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5 reasons why you should invest in real estate

Why should you invest in real estate?

Well…I recently had a discussion with a friend who knew my passion for property investment and he asked me to give him three good reasons why he should invest in real estate rather than in other asset classes.

Rather than give him three reasons I gave him five reasons why property investment is the way to go.

Here they are

1. Powerful yet Stable

The last few unstable economic years taught investors they must find find assets that are both powerful and stable and property fits the bill.Powerful yet Stable

By powerful, I mean that investments that act as a hedge against inflation and have the ability to grow at wealth producing rates of growth through leveraging.

By stability, I mean investments that grow in value steadily and surely, without major fluctuations in value.

2. Leverage

Property allows me to use other people money to leverage my funds and purchase larger investments.

3. Tax benefits

I like the fact that the government helps subsidize my property investments with substantial tax benefits including negative gearing and depreciation allowances.

4. The ability to add value

There are hundreds of ways you can add value to your property, which will increase your income and your property’s worth.

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5. An imperfect market

As opposed to shares where all shares in the same company are sold at the same price and, in general, all the players in the market have similar knowledge; the property market is imperfect.

This means I can use my knowledge and contacts as well as my negotiation expertise to buy a property considerably below market price.

In the share market this type of knowledge would be considered insider trading and illegal.

Obviously there are plenty more reasons I think property is the way that average Australians can build financial freedom, but I think that was enough to convince my friend.



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About

Shannon is director of Metropole Properties Brisbane and as a successful property investor and licensed estate agent, his years of industry experience helps his clients maximize the performance of their investment properties. Visit www.BrisbaneBuyersAgent.com.au


'5 reasons why you should invest in real estate' have 6 comments

  1. Avatar for Property Update

    March 7, 2012 @ 10:55 am LYDIA PERITORE

    What is your opinion regarding property investments in studios and units that are leased out to hotel chains such as Mantra, Oaks, etc.
    Many thanks
    Lydia P.

    Reply

  2. Avatar for Property Update

    March 7, 2012 @ 6:34 pm Michael Yardney

    Lydia
    I really don’t think these type of properties make good investment. In fact I know they don’t.
    Banks don’t like lending against them and there is no secondary market for them – If you try to sell them you are only limited to a really small group of investors rather than the much bigger owner occupier market

    Reply

  3. April 3, 2012 @ 3:51 pm 5 reasons why you should invest in real estate « towns shearing's blog

    […] Source: Michael Yardney […]

    Reply

  4. Avatar for Property Update

    November 16, 2015 @ 9:58 pm IRENE

    Hi Michael,
    Are Eastwood & Epping, NSW – properties make good investment ?
    Many thanks.
    Irene

    Reply

    • Avatar for Property Update

      November 16, 2015 @ 10:08 pm Michael Yardney

      Probably NOT Irene
      But I don’t know your proeprty strategy, you budget, your experience, so I can’t be sure, however these suburbs are not on my list

      Reply

  5. Avatar for Property Update

    November 23, 2015 @ 5:10 pm mavinrealestate

    This is the exact information that I was looking for. Thank you for sharing your expertise!

    Reply


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