Investing in residential property is very popular with Australians as overall the Australian property market has proven to be a stable and has generated consisted growth since market has first been measured. 

A good choice in an investment property can:

  • Be beneficial with savings in taxation
  • Provide regular rental returns
  • Generate long term capital growth

You could become a property investor relatively easily and there are a wide range of funding options available specifically for this scenario. As a current property owner, you may even have the opportunity to use your existing home equity to help fund your investment and eliminate expenses such as Lenders Mortgage Insurance. 

Negative Gearing & Capital Gains

A potentially huge benefit for investing in property is negative gearing. Simply put, to negatively gear a property means that any loss from the investment property can be offset (or deducted) against your income. This can mean that you pay less tax and can pay less interest on your loan.

There are also long term benefits that can be gained by holding onto your investment, such as paying a highly reduced rate in capital gains tax for any property that you hold for over a period of 12 months. 

There are quite a few options with investing in property and you should always consult a professional tax consultant for the right tax strategy that suits your current and future individual needs. 

Other Considerations

Finding the right property for the right price is the first consideration, however, other considerations include:

  • Initial purchasing costs (e.g. legal fees, stamp duty, loan application, solicitor fees, pre-purchase inspections etc)
  • Impact on your cash flow, budget and overall disposable income 
  • Ongoing and maintenance fees (e.g. insurance, land tax, rates, tradesmen for repairs, property management fees etc)

The above fees can all be deducted from your tax, however, it is imperative to be aware of all potential fees to ensure that you make the best decisions when planning for the purchase of your investment property. 

At Achieve Finance we will help guide you through this process and have your best interests top of mind. Should you have difficulty in finding the right team, we have trusted partners that could help with your personal circumstances.