Residential Property Loans

Investing in residential property has always been a popular investment option.  It is an asset class that historically, over the long term, has produced satisfactory returns for a lot of investors. Arguably, it could be said that property has made more people wealthy than shares and it can significantly affect the wealth of the small investor as there is the potential for growth and even more beneficially for the investor, growth with the bank’s money.

The first question you need to ask yourself is why do you want to invest in residential property as opposed to getting the apparent better returns in commercial property or shares.

Some Advantages:

Low volatility There is no daily fluctuation of price, making it easier for you to ‘stick with’ your investment plan .
Taxation There are considerable tax advantages for residential property. There are capital gains tax discounts if you hold a property for more than 12 when you sell. If you live in your property then generally there is a full capital gains exemption. If you purchase an investment property, there may be tax advantages each year if the property in negatively geared.The benefits for your situation need to be discussed with your accountant but  rule of thumb is if you need the tax deduction to cover the shortfall then you probably can’t afford the investment.
Capital growth Because the bank provides most of the funds for a property purchase, there is considerable leverage and your capital growth returns can be considerable.
Long term Investing in property is a long term wealth creation strategy that can provide investors with consistent returns over the long term.