How Do You Make Money from Investment Property?
Let’s face it. We go into investments with the intention of making money. Nowadays, Property Investment has become an increasingly popular option. But how do you make money from an Investment Property?
1. Growth in the value of the property
This is also known commonly as capital growth. As the property market is relatively stable, it is expected that your property would grow in value over a long-term period, therefore significantly exceeding the original purchase price. In order to achieve healthy and steady capital growth, you will need an Investment Grade Property. If you don’t know what that is, click here for more details.
2. Rental income and profits
An Investment Grade Property should yield a constant and secure stream of rental income with a strong supply of tenants. High demand areas even have the potential to give you a higher income to expense ratio. Therefore not only are your mortgage, council fees, and maintenance costs completely covered; you are also left with an excess (profit). This is often referred to as ‘positive cash flow’ whereby you have a cash surplus after expenses have been deducted.
3. Tax advantages
There are certain tax benefits associated to owning investment property. For example, you can claim back most of the expenses related to the property; such as managing agent and council fees, as well as maintenance and repair costs. It is important to enlist the services of a qualified accountant experienced in property tax matters to assist with your returns in order to maximise the tax benefits that you are entitled to.
4. Growing Your Property Portfolio
Finally, you can make money by growing your portfolio. Once you have a property that is steadily increasing in value and bringing in stable income, you can look into using the existing equity to purchase your next investment property, and so on. This allows you to capitalise on the money you are making – one step closer to achieving financial freedom!
Now that you’re ready to ‘take the plunge’ and make money, it is important to start right to avoid costly mistakes. Many people feel overwhelmed when it comes to purchasing their first investment property. Whilst it’s easy enough to buy a home and rent it out, there are still many ways your property investment journey can go wrong. This is where Invest Hibbards can help.
Invest Hibbards has developed an easy and transparent property investment process to save you time, energy, and money. We offer a highly attainable and secure property investment solution, which is designed to identify where and when to buy. With our team of experts, our services cover every aspect associated with the process; including individualised financial advice, strategic planning, and tax preparations.