Whether you want to build a nest egg for retirement or build wealth to live on today, one of the best ways to do so is through owning investment properties. With housing always in demand in Australia, especially in the cities, there are usually no shortage of tenants for houses and apartments. Here are three advantages of buying investment property.
There are several ways that you can use an investment property to reduce your tax liability. You can leverage the investment by offsetting the interest on the loan you took out to buy the property, if it was financed. Also, you can deduct most of the property’s expenses against the rental income.
Some of the expenses that can be deducted on your taxes include:
- Bank charges
- Depreciation of fixtures and fittings
- Advertising expenses to find tenants
- Agent fees and commissions
- Cleaning and gardening expenses
- Building expenses
There are many deductions that you can take on your taxes while the property is available for let. However, you should consult a tax preparer or your tax accountant before taking any deductions on your income taxes.
Help Finding Property
When you decide to invest in properties, you don’t need to try to find houses or apartments worth buying yourself. It is important to find the right property in the right location for the investment to make money. If you don’t have experience in real estate, you can easily end up with a property that costs you more money than you’re making.
Fortunately, there are companies that will find the best investment properties for you. Companies such as Cashflow Capital property advisors find houses in the type of neighbourhoods in which people want to live and they provide advice for those investing in them. Most of the properties they find are near schools, shopping, and other conveniences that families want close to them.
Hire Property Managers
When you buy an investment property, you need to decide whether to act as the landlord or hire a property management company to manage it. You’ll have many responsibilities as a landlord, such as:
- Advertising for tenants
- Cleaning and painting the property to prepare for new tenants
- Collect the rent
- Make repairs as requested
- Go to court if an eviction is necessary
If you don’t want the day-to-day hassles of being a landlord, you can hire a property management company to do some of the work for you. They will do everything a landlord should do, such as collecting rents and making repairs. They get paid by taking out their fees from the rents they collect, they put your money into an account, and they provide you with reports every month about your properties.
Buying an investment property can be a great way to set aside money, especially with help from an experienced property investment company.