth of residential property. You can also insure properties against most risks - fire or damage, tenant leaving, damaging your property or breaking the lease.
Income that grows
You can borrow against the rental income from your investment property, and over the years the rental income received from property investments has increased at a rate that has outpaced inflation. This increases your yield on the property, allowing you to pay it off sooner or utilise this extra income into further borrowing capacity on another investment.
Consistent Capital Growth
Good capital city residential property has consistently produced high and consistent capital growth. Over the past 25 years the value of the average property in all capital cities has doubled in value every seven to 10 years.While all our capital cities growth have averaged growth of around 8-10%, compounding each year over the last 25 years, these are just averages. The better your property selection – where you buy, what you buy, how well you negotiate and how you finance your property investment – the better your returns could be.
You can buy it with someone else's money
The ability to use leverage with real estate significantly increases the return on your investment capital and, importantly, it allows you to purchase a substantially larger investment than you would normally be able to.
You are in control
Property is a great investment because you make all the decisions and have direct control over the returns from your property.
Property investors are able to take advantage of a range of tax benefits including tax deductions and depreciation allowances.
You can add value
There are many ways you can add value to your property, which will increase your income and your property's worth.
You don't need to sell it
Unlike most other investments, when real estate goes up in value you don't need to sell in order to capitalise on that increased value. You simply go back to your bank or mortgage broker and get your lender to increase your loan.
Even if you bought the worst house at the worst possible time, chances are that it would still go up in value over the next few years. History has proven that real estate is possibly the most forgiving investment asset over time. If you are prepared to hold property over a number of years, it's bound to rise in value.
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