InvestingIn our opinion, well located, actively managed investment property is one of the best investments for everyday investors. With an attractive combination of solid capital growth, regular income and generous tax breaks, it's a simple investment that most people can understand. With a little effort and know how, you can convert a modest deposit into a sizeable nest egg.
The Power of Leverage - The basic principle of leverage is borrowing money to buy an appreciating asset. If the value of the asset increases faster than the amount you repay, your wealth increases. Leverage is a way to increase your gains by investing with borrowed funds. The reason why property is so attractive to investors is because it has better leverage than almost all other types of investment. Most lenders prefer financing property as opposed to other investments because its less risky, it's tangible, prices don't fluctuate wildly and it's easy to value.
Adding Value - Property is one of the few investments you can potentially add value to quite easily. Jay from our office purchased a set of near derelict flats in Denman, with a couple of mates and tradespeople over a couple of weekends he has transformed these derelict flats into sought after serviced accommodation.
There are literally hundreds of ways to add value to a property many of which only cost a small amount of money. You can paint, put in some paving, renovate the kitchen, landscape the garden, tidy up the bathroom or polish the floorboards. The list is almost endless of things you can do to upgrade a property.
Accessing Your Profits - You don't have to sell your property to access your profit, you can simply refinance. You can get a new valuation of the property and borrow more funds using the increased equity as security.
Exceptional Tax Advantages - Property offers excellent tax advantages through negative gearing, which allows you to offset any losses against your other income. Always get advice from an accountant to maximise the tax benefits of your property investments. The amount that you might pay a tax expert should be recouped many times over the amount of tax that they save you.