Property as an investment option
At Wealth Enhancers, we feel any property investment needs to be carefully thought out and ideally related to one of your life goals because there are risks involved with the investment.
Thanks to society pressures, many people buy a property because they think it what they should do.
This can have a snowball effect – emotions take over, people take on too much debt and ultimately reduce their options in life as they become a slave to the mortgage.
With the pressure on to buy a property, for either living in or investment purposes, it often means that a property is the only major asset owned by an individual.
Having all your eggs in one basket can be risky – so WE strongly believe you should have a pool of emergency cash and a share portfolio to ensure your assets and wealth are diversified.
Alarmingly, many property investors think a property is ‘risk-free’ because of the perception that the property market always rises!
While this view of property is debatable – it is safe to say that there certainly are risks!!! Taking on too much debt or paying too much for an asset with limited growth potential are just a few.
Providing a property investment fits in with your goals there are a bunch of reasons why we like property as an investment option:
1. It provides an opportunity for strong capital growth over the long-term (+10 years);
2. As an asset, it can be used to build your wealth over the long-term;
3. It can provide rental income, contributing to loan repayments or supplementing living expenses;
4. It is tangible, offering some investors more comfort; and
5. You can live in it.
Saving the best til last – our favourite reason is that banks are willing to lend you 80% (and even more!) of the property value, at rates much lower than are available on other investment options.
Wanna talk property as an investment option? Our Financial Coaches LOVE helping members with their goals and working out how to attach money to them. To chat goals with one of the WE team, book in a time for a Free Strategy Session.
Disclaimer: Information contained within this article is of a general nature. Do not be rely upon it when making financial decisions. Please consult a professional financial advisor or planner (like us!) before acting.