Buying an investment property can be an excellent financial decision, however you will need to secure the right out of investment loan. There are multiple mortgage calculators that you can have a look at to get an idea, however we will guide you in the right direction. Buying an investment property can be an excellent income earner and you are able to take advantage of tax benefits like negative gearing. If you are looking to buy an investment property speak to the investment home loan specialists in Shepparton. We will guide you through the process and choose the right loan for your financial situation.

Why purchase an investment property?

Often people look to buy investment properties to help secure their financial future. The investment is a tangible asset that can be leased and an income earned off the property. There are many tax benefits to owning investment property such as tax deductions. When you purchase property for an investment you can also potentially use the losses that arise from negative gearing as a tax deduction. Negative gearing is where the income from the investment is less than the expense, and this is what enable you to claim the deduction.

There is a lot of potential for long term returns as the value of the property increases over time. Owners can then use the equity in the property to purchase another investment and so on. Positive gearing is a long term goal which means that the income from the property is greater than the expenses and it can provide you with a very nice extra income.

Investment Home Loans Shepparton – Key benefits to buying investment property

There are multiple benefits to buying investment properties as mentioned above, but lets go into more detail. This will help you to decide if moving forward with investment home loans Shepparton and purchasing your new investment property. Having the team at PFP Wealth will help you get the right loan and guide you through the entire process from start to finish.

Capital Growth

Capital growth refers to the appreciation of the value of an asset over a period of time, which increases the owner’s personal wealth. When the investment property grows in value, the investor can then utilise the equity for personal use, like investing in another investment property.

Rental Income

Earning a solid rental income from your investment property is vital. Finding a property with high rental yields is very important. This income stream will help you to pay the mortgage repayments.

If the rental income does not cover all costs for your investment property and you have to pay out of your pocket, this is when the property is negatively geared.

What is Rental yield? Rental yield is the cash return (income) that you receive from leasing your investment property to a tenant. It is displayed as a percentage and can show gross or net yield.

Tax Benefits

Property expenses can be tax deductible, such as advertising to find tenants, fees paid on your investment loan and other maintenance costs. Investors can invest in property for tax benefits such as depreciation claims and can claim some depreciation on their taxable income such as the depreciation of the building and items that are considered plant and equipment, including hot water systems, air-conditionings units and curtains.

Tax benefits should not be the only factor for buying an investment property, as you may end up under performing.