- Posted By Rebecca Bell
Affordable airfares between Perth and Broome along with several multimillion dollar projects are welcome news for our town, particularly the prosperity of the Real Estate market. Now is a great time to reflect on your existing property portfolio and your goals for the future or take the plunge to own your own home while prices remain affordable.
Why should you consider an investment in property?
There are some good reasons to invest in property, particularly now in Broome with several multimillion-dollar projects lining up in the Kimberley, set to generate hundreds of new jobs and bolster flat economies in Broome and Derby. Property is:
• A solid, long-term investment
• Property investment can reasonably be expected to provide capital growth in the long term
• Property market information is easily accessible and easily understood
• Property is tangible - you can actually see and monitor your investment
You should carefully consider your current and future living expenses so you’ll be assured you can repay your loan and maintain the quality of lifestyle you’ll require. Similarly if you currently renting it’s a good idea to consider how much this may be costing you and for an extra $100 a week you may be in the position to be paying off your own mortgage instead of somebody else’s.
What is Negative Gearing?
Put simply, if you are using the property for investment purposes and the outgoings exceed the incoming rent on the property it may be an opportunity to gain tax advantages. If you are a PAYE taxpayer, you may not have to wait for the tax adjustments as you may be eligible for a tax reduction. Nonetheless, negative gearing is not for everyone because there are risks. Property values may decline from time to time, the flow of rental income may be interrupted, interest rates may rise or your ability to finance the cost of borrowings may suffer. Investors need to take into account their ability or willingness to deal with these risks and discuss them with their adviser before negatively gearing an investment property. If your circumstances dictate, it is also possible to buy an investment property which is positively geared - meaning that you earn income in excess of the cost of owning the property. For advice on gearing, or your financial and tax circumstances, consult your accountant or financial adviser.
Property investment benefits?
A well-chosen property can provide a good, steady return on investment which, over time, improves along with the property’s value. The income from good, reliable tenants will assist you to increase equity in your property. With the assistance of a good real estate agent, the management of the investment from the landlord’s point of view is relatively easy and little time is required. To be successful in property investment, your goal should be to increase the property’s value and rental return in the long term.
Most first time investors choose to invest in residential property. It is more familiar and, therefore, easier to understand than the share market. We all expect our investment property to grow in value. Therefore, a choice needs to be made on two important criteria: location and quality. Keep in mind that this is not a property that you will be living in so always look at the property through the eyes of a potential tenant. The property needs to be desirable and of a size that suits the area’s potential tenants. The property should be attractive and as low-maintenance as possible. First National Real Estate agents are experienced in investment property advice. You’ll find them happy to discuss your goals and assist you to find the right solutions.
Contact our team on (08) 9192 2000 or click here to email for more information.
Alternatively click here for a full list of properties currently for sale.