Despite the wealth of information available to current and potential property investors, several myths still persist.
Read about the common misconceptions in property investing and how to debunk them.
Myth #1: Property investing is only for wealthy people
Property investing isn’t just for the wealthy. While having capital for a decent deposit is ideal, you don’t need a fortune to get started. Many Australian property investors own just one or a few properties, often using idle capital or refinancing their mortgage to fund their investments. You can invest in property without being extremely wealthy.
Myth #2: You should only buy in familiar locations
The area you choose for investmeent should meet your specific criteria and offer key features that residents seek, such as proximity to the CBD, access to public transport, infrastructure growth, good schools, and local amenities like shops and cafes. Since these qualities are found in many suburbs, it’s worthwhile to research other areas, including interstate locations, to find suitable investments opportunities.
Myth #3: Claiming depreciation raises the property’s cost base
Property investment, similar to other investment strategies, is typically long-term. It’s crucial to utilise deductions for depreciation and other expenses while holding your investment property. Since there’s no guarantee of positive capital growth when selling, claiming these deductions helps optimise your cash flow during ownership.
Investing in properties requires significant research, planning, and a long-term commitment in most cases. Be aware of common misconceptions when buying or selling your investment properties, and always consult qualified legal and financial professionals for guidance. Personalised advice is essential, as you’ll need to make decisions that align with your specific circumstances and long-term objectives.
Remember, this article is general in nature and is not financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.
