Why property investing - The first question that might come up to your mind is: Why property investing? Why should I bother with it? Why don't I just get a new house to live in? These are the questions that may arise when you first hear about doing property investment.
These are valid questions and here are some thoughts to ponder on the question "Why property investing?"
Why Property Investing?
- Property investing - Tax benefit
The obvious one is probably the tax benefit. If you are doing property investment, you get a great tax benefit. In Australia, your taxable income will decrease as whatever expense you have to pay on that month will be deducted first from the gross income, and then taxed.
This means that your taxable income goes down.
- You don't have to pay for the principal or mortgage
Doing property investment means you can choose to just pay for the interest on your loan. Note that this can only be done for a certain period of time. For example, I was given 10 years by my bank for an interest-only loan.
This means you have more money to spend on something else per month, if you are on a tight budget.
- Better than putting your money on the term deposit or online saver account
Property investment, when done right (as in, you pick the location correctly) worth much more than putting your money on an online saver or term deposit account. Land's value is always (or most likely) increasing per year. Sometimes on a really good developing location, a land can increase its value up to $100,000 (I'm serious about this as a friend of mine experienced this).
- Stepping stone to buy your dream house
I don't have a massive salary or a massive saving. As such, I bought a cheap land and house package a few years ago. I'm thinking to sell it later in a few years ahead perhaps to buy my own house to live in. Or maybe use my property investment house as a deposit for the next house, we'll see!
