A common question for Real Estate Agents what are the tax benefits of being a property investor.
We have sourced 10 tips that could help answer your property investor questions!
Tip #1 - Tax benefits of
investment properties – a number of deductions can be claimed
on your tax return, such as interest paid on the loan, repairs and maintenance,
rates and taxes, insurance, agent's fees, travel to and from the property to
facilitate repairs, and buildings depreciation. *Propertytutors.com
Tip #2 - Investment
Properties can be negatively geared – tax deductions can also
be claimed as a result of negative
gearing, where the costs of keeping the investment property exceed
the income gained from it. *Propertytutors.com
Tip #3 - There
are many benefits from having an investment property when deciding to take out
another loan or invest in something else. Showing your potential lender that
you have the ability to maintain a loan without defaulting will be highly
regarded. The property can also be useful as security when taking out another
home, car or personal loan.
Tip #4 - On
top of other tax deductions, the government also allows you to depreciate
the purchase price of your investment property based on a set depreciation
schedule, even if your property is actually appreciating in value.
Tip #5 - Property
investment can be less volatile than shares or other investments.
Tip #6 - When
looking for investment properties look for areas where high growth is
expected, in other words where there is potential for capital
gains. Property experts regularly provide tips on up and coming
suburbs, just make sure you are aware of any biases they may have.
Tip #7 - When
looking for a investment property look for a property that will attract more
than one segment of the rental market such as singles, couples, young families
or retirees
Tip #8 - When
purchased with long term plans, property can be invested in and forgotten
about, especially when it is a piece of land in an upcoming area. This is not
possible in other investments.
Tip #9 - Property investments
are protected from fraud and cheating- this is due to their
highly visible state and it is not just an asset on paper. *Propertytutors.com
Tip #10 - A forced savings
investment- Buying property through mortgage, makes even the
biggest spendthrifts save forcibly since they cannot afford to miss a mortgage payment.
*Propertytutors.com
