The beginning of a new financial year is a great time to review your finances. Take a look at your bank account, and current assets, and ask yourself, is this where I want to be financially? If you answered no, then you need to start implementing changes now.
Here are four reasons why investing in property should be at the top of your new financial year resolutions list.
1. Create wealth independence
What are your financial goals? Do you want to help your children with their future educational expenses? Do you want to spend more time travelling? Do you want to live a comfortable retirement?
Whatever it may be, a well-researched property investment strategy can assist you achieve your idea of wealth independence.
2. Historical growth
In most cases, Australia property prices have doubled every ten to 12 years. For example, if you purchase a property today for $350,000, it could be worth $700,000 in ten years. As ParkTrent CEO, Ron Cross, often asks new clients, “Knowing what you know today, how many investment properties would you have purchased ten or 20 years ago?”
It’s never too late to get started. And with interest rates at record lows, now is a great time to invest.
3. Benefit from tax incentives
Tax is the biggest expense incurred by most Australians. Yet most people pay and forget about it. It’s automatically withheld from their income so they don’t even think about it. As a property investor, you can benefit from tax minimisation strategies such as negative nearing, depreciation and other property deductions. Common deductions include: advertising for tenants, bank charges, body corporate fees, repairs and maintenance, council rates, insurance, loan interest and legal fees.
Wouldn’t you like to reduce the amount of tax you pay? The start of a new financial year is a good time to start thinking about future deductions. As Kerry Packer famously once said, “Of course I’m minimising my tax. If anybody in this country doesn’t minimise their tax they want their head read.”
4. Pay off your mortgage sooner
Home ownership is the good old Aussie dream. But it is a big expense that does not offer any tax deductions. So if you have a mortgage, you should aim to pay it off as quickly as possible. Owning an investment property can help you do this. You can use the cash flows created, or sell your investment property in the future, to pay off your mortgage faster.
Many people make the mistake of thinking they must pay off their mortgage before making another financial commitment. This isn’t necessarily the case. As we’ve shown here, an investment property will bring its own financial rewards. The key is to be patient and to start as soon as you possible can.
Is purchasing an investment property one of your new financial year resolutions? Let ParkTrent help you. Contact us today or attend a free property investment seminar near you.