5 Amazing Benefits Of An Investment Property
The 5 amazing benefits of an investment property that I talk about in this article will lead you towards financial freedom and success. Investing in property is one of the best decisions you will ever make, and the sooner you make the decision to invest the greater the benefits will be to you.
We live in an uncertain world; nobody really knows what tomorrow brings. And life doesn’t get easier, the cost of living increases each year, lifestyle trends change, and our economy fluctuates. For these obvious reasons, many people are trying as hard as they can to get some sort of security in life by working hard, and investing.
Investing your money today in assets, such as real estate is a great way to prepare yourself and your family for the unexpected that the future brings.
When you face sudden unemployment, disability and other financial emergencies, an investment property could help you stay afloat. It can provide you with money to pay debts, medical needs, and everyday expenses. However, investing in property is just like paying insurance…you need to do it before you need it.
Many families and savvy investors are now securing their future through property investment. Real estate investments are great because they have the ability to not only deliver strong capital growth but they can also deliver monthly positive cash flow. Even in the midst of the GFC property has remained a strong performer and there is a lot of money to be made.
Property is seen by the banks and many investors to be a much more stable investment than stocks and paper assets. It is less prone to large market fluctuations and can even continue to deliver you positive cash flow returns even when the market is in a downturn. Without question, property can be one of the best long-term investments for families, individuals, and even businesses.
Whatever your financial capacity is, I’m sure you can find an investment property perfect for your budget. It’s almost impossible to not find anything in Australia’s diverse real estate market; there’s always something, whether you’re looking to buy a block of units, vacation houses that could be rented to tourists or just a lone unit for starters.
The majority of the richest people in the world either made their fortune in property, or hold a large portion of their wealth in property. That has to tell you something about the benefits investment property delivers.
The 5 Amazing Benefits of Investment Property
1. Future Financial Security
One thing we often fail to think about when we are younger is our future financial security, which becomes EXTREMELY important down the track. Property gives you the opportunity to prepare for your future and actually set yourself up to be in an amazing financial position.
We now know that we cannot trust any company to take care of us after we retire, and with the fluctuations we have seen in the stock market recently we also know we can’t really rely on our super fund either. Taking your financial future into your own hands with an investment property portfolio is an important step to take.
Property gives you:
- Potential capital growth
- Immediate return on your investment through positive cash flow
2. Passive Income To Fund Your Lifestyle
When you invest in positive cash flow property you can begin receiving money almost immediately. The funds you receive from the rentals can be used to pay the house loan and the excess could be used for other expenses – or to beef up your retirement funds.
No matter how big or small your property investment is, any form of passive income is better than no passive income. Because rents tend to increase over time, but your main expense (your mortgage) doesn’t change in value, it is a strong possibility that you cash flow will constantly improve as time goes on. The more rent you receive the higher your passive income.
If you invest in positive cash flow property then the property itself earns money even without you doing anything. Why invest in only one positive cash flow property? If a little bit of passive income is good then wouldn’t a large amount of passive income be even better?
This passive income can be used to pay down your loan, invest in more properties or can be drawn out to fund part or all of your lifestyle. The ultimate goal for many investors is to be in a financial position where you don’t have to work anymore and your properties can completely fund your lifestyle. What a massive benefit that would be to your life!
3. Ability To Leverage One Investment Property To Buy More
The hardest part about investing in property is buying the first one. However the benefits come quickly after buying that first one, because you can use the growth in your first investment property to fund the down payment on your next investment.
‘Equity’ is a term that refers to the untapped value in your property (value that you haven’t secured a loan against). As your property goes up in value your equity also goes up. You can then draw on this equity to fund the down payments on future investment properties.
This means you don’t have to eat canned beans for a year to save another deposit. The benefit is that you can let your first investment help you buy your second one.
4. A House To Live In If You Need It
Having a property investment gives you an alternate place to live in, should you need one in the future. In the case of a retirement, many couples decide to move in to their property which is often a simpler, smaller house situated in a more quiet place.
5. Someone Else Buys An Asset For You
This is one of the things I LOVE LOVE LOVE about property, someone else actually buys the house for you.
You might put a down payment on the property (usually 5-20%) and the bank lends you the rest of the money. You then rent the property out and use the rental income to pay the interest on your mortgage and other expenses. When there is extra money left over you can put it onto your mortgage.
Over time as rents increases the payments you can make on your mortgage can also increase. Eventually you will have used someone else’s money to pay of the bank and buy the property FOR YOU. If that isn’t a phenomenal benefit of an investment property then I’ll be damned!
As you can see there are many amazing benefits to investing in property. With the right advice and enough dedication you can build a portfolio that brings you the success you desire.