Pros & Cons | Location | Tax Breaks | Attitude | Property Manager

 
 

PROS

Extra Income: Rent earned on property is considered income and once your loan is paid off it goes directly to you. Imagine being able to retire on your property investments!

Equity: Whether your property’s value increases or not you will continue to pay of the loan, hence building equity. You can then use your equity to borrow money for another property or other purposes.

Power: You have the power to do what you want with your property. You can sell it, decide to live in it or extend or renovate and add value to your property.

Tax Breaks: Such as Negative Gearing along with being able to claim depreciation of certain items can make an investment property more affordable.

CONS

Expenses: Count on expenses – things need repairing in rental properties. You’ll also have to pay for insurance, rates and other ancillary expenses.

Tenants: 100% occupancy is quite rare on rental properties. Can you cover the loan repayments if you don’t have tenants in there for a time? Hmmm.

Debt: If an investment property is your 2nd residential purchase can you cope with the greater debt? If it’s your 1st can you cope not living in it?

Access: Quick access to the money invested in your property is not really viable - it will take time to sell.

Returns: You may be able to yield a higher return on other types of investments