Equity

10 Reasons to Buy your First Investment Property

One. 2009 is a good time to buy for a cashed buyer – It’s 2009 and there is a global recession, there is no shortage of foreclosures, or mortgagee sales. Get hunting for bargains. As fewer people can afford to buy, as times are hard, there are more people looking to rent, which drives up rent.

Two. You can share the risk, and cost – You can make fairly small investments if you share with others, however your return will still be equal to your percentage of ownership, and the overall gain in value of the property.

Three. You are in control – The performance of any investment is not guaranteed, however, a bricks and mortar investment may provide you greater control than other assets.

Four. Capital growth – Investing your money in the bank will not make you any capital growth. It may hold it’s value and be safe, however when you take inflation into consideration, you stand to gain very little. However, with property investment, the value of your property will almost certainly increase over time. This capital growth becomes your profit.

Five. Taxation benefits – There are many tax benefits in owning property, and in some countries more than others. Benefits come in the form of claiming against depreciating buildings, or negative gearing your investment to claim back tax on other income.

Six. Property makes millionaires – More millionaires have been created through property than any other form of investment. Property millionaires’ have been created at a rate of more than 58,000 a year since 2001. By 2010, there will be around three quarter of a million millionaires through rises in property prices.

Seven – Anyone can do it – You don’t require any degree or training, however, I suggest doing a fair bit of reading and seeking advice.

Eight. Property Investments provide Security, Houses don’t go broke – You can still loose money in a property investment, particularly if you have a rental void, or if you have to make a short sale. However, when compared to the stock market, where you are investing companies, property seems secure.

Nine. You can buy it with someone else’s money – Property investment gives you the ability to leverage other people money, and profit from it. Sure the bank will charge to a nice interest rate to lend you money, however the best part is the banks don’t share in the capital growth of the property, this increased equity will be all yours.

Ten. You can add value – You can add value to your investment by renovating or refurbishing your properties. Ensure that you are not over investing in the wrong property though, some areas and markets have a ceiling price.

It’s a great time to invest in property if you have the money, just make sure you seek professional advice, and do some reading.