Benefits of Property Investment
Achieving financial freedom is something that we all aspire to. It requires planning, education and receiving informative advice from professionals. There are many ways you can build wealth, however which is the right path for you?
Property investment, particularly in Australia, is a stable and secure source of building wealth. In a strong market, you will see steady capital growth and rental income. While acquisition costs are considerable, the long-term benefits far outweigh these. Building a balanced property portfolio allows you to reduce holding costs.
One of the many benefits of property investment is tax deductions. Some of the items that are tax deductable are:
- Interest on loan repayments
- Purchase costs
- Accounting fees
- Property Management fees
- Repairs or renovations
This is extremely beneficial as reduced taxes mean more available cashflow for further investments.
If you are a first-time investor, it may not be possible to purchase a property on your own either due to low deposit savings or insufficient income. However, there is an alternative way to enter the property market sooner and build your wealth – Property Syndication.
Property Syndication involves getting a group of individuals together (usually 2-5) to purchase a property for investment purposes. The finance, accounting, legal and property management aspects are arranged by a single company, which streamlines the process and makes it hassle-free for clients.
Property Syndication – the process
A summarised overview of the process is as follows:
- A property company brings together a group of individuals interested in purchasing an investment property.
- Legal structures and agreements are set up for all purchasers.
- A suitable property is sourced and finance is arranged.
- On settlement of the property, Property Management is set up.
- Ongoing property ownership activities are carried out, including book-keeping, accounting and annual reviews.
While partner services such as Accountants and Mortgage Brokers are used, the property group oversees the whole process to ensure everything goes as smoothly for you as possible.
As the value of the property grows, it increases your equity. When you are in a position to purchase a property of your own, or invest in other assets, you are able to sell your portion of the property, take the profit and use it as you see fit.
This is a fantastic way for people with lower borrowing capacity, new investors or people who want to diversify their property portfolio to enter the property market.
For more experienced investors, or people with the capacity to do more, Property Syndication allows you to invest in multiple properties in different markets to diversify your portfolio.
Is this something that may be suited to you? Find out more about this game changing way of building wealth and achieving financial freedom.