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  • February 28, 2024

A Beginner’s Guide to Long-Term Property Investment

A Melbourne Mortgage Advisor will confirm that Investing in property is an activity that has the potential to earn a substantial return on investment and provide a solid foundation for future wealth generation. 

Property investors who judiciously select their investment properties, enjoy a consistent flow of rental income and impressive growth in property value over time. However, for beginners, long-term property investment can seem like a daunting task. This is where a Melbourne Mortgage Broker can be your key to making the dream of becoming a property investor a reality. 

In this blog, we will look into the benefits of property investment, and outline how you can leverage the expertise of a Mortgage Advisor in Melbourne to obtain the finance needed to purchase your first investment property.

Why Invest in Property

Property investment is akin to planting seeds that grow into sturdy trees. It’s a venture not just into bricks and mortar, but into the very foundation of wealth building. Why property? Because it offers a unique blend of stability, capital growth potential, taxation benefits, and reliable passive income.

Unlike other assets whose values can and do fluctuate markedly at times, property values tend to appreciate slowly over time. This isn’t just about assets on paper; it’s about real, tangible value embedded in the land and structure you own. It’s about waking up each day knowing you’re invested in something substantial and real, something with stability,  something that provides a passive income, and something that will always have value.

Property is more than just an investment; it’s a steady source of income. Owning rental property provides a reliable cash flow, a financial heartbeat that beats independently of market volatility. In a world where uncertainty is the only constant, this stability is a beacon.

The Growing Demand in the Australian Property Market

The Australian property market stands as a cornerstone of the nation’s economy, wielding immense financial influence. A staggering $9.4 trillion encompasses the collective value of the country’s approximately 10.9 million residential properties, illuminating real estate’s pivotal role in the economy. 

This sector secures individual investments and significantly propels economic growth, with over 56% of the nation’s household wealth vested in property. Beyond personal gains, property investors become integral contributors to Australia’s economic framework. Their investments don’t just fortify financial security, but bolster the very infrastructure that fuels the nation’s progress.

The staggering growth in the Australian population in recent years has seen the emergence of a severe housing shortage. A shortage that the Australian construction industry has yet to develop the capacity to build sufficient homes to meet. Due to the demands from a greater pool of home buyers, the number of rental properties available in the market has subsequently fallen, and available rental properties fall far short of the number needed, to bring equilibrium back to the rental market.

This situation is likely to continue for many years to come. Property investors should continue to see high demand for rental properties, and see the value of those properties increase over time, as demand continues to grow and exceed supply.

The fact that a far higher percent of Australia’s growing population than ever before are now long term renters, chiefly due to the high and ever rising cost of home ownership, augurs well for incoming property investors.

Top 6 Benefits of Investing in the Property Market

  1. Growing Value: Imagine your property as a fine wine, getting better with age. Over time, real estate tends to appreciate, increasing its value. That means you might end up pocketing a tidy profit when you decide to sell. It’s like your money is working for you while you sleep.
  2. Steady Income Stream: Have you ever heard the phrase “make your money work for you”? Well, rental properties do just that. If you’re renting out your property, you have a reliable income source flowing into your pocket month after month. In a city like Melbourne, where demand for rentals is particularly high, that can mean minimal vacancy periods.
  3. Mixing Up Your Portfolio: Think of property investment as adding more colour to your financial palette. Diversifying your investments is like having a safety net – if one market wobbles, others hold you steady. It’s a smart way to spread the risk and balance your finances.
  4. Tax Benefits: Property investors can be eligible for certain tax deductions. You can potentially reduce your taxable income through claiming deductions on things like mortgage interest, property taxes, and maintenance costs.
  5. Dodging the Inflation Bullet: Picture this: prices are rising, but your property value is too. Investing in property can act as a shield against the sneaky effects of inflation. Your asset value typically syncs with inflation, keeping your investment power intact.
  6. Playing with Leverage: Here’s the cool part – you can play with borrowed money. Mortgages allow you to leverage your investment, meaning you can control a big asset with a smaller upfront payment. It’s like using a smart financial shortcut to boost your potential returns.

Leverage the Knowledge of a Melbourne Mortgage Advisor

The vast majority of first time investment property purchasers will need to obtain a mortgage backed loan to finance their purchase.

Given the known complexities of the mortgage market, and specifically the lending criteria surrounding loans for investment properties, it is very advisable for first time property investors to seek a guide through the minefields that can confront them.

A Melbourne Mortgage Advisor, especially one that has extensive experience working in the Melbourne Real Estate and Melbourne Mortgage Broker industries, can be both a valuable guide and a direct conduit to suitable lenders, as you seek finance for your purchase.

A smart potential property investor will consult with a Melbourne Mortgage Advisor as part of their initial process of assessing their financial capacity and prospects of obtaining finance, even before embarking on their initial search for a suitable property.

Final Thoughts

Property investment in Melbourne, guided by an experienced and professional Mortgage Broker in Melbourne, can be a powerful wealth-building strategy. However, conducting thorough research, understanding market trends, and seeking professional advice before diving in is crucial. With the right guidance and a strategic approach from a professional Mortgage Advisor in Melbourne, long-term property investment can pave the way for a secure financial future.

Are you ready to take your first steps towards securing your financial future through property investment? 

Oz Lend is here to help. With our extensive knowledge and experience in the Melbourne property market and the Australian mortgage market, we can help you navigate through all of the hurdles you will face on your path towards building wealth through strategic property investment.

Call us today on 1300 438 669 to learn how we (Mortgage Broker in Melbourne) can help you make your dream of owning an investment property a reality.

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