Real estate investing: is it for you?

Many people, including residents of Brimbank, are considering investing in property in hopes of enriching their lives. Although there are many alternatives such as stocks, bonds and cash, real estate investing tends to be considered one of the safest and easiest options.

Real estate investing is not for everyone. If you are considering investing in real estate, it is essential to weigh the pros and cons.

BENEFITS

Capital growth

The value of your property will increase over time and can be extremely beneficial financially if chosen well. You will not only benefit from regular capital growth, but also from regular monthly rental returns.

A safe investment

It is the only investment market that is not dominated by investors, which creates a natural buffer in the market. It’s also the most forgiving investment; if you buy the worst house in the area, chances are its value will increase further over time.

Mitigate risk

You can insure your property against most risks; fire, damage, departure of a tenant, damage to your property or breach of lease.

Anyone can invest

You don’t need to have a large amount of knowledge like you can with stocks or opening a business.

Control

Unlike other investments, you have complete control over your real estate investment; you can make all the decisions and control all your declarations.

Fiscal advantages

Although tax advantages should not be used as a decision-making factor, it can be an advantage of investing in real estate. If your property is negatively oriented, it may offer tax benefits.

CONS

Liquidity

Although you can sell your property if the going gets tough, the process is not as quick as selling other investments such as stocks.

Hidden and recurring costs

In addition to the initial costs of investing in real estate (such as stamp duty, deposits, legal and transfer fees), you will need to consider the ongoing hidden costs of investing in real estate such as laying out the property, maintenance and repairs, construction and owner. insurance, property tax, water rates, municipal rates, etc. Other investments, such as stocks, do not incur as many ongoing charges.

Rent-free periods

During periods when you cannot find a tenant and the property is vacant, you will have to cover mortgage repayments.

bad tenants

Problematic tenants are every landlord’s nightmare. They can seriously damage your property, refuse to make payments, and sometimes even refuse to vacate the property. Some disputes can take months to resolve and become very stressful, especially if there is an emotional attachment to the property.

other costs

Although negative gearing may offer tax deductions, you will need to account for and budget for the shortfall between repayments and rental income, as well as the cost to cover repayments when the property is vacant.

Source: realestateview.com.au

About Vicki Davis

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