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.

Ad V5

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.

icon-podcast-large

Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.

icon-email-large

Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


Avatar for Property Update

About

Brett Warren is Director of Metropole Properties Brisbane and uses his 13 plus years property investment experience to advise clients how to grow, protect and pass on their build their wealth through property. Visit: www.brisbanebuyersagent.com.au


'5 reasons why you should invest in real estate' have 9 comments

  1. Avatar for Property Update

    January 19, 2019 David

    We all know that the Sydney and Melbourne markets are coming off their peaks and likely to fall further before levelling out. So should we wait or look elsewhere?
    Also, what effect do you think the Opal Tower fiasco has had on the confidence of high rise apartment buyers in general?

    Reply

    • Avatar for Property Update

      January 19, 2019 Michael Yardney

      David – The Opal Tower issue will be a further mail in the coffin of off the plan as investors further realise these are not ( and never were) good investments.
      Should you wait or look elsewhere – well that depends on your budget and where your current investments are located – I take a long term view so I’m investing further – taking advantage of the current market knowing when I look back in 5 years time I will have done well investing in the powerhouse states of Australia

      Reply

  2. Avatar for Property Update

    January 19, 2019 THIAM SIEW TAN

    Dear Michael,

    Is real estate investment better than stock market investment?
    It maybe a yes, but what is the risk compared to country’s stock market index.

    From the past newsletter that I have read, you mentioned only less than 5% of properties can make money. This means the risk is 95% for investment properties.

    But if it is invested in index fund like s&p500, I believe the risk is much much lesser than 95%.

    Compare with the return on property investment vs return on index fund, we can find the risk : return ratio.

    Property :
    Risk : 95%
    Return : ??

    Index Fund
    Risk : ?
    Return : ?

    Thanks and Regards
    Ronald

    Reply

  3. Avatar for Property Update

    March 3, 2018 Pavan

    Hi BRETT WARREN,
    Good post.
    I think lots of exposure in the real estate industry and skilled real estate agent’s help is necessary to invest in real estate. If you go through this, definitely, you will beat the stock market.

    Reply

  4. Avatar for Property Update

    November 23, 2015 mavinrealestate

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

    Reply

  5. Avatar for Property Update

    November 16, 2015 IRENE

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

    Reply

    • Avatar for Property Update

      November 16, 2015 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

  6. Avatar for Property Update

    March 7, 2012 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

  7. Avatar for Property Update

    March 7, 2012 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


Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*


facebook
twitter
google
0
linkedin
0
email
Michael's Daily Insights

Join Michael Yardney's inner circle of daily subscribers.

NOTE: this daily service is a different subscription to our weekly newsletter so...

REGISTER NOW

Subscribe!