buy an investment property
We often get asked if property is a “good” investment. Our advisers will generally respond with “compared to what?”
Buying an investment property may be a good way to diversify your investments, but all investments need to serve a purpose. This could be things like generating an income stream over time or a way to help you grow your wealth.
Things to consider
Who is this home for? Your family? Or an investment? If the property is purchased as a home, then affordability is usually the big decision here. The right piece of real estate will always be a good investment. But not at any stage of life and not at any cost.
- It’s often perceived as a “safe investment”
- Land and property values often increase over time
- Sometimes the income stream created from an investment property can be strong,
- When interest rates are low, the income can cover a lot of a loan
- The borrowings can provide some tax deductions
- Purchasing property is expensive
- You will most likely need to borrow money
- Is it affordable? Don’t forget stamp duty, rates, land tax, loan repayments, maintenance costs etc
- Illiquidity needs to be considered
Don’t make an emotional decision when purchasing property and don’t overpay. Property may be a great investment but make sure the time is right for you.
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