Have you thought about how you will generate enough wealth to have a comfortable future and one day enjoy your retirement? Maybe even have enough left over to give your children an inheritance? Buying an investment property is an effective way to generate wealth for your future, hence the title “investment” – it is designed to be an asset which will eventually pay dividends if you get the right advice.
Maybe you’ve thought about buying an investment property but came up with a number of reasons why it wouldn’t work for you, i.e. not the right time, you’re not certain you can afford it, people have warned that it’s a bad idea or you’re worried it’s too big a risk. You’re not alone, lots of people consider buying an investment property, but only about 20 percent of Australians actually go ahead and buy one! Buying an investment property isn’t as scary as it sounds, you just need to seek the right advice and ensure you have appropriate insurances to cover your mortgage/s if you – or your partner, if you have one – lose the ability to earn an income.
There are three main ways to buy an investment property to assist you on the path to wealth creation. The right option depends on your circumstances and we recommend talking to one of our financial advisors in Geelong to determine what will work best for you.
- Save a deposit – this will be the best option if you don’t already own a property or have a self-managed super fund set up. You can buy property with a five percent deposit, but if it’s taking too long to save the amount you need you can buy property with other people such as family members, and split the costs and future returns. There are also other options available to help you make up the five percent, which we can discuss with you depending on your individual circumstances.
- Use the equity in your home – if you have already entered the property market it can be surprisingly simple to use the equity in your first home to help you purchase another. While the investment property will be tied to the equity in your home, there is no actual exchange of cash or savings. Often the only upfront costs you need to consider are to do with making your investment property rent-ready – does it just need a professional clean, cosmetic repairs or more expensive renovations? And can you afford to pay for these yourself or will the amount you borrow be enough to cover this?
- Buy one through your self-managed super fund (SMSF) – you can now invest in property using your SMSF. This method has potential tax benefits such as tax deductions, which of course are strictly monitored by the Australian Taxation Office (ATO). You will need advice specific to your situation.
No matter how you buy an investment property, it is a proven path to wealth creation which will benefit your financial future. We are based in Geelong, please contact us to discuss how we can help put you on this path with the right advice and loan products. To read more, please click the image above for the full PDF version.
