- Posted By Navin De silva
Wealth creation is basically the accumulation of assets – that generate income- over a long period of time. Investing in stocks, fixed deposits, mutual funds, gold and commodities are some wealth creation strategies.
One of the more popular strategies used to create wealth is to invest in property. For the common man, this is most likely residential property. And why not?
Investing in residential property has many advantages as a source of wealth. If you are considering purchasing property, here are some facts about residential property investment that will help you make up your mind.
Property investment is considered a much stable and secure investment than other types of wealth like say stocks or mutual funds. In volatile economic conditions the value of property is likely to be more resilient. Even if the housing market is slow or facing a fall in prices during a period of time, it is all part of the property cycle and will eventually recover. Especially in the Australian market, where despite rises and falls in the market, there is strong demand due to the growing population.
These falls will not cause any real loss or fall in value to your property unless you try to sell it. If you have a healthy income from the property in the form of rent, then you have the necessary cash flow to maintain the property until the prices rise again. As long as you have purchased the right property in the right location, residential property is one of the most stable and secure investments you can make. Obtaining professional guidance to purchase the right property will secure your investment in the long term.
Residential property is a tangible investment. It has a physical presence that gives more control to you over improving its value or income. Property value will increase with small improvements like adding new fixtures or closets and giving it a fresh coat of paint. If you are looking to increase the value on a larger scale you can remodel or restructure the property or parts of the property like the kitchen or garden area. You also have control over the decisions of where, how and when you buy and sell your property.
Economic conditions can affect the property market and property values. However, this is on a much smaller level than shares and financial market. The property market is very resilient and is not influenced by current news or driven by emotions unlike the share market.
- Relatively simple asset to understand
As a whole property is a relatively simpler asset to maintain and understand. You can understand the type of residential property you own and the strategies that need to be implemented to increase its value or generate income.
- Tax deductible expenses
By investing in residential property you can claim tax deductible expenses especially if it is used for rental purposes. Reducing your tax bills will also improve your cash flow. You can obtain professional advice in reducing your tax bills through your property investment.
- Less complex purchase process
The thought of purchasing property may sound intimidating, but it is a lot simpler process if you have the correct guidance from a professional property advisor. Residential property purchase is less complex compared to the purchase of commercial property. Despite the paperwork involved, organized finances, proper research and expert guidance will make the process much smoother. Seeking the advice of professional property and valuation experts will help you avoid overpaying or buying a worthless property.