7 Reasons why now is the time to invest in Bricks & Mortar
To this day, property investment remains one of the best and safest way to invest money. It can be one of the simplest strategies to grow your personal wealth and generate income for today, and tomorrow.The great news is that with good financial management, expert advice and a home loan with healthy rates, you can get your foot in the door to a range of possibilities and benefits!
Read on to discover the seven reasons to create wealth through a New Zealand property investment with Milestone Homes.
1. It’s simple to understand
Property is an easy investment to understand, without any of the complicated terminology found in the stock market. It doesn’t require specialist knowledge, so as long as you do your research, get expert advice and organise your finances, there is little risk in overpaying or making a bad purchase decision.
2. Stability / financial security
Perhaps the most stand-out feature of real estate investment is the ability for long term capital growth. Property is far less volatile that other forms of investment. For example, purchase a property for $200,000. After 10 years, it could be worth:
• 5% Capital Growth $326,000
• 10% Capital Growth $519,000
• 15% Capital Growth $810,000
3. Rental Income
Through buying an investment property, you can build equity and essentially get renters to pay off your mortgage in the process. Rental income offers a consistent cash flow with good rental income increasing the market value of your property. Also consider that your rental property doesn’t need to be in the same city as your home.
4. Tax benefits and deductions
Property also offers many tax deductions. One major incentive is that New Zealand has no capital gains tax. There is no tax to pay when you sell one or more investment properties for a profit. If your property related expenses exceed your rental income, you can negatively gear the property. This allows you to offset your investment income against costs to reduce the tax you pay. You can also claim a number of deductions on your rental income such as rates, insurance, repairs and maintenance.
You can use the equity in your home and investment property as a working asset for further investments. This financial leverage is far greater than a share portfolio.
6. Full Control
Unlike shares, the minute you buy an investment property, you have full control over it! You’re free to decide what type of property to buy and which property financing method to go with. Property is also resistant to fluctuations in the market as housing represents a basic need.
7. Now is the time
With some interest rates below 3% and only 20% equity required on investment properties now’s the time to look into building. Currently most banks are allowing investors to borrow up to 80% on new investment property, up from 70% in June, meaning more people have the ability to make this dream a reality.
Investing in a Milestone Home is safe as houses!
If you’ve been thinking about an investment property you’ve come to the right place – we can help make that thought a reality. We build quality homes with quality products that are great to live in owner occupied or as a rental.
Why? Our homes are covered by the Masters Builders Guarantee. They are affordable and inviting and are far easier to maintain than older housing stock, particularly when trying to meet new government regulations.
Finance companies love our model because when building with Milestone you are building off a proven plan range with very low risk around unforeseen costs. We tell it like it is and you get what you expect.
A final word
In spite of the Covid-19 crisis with many underlying fundamentals that support the housing market remaining in place: banks funding lines, historically low interest rates and housing shortages within key locations, its a great time to consider investing further in bricks and mortar.
Don’t let your money sit idle , seek a better return long term and make your money work for you.
Find an accredited Milestone Builder in your region and discuss your plans and requirements in person. Click here.