​Is property investment for you?

When it comes to investing in real estate, equity is a key concept to wrap your head around. The Successful Investor’s Michael Sloan explains what equity is, and how you can use it to your advantage.

Is property investment for you

Benefits of property investment

Property is a reasonably secure, long-term investment. You can potentially earn rental income that covers your real estate loans.

You can also benefit from capital gains if you decide to sell down the track, and get extra financial benefits through taxation and gearing.

Investing in property can be a great way to build equity in your home loan. You can expand and diversify your portfolio, and reduce your risk – especially if you have other investments in cash, shares or managed funds.

Understanding the risks

Like any investment, property can carry risks. For example:

  • The income from rent might not meet your expectations, or cover your loan repayments.

  • The value of your property could go down, and you may end up with less money than you started with.

  • Getting quick access to your money can prove tricky.

  • You might earn lower returns than other types of investments.

It’s important to remember that investment properties are long-term ventures – and you’ll need to prepare for the highs and the lows.

Knowing your strengths and weaknesses

Investing in real estate often requires certain skills. It can help if you’re a business manager, marketing specialist, accountant, tax adviser, product developer, handyperson, customer service rep, inspector, or people manager.

If this doesn’t sound like you, it’s worth paying for professional help, or thinking about another investment strategy.

Investment property research

By doing some solid property research, you can help reduce the risks of investing.

As a general rule, you should always buy in sought-after locations, close to transport, schools and amenities. This means you’re less likely to have problems finding tenants, and more likely to win with capital gains down the track.

Whether you invest in a house or a unit, it’s important to buy a property that suits your budget, cash flow, and the location.

Other types of investments

Shares

Investing in shares is considered a growth investment because their value can rise. You can make money by selling shares for a higher price than you initially paid for them.

If you own shares, you can also get income from dividends – portions of a company’s profit paid out to its shareholders.

Keep in mind the value of shares can fall below the price you paid for them. That’s why they’re best suited to long-term investors who are comfortable dealing with the daily ups and downs in the market.

Cash

Cash is a conservative investment. This means that it generates regular income (through interest payments), as opposed to growing in value over time.

Cash investments include high-interest savings accounts and fixed-interest investments like term deposits, government bonds and corporate bonds.

Talk to an expert

Before making any big decisions, it’s worth talking to a us 03 9553 0271. They can help you decide if property investment, or other strategies, works best for you.

Source: NAB

Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/home-property/invest-property/deciding

National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.

© 2022 National Australia Bank Limited (“NAB”). All rights reserved.

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Interprac Financial Planning Pty Ltd 

Darryl Jopling

Senior Adviser

I have worked in the financial services industry since 1982 and as a Financial Adviser since 1999.

I have worked for large Financial Planning businesses, Membership based organisations and looked after the financial planning needs of clients within an Accounting Practice before starting my own business.

I am married, have 4 older children and a grandson and I am keen golfer with mixed results like many .

I have been through many of the strategies I talk with clients about myself and with my family.

I have been through the journey of seeing my parents move into Aged care and negotiated the difficulties and pitfalls of understanding the system for them and this gives me an excellent insight into what is required to assist families at this difficult time.

In a previous roll I used to run retirement seminars looking at Centrelink and Retirement Incomes and how to make these work for you. I have helped many of my clients with Aged Care advice when their parents needed to move into Nursing Homes. For many clients I assist them with superannuation, building wealth and protecting their loved ones with insurance.

I am supported by his, Licensee, Interprac Financial Planning’s in-house resources and ongoing technical, systems and training.

I am committed to understanding your needs and identifying strategies and products to help you achieve your goals.

My guiding principle as an Adviser is to design plans which help to provide my clients with clarity of purpose and the opportunity to build a solid financial foundation.
I will take the time to listen, explain things clearly and keep you informed throughout the advice process.

My experience is complemented by professional qualifications including:

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At Choice Financial Advice we work with you along the way on life’s journey.

Whether you are getting married, starting a family, embarking on the trip of a lifetime, planning to enjoy your years after work or assisting elderly parents with Aged Care and Nursing Home placements, we can help.