Mitigate Your Risk Through Asset Selection

It’s true that some investments are riskier than others.  However, the trick is to work out what you can invest in that will always be in demand. 

I love investing in property because it is a low-risk investment as there will always be less supply than there is demand for it as nobody is making new land for us to build on.  It’s something real and there will always be a need for people to have somewhere to live.

Let’s take a look at the pros of property investment and how to make the most out of your investment in property.

It’s true that there are potential downsides of investing in property but smart investors make the downsides work for them and then they can become upsides.

The pros are very clear, however:

• There are tax breaks on mortgages and even rental income depending on how you structure your investments. This is a great source of return for property investors.
• When you own property, you own something tangible. You can touch bricks and mortar unlike the percentage of a business you buy when you buy a share.
• Property investment is not volatile in the way that shares or commodities can be. Sure, the market may have a little downturn every now and again but the on-going long-term trend in property is rising value. There are more people in the world every single day but there is no new land. Property will always be in demand.
• You don’t just benefit from having someone else pay off the mortgage (which is an appreciable return on your investment) but you also benefit from capital gains in the equity value of your property. In short, investing in property pays out twice on the same investment.
• The rent received from the property can be used to pay down the mortgage over time.
• The property tends to gain equity value. A reasonable gain would be 5% year-on-year which means that by the time the mortgage is paid off in 20 years’ time. The property is worth much more than the purchase price. If you purchased a $500,000 property at 5% year-on-year growth it would be worth $1,326,649 after 20 years. That’s an additional $836,649 in equity increases. You get back 13 times what you put in in the first place. That’s the power of control and leverage.
• Security against inflation is a bonus too.  If your investments doesn’t outpace inflation – they are worth, in real terms, less every year. In Australia, in 2017, the inflation rate is 2%. That means you need to find an investment class which performs better than that. With a reasonable expectation of 5% year-on-year (and in the past returns have sometimes been much higher than that), property investment also offers security against inflation.
• Make your money work harder for you through leverage.  The process by which you use “financial instruments or borrowed capital” to increase the potential returns on a given investment. Typically, you will pay 10 – 20% deposit on an investment property. So, for example, if you put down $100,000 (20% deposit) then the bank will give you $400,000 in a mortgage on a property worth a total of $500,000.

Property investment can make you wealthy beyond your wildest dreams. It’s a great way to end wage slavery and build a future without money worries and here’s why.

There are numerous tax breaks when investing in property.  Leverage is the property investor’s friend as it allows you to investment more money than you could normally by investing a small sum of your own money. There are no other investment classes which offer the investor as much financial strength for such low investments.  Also property grows in value, making your money work harder for you. 

Want to know more about investing without unacceptable risk, with decent rewards and rewards which beat inflation? Why not contact our team to see how you can make your future one a wealth one, today?