Pros & Cons of investing in property
What are the Advantages/Disadvantages of investing in property?
- It is a fairly secure, long-term investment
- It provides a solid visible asset
- It may 'pay itself off' when the rent covers the loan repayments.
- There can be tax benefits through gearing
Like every investment, property also entails expenses and risk. It is important to be aware of the following:
- There are significant purchase costs, including legal costs, stamp duty, property inspection fees, pest and building inspection costs.
- There may be significant holding costs, including repairs and maintenance, rates, body corporate fees and insurance
- The rental return may not meet expectations
- The value of the property may change unfavourably
- If you ever need fast access to the money invested in the property, (it may take time to sell it - as opposed to a more liquid investment)
- You might earn a higher return if your money is invested elsewhere
