Pros and cons of property investment

Investors looking for ways to expand their portfolio and find steady income streams continue to turn to property to accomplish these goals. Unlike other forms of investment which can be volatile, property is relatively safe. In fact, property prices in Australia continue to increase and are now drawing interest from both domestic investors as well as ones from abroad.

Before investing in any type of property, it is important to have it valued by an independent assessor. Certified property valuers in Perth are able to accurately determine what a property is worth. This is vital since the assessment is accepted by government agencies as well as sellers meaning it will be easier to pay mandated taxes and come to an agreement on a purchase price. Before making a property investment, be sure to consider these pros and cons.

Pros

1.) Australia property values are skyrocketing meaning a property purchased today could see a significant increase in value five years from now. While Sydney and Melbourne have been Australia’s most popular property markets, some experts believe it is only a matter of time before some of Australia’s secondary markets including Perth start trending upwards.

2.) A property investment generates passive income that allows its owner to benefit immediately. Rental income allows the property investor to benefit in two ways. Money is earned in the short term while the property increases in value over the long term allowing for a profitable future sale.

3.) As mentioned above, property is a steady investment that isn’t prone to volatility. More and more investors are taking money out of the stock market and putting it into property for this very reason. More importantly, property offers better yields than other forms of steady investment such as bonds which accumulate slow gains over decades.

Cons

1.) There is a risk involved with property and there is no such thing as a sure bet. While property investment is stable, it is by no means foolproof. It can be hard to predict just how much a property’s value will increase over time and the actual gains may be minimal if market conditions stagnate.

2.) One of the biggest factors that dissuades investors from buying property is the amount of taxes involved. When purchasing a property, there will be a stamp duty tax which must be paid by the buyer. In addition to this, an investor will also have to pay capital gains taxes after it has been sold.

3.) In order to profit, an investor must find someone to rent the property or purchase it. This is by no means easy and some properties can sit for months or even years depending on the market. Finding a renter also means that a rental agency will need to be hired in order to handle issues residents might have.

Before purchasing an investment property, be sure to contact Direct Property Valuations for an independent assessment of the property’s worth. This will ensure the entire buying process goes smoothly.

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