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Why Investing in Property is Worth Your While

Thursday June 20, 2019 ● By Joe La Spina // Place Estate Agents

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Deciding where to invest your money is a big deal, and often an overwhelming decision. If you haven't considered real estate, then you may want to read on.

Like weighing many of the decisions we make in life, there are always pros and cons. However, what we often find is that there’re usually more pros or cons to these decisions, which helps inform us appropriately. It’s a daunting one to take on, because its your money; you earned it, so of course you want the best outcome. So, where should you put your hard-earned money? Well, we’ve done the heavy lifting, and choosing property may just surprise you.

It's a safe bet

While you can never guarantee an investment on anything, the property market is usually a very safe bet, especially in Brisbane at this time. The Brisbane property market has been slow and steady, with dwelling prices rising 0.3% for the year to November, and 0.1% over the past three months according to Corelogic. However, the property market is of course, a fluctuating one; if you're not in it for the relatively long haul, you may want to keep exploring your options. With this in mind, good things come to those who wait. Take 95 Thynne Avenue in Norman Park for example - in 2004, the property was purchased for $435,000. Fast-forward 13 years, the property was valued at $530,000 in 2017¹. That's a profit just shy of $100,000 straight into your pocket. This is only one property example, in a pool of thousands out there in Brisbane's exceedingly strong market.

95 Thynne Avenue in Norman Park Queensland

 

With major projects such as the Howard Street Wharves and Brisbane Quarter precinct near completion and already buzzing in local popularity, the market is off to a ravishing start for 2019. What’s more is that Brisbane is still yet to usher in a few other major city developments like the Queens Wharf overhaul, and Metro train network which bridges the transport gap for inner-city commuting. If you’re still not convinced, Brisbane has also been named Australia’s interstate migration capital, meaning that more people than ever are fleeing from property decline elsewhere, to take advantage of this overwhelming growth.

Brisbane's Queens Wharf Development

 

Compared to the share market, property is almost a guaranteed investment. Although shares have marginally higher capital growth, it all comes down to the risk — and the difference is huge. The risk is measured in variation in returns and capital growth (or loss) on shares can range from +40% in a year to -40% in a week! You don't get that sort of variation in property, hence why it is considered a safer investment.

You're in control

It’s plain, and simple — you’re in the driver’s seat when putting your trust in property. You have a wealth of resources at your disposal aid your research when looking at where to buy, and the time to buy or sell. Whether you keep a close eye on a particular area online to compare similar properties, or attend local auctions to see what the market looks like in realtime, under different selling conditions. There are also people out there who want to work for you — real estate agents. Agents live and breathe property, and often specialise in particular areas all around the city. Getting in touch with the industry professionals will put you a mile ahead with informing your decision, and it won’t cost you a thing.

People receiving keys to their property asset

 

Another way that you are in control, is the fact that once your property has settled, no one else owns that asset but you. That’s a hugely powerful thing, as it means that you can influence both the asset’s worth (by adding value such as renovating or landscaping) and the cash flow (by raising the rent for example) directly – something that’s nigh-on impossible to do with shares in a company.

Tax, tax and... less tax

Not only does a significant investment it the property market improve your financial know-how through learning about saving for deposits, working with numbers and managing your money correctly, it also presents multiple tax benefits. It would be a remiss not to mention negative gearing; the tax office allows you to write off investment expenses against tax, thus lowering your income and your tax bill and offsetting any shortfall between rental income and holding costs either partially, or in full. While it may seem a bit complex and overwhelming, this makes the process far more worthwhile and affordable for the everyday Australian.

People saving on tax deductible assets

 

On top of negative gearing, property investors alike can also enjoy the benefits derived from depreciation; the decline in value of the actual property, fixtures and fittings over several years or so. Dependant on the property’s age and renovation status, this can run into thousands of dollars every years – and can be the difference between a property being negatively geared and paying for itself. And, you guessed it, this is a deduction and can be claimable. If that’s not enough, the profit you make from selling your own home is all yours — you won’t suffer from the capital gains tax. When selling an investment property, you’ll only have to pay half of the profit’s worth in this tax. Who knew tax could be a good thing?

If these weren’t enough to convince you, we’ve only just scraped the surface on the benefits you’ll experience when investing in property. However, as mentioned, it’s important to consider the flip-side. Everyone is different, and not everything is straightforward — that’s where we come in. Place Estate Agents hire only industry professionals, who are experts in their field. We are here to help, and give you the full picture of what investing your money in property can really do for you.

References:

1. https://www.corelogic.com.au

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