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Investment property has been one of the safest and best performing investments for hundreds of years. The investment market has continually turned to property for numerous reasons.

The unshakable security of Bricks and Mortar has been the backbone of the investment industry. Through world wars, stock market crashes, high interest rates, worldwide economic crashes, property values have continued to increase consistently. In the light of the most recent tragic events in New York and the uncertainty of future world war breaking out the Stock Market lost more than 26 trillion dollars in the space of 1 week an yet the property market continues to grow stronger daily.

No matter our financial position or role in the workforce we all want to reduce the amount of tax that we pay. The Australian tax office offers tax deductions as on incentive to purchase property as an investment. These tax deductions will reduce the investor’s taxable income, which inturn can potentially give a tax rebate.

Property has always been an easily accessible investment to purchase due to the leveraging factor. Depending on a person’s income most banks will lend up to 85% of the property value. Being that property is regarded as one of the lowest risk investments it requires very little cash input to start. If a potential investor in fact has sufficient equity in another property, a lender will lend 110% of the second properties value. What this means is that an investor can purchase an investment property and borrow all of the cost required to purchase for absolutely No Capital Outlay!

Ultimately the number one reason that the majority of people purchase a property is the potential for capital growth. Unfortunately what most investors don’t understand that there are actually 5 key elements involved with an investment property, capital growth is only one of those elements

In purchasing an investment property you must consider

1. The Property Design

• The resale ability of the property
• The tax effectiveness of the investment
• Rental Return

1. The location of the property: It is the location that will determine how much capital growth the property will enjoy. Where you purchase will also affect how easily you will attract tenants.
2. Professional advice

An investor should always seek professional advice before they purchase any investment. The right advice should ensure that you are protected from the risks associated with the investment and to also maximise the tax effectiveness of the investment.

3. Finance and Insurance

Combining the right lender with the right style of loan product will determine how quickly you can create equity into the property. As your financial exposure increases, so does your need for the right insurance products to protect yourself

4. Property Management

It is crucial to understand that is the right combination of the 5 elements that will make the investment smoothly and effectively. The hardest thing about obtaining the right property, is understanding that everybody has a completely different situation both financially and emotionally so the combination of the 5 elements will be different for each individual.

The next step is finding a company that will tailor an investment property to you needs. It would almost be Too Good to Be True to find a company that will independently provide the correct product which is fair market value in the right location, provide accurate professional advice, combine the right loan product with the right lender and do all the property management on your behalf? Contact Patricia now to find out how you can purchase the right investment property, tailored to your situation.