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.
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.
Property allows me to use other people money to leverage my funds and purchase larger investments.
3. Tax benefits
- Also read:Here’s how to avoid these 12 common reasons property investors fail to build a Multi Million Dollar Property Portfolio
- Also read:Heat comes out of the housing market as values across Melbourne dip and Sydney slows | Corelogic Home Value Index
- Also read:Latest property price forecasts for 2024 revealed. What’s ahead in our housing markets in the next year or two?
- Also read:Sydney property market forecast for 2024
- Also read:Home Price Growth Still Strong Over November | Latest Housing Market Stats
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.
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.