Long term investment property strategies
Investing in residential properties is a popular long term investment strategy and can be a rewarding experience. Like property, investors can vary from the seasoned property investor, first timers to the sporadic investor. So what are some investment strategies does an investor need to know?
Some popular investment strategies include:
Houses vs Units
Houses can be easily renovated and redeveloped, further increasing the house values. Alternatively, units are popular among the younger generation of investors and buyers, but there are strata fees and numerous building restrictions.
Cash vs Growth
Properties with a cash flow tend to have a low capital growth profile and high rental returns and growth properties are the reversal. Surplus cash flow can assist investors to repay their mortgage loan quicker, there are tax implications. Growth properties however, carry tax benefits such as negative gearing – but investors should keep in mind that capital growth is not ensured every year.
Local vs Distant
Many investors choose properties in residential areas that they are familiar with and have witnessed these areas grow in value, but there has been a trend towards investors looking interstate. Advantages of investing locally is the ease to monitor the property, appearance and maintenance duties.
New property vs Old property
With new properties there are more tax incentives which includes better depreciation compared to older properties. Also, there is usually less maintenance involved. However, older properties may perform much better long term and can be less affected by over supply with surges in new building activities.
Investing in property is a risk, so it is always best to seek professional advice to answer all your queries and discuss your situation.
There are many aspects to be considered in regards to property investment such as claiming expenses and other tax considerations and obligations. Here at The Quinn Group, our team of experienced tax accountants and lawyers can assist you with on getting the most out of your investment property and legally minimising your tax by submitting an online enquiry or calling us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.