Is Investing In Property A Good Idea To Build Wealth?

Investing in property is often about so much more than simply putting a roof over your head – but can this method help buyers to build wealth and get ahead?

Once you’ve managed to successfully purchase your first home,  there usually comes a point where Aussies start looking at other avenues to increase their income. Suddenly, property becomes less of an obligation and pressure point, and begins to become an appealing option in terms of increasing the bottom line of your bank account every week. 

However, investing in property isn’t for everyone, and often boils down to your own individual circumstances. As it generally involves large sums of money, it’s important to do your research if you’re considering this avenue as a way to build wealth. The good news is that the more educated you are about the property market, the higher your chances of success are when it comes to using this tactic to get ahead – but where do you start? 

The Pro’s And Con’s Of Investing In Property 

Some people enjoy dabbling in the stock market, and others in cryptocurrencies. However, many Australians view investing in property as a “safer” option, with less exposure to potential risks. While this may be true for some, knowledge is power if you wish to give your investment the best possible shot at success. 

Pro: Straightforward – Technically speaking, anyone can start investing in property without a degree or extensive experience. Providing that you’ve taken the time to speak to a financial adviser, mortgage broker or real estate agent, buying property is relatively simple. 

Pro: Less Risk – Property can be less volatile than shares or other investment opportunities. Pricing fluctuation is less likely to affect you, particularly if you have tenants committed for six or twelve months at a fixed price or rental amount. 

Pro: Capital Growth – At the same time, your property could be passively generating wealth for you in the form of capital growth. You can tap into this equity by using it to finance another investment property, or when you sell the property and release the capital gain.  

Pro: Tax Benefits –  Investing in property means that buyers can take advantage of strategies like negative gearing to minimise their tax bills, via offsetting property expenses against any rental income. It’s a long game, but can save buyers thousands over a number of years. 

Cost: Illiquid Asset – Liquid assets like stocks, bonds or shares can be quickly offloaded in the event that you’re short on cash. Investing in property? Not so much, as this can take months – or even years – to sell. While you can see and touch your asset, it’s often not easy to “move”. 

Cost: Reliance On Tenants – Relying on other people isn’t always the best strategy when it comes to profiting from your hard earned cash, but the reality of investing in property is that tenant occupation is crucial in order to cover your ongoing costs. 

Cost: Maintenance – As a landlord, it’s your responsibility to ensure that the property is in working order for any tenants that you may have living in the home. It’s also important not to forget about other ongoing costs such as rates, insurance and other maintenance obligations. 

Cost: Loan To Value Ratio –  If the property value goes down you could end up owing more than the property is worth. It’s for this reason that it’s considered to be hugely important to do your research before buying a property if you hope to eventually turn a profit. 

Sourcing Further Advice On Investing In Property

If you are ready to “level up” and get financially fit, then it’s never too early to seek professional financial advice. Whether your next goal is to retire early, take a gap year, or purchase your first investment property, George Samios and the team at Madd Life are ready and waiting. 

With their entire business built on referrals, the team at Madd Loans have taken the mortgage broking industry by storm. Their overwhelmingly positive feedback has helped them to take out numerous industry awards, including the title of “Queensland’s Broker Of The Year” for four consecutive years. However, after working with a broad variety of clients in regards to their mortgage options, it made sense for the team at Madd to have the capacity to offer a full financial planning service.

If thinking about your financial future strikes a chord with you, then it might be time to speak to a professional. Whether you’re chasing mortgage solutions or a financial fairy godmother, the team at Madd work together as a collective to turn your goals into reality.

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