Is it worth owning rental property in Australia?
Among the most obvious choices available today is purchasing real estate in Australia rental property for tax deductions, especially in the capital cities. Real estate investment may be slower than crypto or stocks in terms of capital appreciation, but it is hard to find a better long-term investment option.
Australian mortgage brokers are well aware of the current interest rate environment; the industry has been wildly active over the past few months. The Reserve Bank of Australia is not likely to advance its schedule, so this trend is likely to continue.
Since the rate of appreciation in property values is unlikely to slow down anytime soon, brokers owe it to their clients to introduce them to opportunities to diversify their holdings and increase their long-term income when buying an investment property.
The real estate market’s potential for future expansion
Among the many options available to Australian investors, buying property consistently ranks high. Our market has reliably produced gains over time, and mortgage brokers see investors as being on par with first-time homebuyers in terms of value.
The success of a real estate investment hinges on three main factors: the availability of a reliable tenant to make monthly payments and generate rental income; the accumulation of equity in the property that can be used as leverage; and the possibility of treating real estate as a managed fund, allowing assets to sit and grow over time.
Lower Volatility than Stock Market
While owning a rental property may seem like more work than other investment options, it is actually a safer bet than the stock market. Finding a tenant who will pay rent regularly and take care of the property requires some initial effort, but the investment returns more than makeup for the minimal ongoing work involved in being a landlord.
Once you’ve got that figured out, though, it provides a more stable, long-term gain than the crypto, or other investments. Clients, and the mortgage brokers who have them on their trail books, have more to gain from property investment than from any other investment option.
Allowable tax write-offs
Clients may also benefit from the long-term tax breaks provided by the real estate market. From advertising expenses to corporate fees and charges, and even discounts on council rates, insurance premiums, and land taxes, landlords are eligible for a wide variety of tax breaks from the Australian Tax Office.
Putting money in for the long haul.
Australia’s real estate market presents a rare opportunity for capital appreciation. A property portfolio is one of the safest investments you can make due to the market’s long-term growth prospects.
Renting out property is a sound investment strategy that mortgage brokers should always advise their clients to pursue, whether they live in a bustling metropolis with a constant influx of young professionals and foreign students, or in a more rural area with low vacancy rates and reliable tenancy.
Safety and steadiness
Many would-be investors shy away from real estate because of the perception that it requires too much patience and can only be profitable over the long term with the maintenance costs and property management fees.
If you’re looking for an investment that will show clear capital growth, the property market is unrivalled. This is because rental yield, price growth, and interest rates are unlikely to ever be as interesting and eye-catching as cryptocurrency market fluctuations or shooting star stocks.
Enhancement of Determination Authority
Long-term investments in a real estate offer the investor the kind of control they crave. When home loans are compared to Bitcoin investors, who risk seeing their savings wiped out, homeowners can be as hands-on or hands-off as they like with their property, and they always retain full ownership.
More money can always be invested into a property to improve it and enable price growth, which can be achieved through either increased rents or a higher resale price.
Equitable Opportunity
When people say that it’s hard to get money out of real estate, you can counter the concept of equity. Selling a home in Australia can be a lengthy and difficult process, but the equity you build up can help you finance a new home or negotiate a better rate with your mortgage broker.
The time is now for Australians who own investment property to call their broker and discuss how best to capitalise on the historically low-interest rates and even lower vacancy rates.
Advancement of Capital
Capital growth, or an increase in a property’s value, is the primary goal of most real estate investors. The Australian real estate market has experienced all three of the cycles that the real estate market goes through periods of growth, stagnation, and fall.
Considered together, these facts make it crystal clear that real estate investments are best made with the long-term in mind, rather than the short-term goal of earning a quick profit.
Income from rent
Find out how much similar properties in the area are renting for on a monthly basis by conducting some research. You should think about whether the anticipated rent is sufficient to cover the costs of maintaining the property and still allow you to turn a profit.
By dividing the total annual rent by the purchase price, you can get an important number known as the yield of the property. This evaluation can be performed whenever convenient during the time you own the property. The yield is then expressed as a percentage by multiplying the number by 100.
If you bought a piece of real estate for $300,000 and are renting it out for $300 per week, which comes to $15,600 per year, the gross yield on that investment would be 5.2 percent per year.
As another illustration, let’s say you invested $600,000 in a piece of property and now rent it out for $600 a week. In comparison to other numbers, such as the yield on an investment in shares, this sum will stand out.
