If you are seeking a place to invest in real estate, consider buying properties at home in Australia. Indeed, there are many benefits to buying in that part of the world. According to the Jalin Realty website, if you choose to buy homes in Australia for investment purposes, you are selecting in an economically sound environment, with an unemployment rate that is at a 33-year low. In fact, the country has enjoyed 16 consecutive years of positive economic growth, averaging 3.7 percent pa. That means that because of the ability of jobs, you have access to tenants that pay their rent on time, which, in turn, helps your wallet. In addition to its great number of individuals employed, which makes it easier to rent to Australians, there are a number of other advantages for owning rental properties in Australia.
Benefits to Real Estate Investing in Australia:
1) Stability
If you choose to invest in Australian properties, you are tapping into a market that has grown at an average of 11 percent per year, at a rate comparable to that of the market share since the years prior to the Great Depression, according to the the YourInvestmentPropertyMagazine website. This indicates that the Australian economy is quite resilient, profiting even in the face of wars, disasters, recessions and other such crises. This makes any Australian real estate investment you make a safe one.
2) Easier Financing
It’s easier in Australia to obtain financing, because here they are more likely to lend money for residential properties than any other investment class. They will lend up at a higher proportion (95 percent). Additionally, the interest rates tend to be low. The Aussie Move website graphed the interest rates since 2005, showing that since that time, rates have never risen above 8 percent. Most notably, the graph demonstrates that the during the global financial crisis of late 2008, the policy came down rapidly to a low of 3 percent in April of 2009. Even during such financial turmoil worldwide, the Australian economy remained strong; the interest rate crept up to only 4.75 percent during those years. But by November 2011, economic growth had decelerated, causing the interest rate to fall to 2 percent, staying at that level for 15 months. Moreover, more cuts are projected for 2015, as the Aussie Move website points out. Because of this, lenders feel more confident in financing people wishing to invest in real estate. They can lend at a lower rate, trusting that the people of Australia are less likely to default their mortgages.
3) Australian Tax System Favorable to Real Estate Investors
According to YourInvestmentPropertyMag, the Australian tax laws are friendly to people who wish to invest in real estate. For example, it permits you to write off investment expenses against taxes. This lowers your tax bill and offsets shortfall between your rental income and holding costs, either in part or in full. This makes the act of investing in real estate more economically feasible for Australians who are not necessarily affluent.
The same holds true in the face of depreciation, or a decrease in value of the property. Do not be hasty to sell the property just because its value has begun to decline. For depending on how old it is, as well as its renovation history–this depreciation can earn you thousands of dollars every few years. This can mean the difference between a property being negatively geared or paying for itself, according to the Your Investment Property website.
Moreover, your property also benefits from a favourable environment in relation to the Capital Gains Tax. For instance, if you sell your home, you may pocket your money. You do not have to worry about saving part of it to pay taxes the following year come 31 October. Taxes are required, however, if you sell an investment property which you have possessed for 12 months or more, but even then you pay only half of your profits. Thus this makes Australia a uniquely positive environment for those who want to owe less in taxes than in other countries.
4) Superannuation Funds
In Australia, you have the option of tapping into superannuation funds (which are retirement funds), called super funds for short. Although this money has been around for a long time, the YourInvestmentProperties website points out that recent changes in Australian borrowing laws has made this option more feasible for property owners there. The Capital Gains Tax on a sale of property; however, if you are aged 60 years or older, your tax is zero. According to the new rules, you are also allowed to renovate properties that are held in the fund, but you should study the rules and see how they apply to your case.
5) Government Incentives
One more reason to invest in Australian real estate is the fact that the government rewards such investment by giving grants. Perhaps the best known of these is the First Home Owners Grant. Grant monies differ among the states, but can range anywhere from $7,000 in Tasmania to 15,000 in New South Wales and other places as well. In the State of New South Wales, you must purchase your home for $650,000 or less. You can lodge your paperwork in either of two ways–through your mortgage lender or online. Moreover, you must submit paperwork proving that you are eligible, according to the Real Estate.com/au website.
In addition, if you want to invest in affordable housing, the Australian government will reward you with the National Rent Affordability Scheme, which offers you $9000pa for investing in the building of affordable units for people who cannot afford fair market rent to inhabit.
Conclusion
Australia is ripe with opportunity for many reasons– because of the stability of the economic climate; the number of favorable tax laws that enable you to keep more of the money you make, which can be quite large. With the unemployment rate being as low as it is, by investing in where you live, you are more likely to have tenants who pay their rent consistently and on time. This also results in lower overall costs for you, because you do not have to spend money on eviction proceedings for people who do not pay their rent. I am sure, knowing the above benefits of Real Estate Investing in Australia can help you grow more in future, Talk to Real Wealth Australia team in case any other information or tips required to be a good real estate investor. Regards, Helen collier Kogtevs, Director RWA
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Long considered a desirable place to park your investment dollars, Australian real estate is a popular and profitable asset class for locals and foreign investors alike.
Over the years, different market cycles peak and trough due to various reasons, including economic drivers, employment, consumer sentiment and supply and demand.
However overall, investing in Australian real estate is considered a safe and proven form of creating wealth. Investors generally achieve a strong return on investment and with around 30% of all Australian residents renting their homes, continued demand for rental across the country is assured.
No matter where you live, what your income position is or how much you know about investing, it is possible to profit as a real estate investor – provided you know what you’re doing.
Many people, myself included, make mistakes when they first begin investing in property and it’s often because they haven’t educated themselves on the best strategies to use to become successful.
With the help of our Real Wealth mentoring program, your investment decisions will become much more considered, well-researched, qualified and ultimately, much more profitable.
The educational program we offer to those who want to pursue real estate investment in Australia helps people to gain skills and get comfortable with number crunching; developing an investment strategy; managing their budget; and also predicting future market movements.
To gain a better idea of how and why real estate investing could improve your financial situation and help you create wealth for your future, lets take a look at recent property growth statistics.
Generally speaking, house prices in Australia increase year by year. In 2015, ABS data shows that median property prices rose by 4.7% when averaged across all eight capital cities, with the highest annual increase of 8.9% being recorded in Sydney.
For almost every person, regardless of their current wealth or their appetite for risk, investing in property may well prove to be the best financial decision they ever make. Yes, there are risks involved when investing in Australian real estate, but you can mitigate many of those potential hazards when you’re educated on the right way to move forward.
What’s more, Australian property investors can also enjoy substantial tax benefits and leverage their income tax to minimize their financial outlay when building their real estate portfolio.
Real estate prices in Australia are rising at a pace that equals the fastest growth rates in the world, so there’s no time like the present to take advantage of growing interest and demand for real estate investment Australia.
To boost your chances of property success, consider joining our Real Wealth mentoring program to learn about our systematized, step-by-step process for learning how to effectively invest in Australian real estate.
We have worked with hundreds of students over the years, who have enjoyed strong profits on their investments, with the full support of Real Wealth Australia advisers who are always on hand to help.
Get the best investing advice with Real Wealth Australia and keep your money working as hard as possible for you, now and in the future.
Happy Investing!
Helen Collier-Kogtevs