All of us dream to be successful. We can achieve our goals if we know how to invest our hard-earned money wisely. Some people invest it in stocks while others in a bank term deposit. It all depends on your risk appetite. If you ask us, we recommend real estate.

Real estate has great potential in achieving a good Return on Investment (ROI). This type of investment is not just for the wealthy but it is for everyone. 

What are some of the benefits of Investing in real estate? 

  1. Less volatile than stocks.
  2. You earn rental income if the property is tenanted as well as capital growth.
  3. A home is something everyone needs, there is always a market for it
  4. You are eligible for tax deductions.
  5. It is a tangible type of investment.
  6. Does not require any specialised knowledge to invest or no rocket science needed. 

What’s in it for property investors?

Most investors believe that real estate offers the security of “bricks and mortar” and it is one of the safest and potentially profitable types of investments in Australia. The real estate value appreciates over time whereas blue chip stocks or companies can be at a loss or gain anytime. Most banks recognise real estate properties as safe. Have you ever wondered why they can lend you up to 80% (and higher!) of the property value? This is because the property is a very safe investment and values usually do not fall over the long term.

According to Corelogic, the number of residential properties in Australia is estimated at around 10.6 million with a total value of $8.4 trillion. Around 70% are owner-occupiers, these are people who own homes and pay off their own homes. The other 30% are investors.

As property prices are increasing, more people are considering renting rather than owning their homes. In addition, the government has limitations in providing public housing for everyone. This is a good income source for landlords because renting a residential property will stay in strong demand.

What are some investment options for first home buyers?

Many first home buyers consider investing in a property before buying their first home (rentvesting). One of the reasons is the cost of buying a home where they live vs. where they can afford it. Property investment can yield greater returns than other types of investments as long as it is done correctly.

There are many different borrowing options for first home buyers. You can borrow up to 105% of the property value with a guarantor loan or up to 95% of the property value without a guarantor. If you belong to certain preferred industries such as doctors, lawyers, accountants, and sports professionals, you might be able to borrow up to 90% of the property value without LMI.

When real estate prices increase in value, you don’t need to sell the property to access funds. You can add value to your property by doing renovations or adding a granny flat. 

Are you already a property investor and wondering what to do with your existing mortgage? We have various refinance options for investors. Book a free consultation with our mortgage broker today.