How Investing in Property is Better than Any Other Form of Investment?

by

Aarika Rastogi

Investment property is different from residential property because it is purchased with the objective of gaining a return. This type of property is meant for rentals and can be in any form such as an apartment building, a duplex, a single-family house, commercial property or a vacant land. Investing in property is considered to be a profitable venture and more and more people now prefer investing in property instead of the share market.

What makes property investment a good idea is that an investor can borrow maximum value of the property and get the tenant to cover the mortgage payments through rent. It is an effective wealth creation strategy and facilitates financial security in the future. Moreover, there is lesser risk in investing in property as compared to the shares. Those who own rental properties have to be careful with their investment decisions and should take help of a professional for rental property management. With the help of proper rental property management, one can maximise the return on investments.

There are numerous benefits of investing in property instead of shares and stocks:

1.Lesser risk than stocks and shares- Properties can never go out of fashion. No matter what the market conditions be, people would continue to buy and rent properties to fulfil their housing and commercial needs. Investment property is a safe bet in the current economic conditions and with property being a real and tangible asset, it will always be in demand and can be sold in the market. On the other hand, shares and mutual funds can lose their value when the stock market crashes and you can lose all your invested money overnight.

2.Double income- Through proper rental property management, you can earn extra income because the value of property is bound to increase over time, due to a favourable economy and population growth. So it is likely that the current price of your investment property may be higher than the price at which you bought the property.

3.Leveraging- It refers to using the money of others for your own financial benefit. Investing in property allows you to take that advantage. A property investor can maximise his wealth by leveraging his money to buy investment property.

4.Taxation benefits- Investment property owners can enjoy the liberty allowed by the Australian Taxation Office (ATO) in terms of taxation. An investment property is tax deductible, so if you are a property investor you can claim a tax deduction for the expenses that incurred in buying the property and its management.

However, to enjoy these benefits of investing in property, you have to be very careful about where to invest and when. While share market is highly volatile and fluctuates too often, real estate market is also not untouched by price fluctuations and uncertainties. While purchasing an investment property it is important to consider the following points- location of the property, current price and forecasted future price, population in the area, growth prospects, transportation facilities in the region, whether the expense on the property are higher than the returns and the risks involved in buying the property.

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