For the majority of investors, residential property such as apartments, townhouses and houses is a favoured option as residential property is generally more affordable than commercial or industrial property investment.
Investing in residential property can offer investors a number of benefits.
Whilst many investors hold investments in traditional asset classes such as bonds and shares, by incorporating residential property into your portfolio, you could reduce your overall risk. Returns on property historically have a low correlation to equity-type investments.
And historically, property has returned attractive yields with relatively low volatility.
All expenses associated with managing your investment property (including interest repayments, repairs and maintenance, and advisor fees) are fully tax deductible. You can also claim general wear and tear and fixtures. There are also tax advantages for negatively-geared properties.
Learn more about the tax advantages of investing in residential property.
Borrowing to invest in residential property allows you to leverage to a greater extent than if you were investing in another asset class such as shares.
Most lenders generally lend up to 90 per cent of a property’s value, allowing you to purchase a larger asset with minimal initial outlay. Of course, the appropriate level of gearing will depend on your individual circumstances, and should be determined in consultation with your Financial Advisor.
Investing in direct property has a number of advantages over investing in LPTs.
By owning your own property, you can continually monitor your investment and add value with simple maintenance and home improvements. You have control over the:
These are outside your control when investing in an LPT.
Buyers Agents, or Buyers Advocates, provide residential property investors with help on buying and purchasing the right investment property.
Unlike real estate agents, who represent the seller of a property, Buyers Agents represent the buyer with the aim of helping the buyer purchase the property for the lowest possible price.
Learn more about getting advice on purchasing residential property from a Buyers Agent.
Purchasing residential property within your self managed super fund (SMSF) can be an effective way to increase the value of your retirement savings and provide tax effective investment returns.
Read our article on residential property & your SMSF.
Read an assessment of the Australian residential property market by leading economic journalist, and Dixon Advisory Deputy Chairman, Max Walsh, from one of his weekly Max’s Thoughts commentaries exclusive to our Gold and Platinum clients.
Learn more about investing in residential property through your SMSF.
Contact Dixon Advisory about investing in property.
Call one of our Property Advisors today to make an appointment: 1300 290 898