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The Fruits of Property Investment

- Wednesday, September 09, 2009

If you’re looking to set yourself up for the future, the property market is a great investment choice – and now is the perfect time to jump in.

For as long as most of us can remember owning our own home has been the great Australian dream, but the trend towards owning several properties is growing in popularity and it’s not hard to understand why.
Property investment is increasingly being recognised as a fantastic wealth building tool. To get the most out of property it is best to view it as a long term investment or means of generating what is referred to as capital growth.

Why invest in property?

Historically, property prices in Australia have doubled in value every seven to 12 years, offering a steady path to wealth creation.

Compared to other investment options, such as shares or other complex financial products, bricks and mortar also remain a relatively safe investment.

You won’t need a degree to understand the fundamentals of property investment, and provided you do a little bit of homework there’s a fair chance it will deliver good results.

In contrast to financial markets property has also proven to be much less volatile. Over the course of the financial crisis, the Australian share market lost around 40 per cent of its value while most housing markets only dipped slightly or simply remained flat. According to RP Data, for example, overall property values fell by just 2.6 per cent in the 2008 calendar year.

As well as potential long term capital gains, an investment property can offer you good returns now. The rental income you receive on a property can help cover your mortgage repayments, and in a market such as today’s – when interest rates are low – your rental income may even cover all, or more, than your loan commitments. This will leave you with positive cash flow while your investment essentially pays for itself.

Current opportunities

Current fundamentals in the property market are shaping up to offer some of the best conditions in years. With house prices having softened over the last few years, intense housing shortages combined with low interest rates make positive cash flow opportunities a reality – now is an ideal time to consider an investment purchase.

If you already own a property you may be able to use equity that has built up to fund a new investment.

In fact, once you have your first property under your belt the opportunities for more investments will continue to blossom, with each property giving you greater leveraging power and opportunity to invest further.

To find out your investment options be sure to give us a call – we’ll find the ideal financing strategy and investment property to suit your needs.


This article does not necessarily reflect the opinion of the author/s,  Carruthers Financial Services Pty Ltd or any of its employees or subsidiaries. It is intended to provide general news cand information only. While every care has been taken to ensure the accuracy of the information it contains, neither the author/s, Carruthers Financial Services Pty Ltd,'Carruthers Financial Services Pty Ltd's employees, or its subsidiaries, can be held liable for any inaccuracies, errors or omission. Copyright is reserved throughout. No part of this article can be reproduced or reprinted without the express permission of Carruthers Financial Services Pty Ltd expect for the use for which it was purchased for. All information is current as per the date of delivery and Carruthers Financial Services Pty Ltd will take no responsibility for any factors that may change thereafter. The purchaser of this article and all readers thereafter are advised to contact their financial adviser, broker or accountant before making any investment decisions and should not rely on this article as a substitute for professional advice.

David Carruthers is a credit representative (Credit Representative Number [400226]) of BLSSA Pty Ltd (Australian Credit Licence No. 391237).