A diversified investment portfolio is important to maximise returns and balance risk exposure. As such property is an important part of any investment portfolio.
Buying property is a popular form of investment. For many people the idea of bricks and mortar is easier to understand than other forms of investment; it's tangible, you can see and touch it. However, as with any investment it has its advantages and disadvantages including:
- Property can be less volatile than shares or other investments; income growth from property is generally steady over the long term
- Control – as the owner of an investment property you determine how it is managed, the profitability is not determined by large corporations
- You can earn rental income and benefits from capital growth
- The property can be depreciated providing a significant tax advantage
- Control – some investors are put off investing in property because they are not experienced in managing a property
- Liquidity – property can't be sold quickly
- Property investment requires high entry and exit costs and investors are at the influence of interest rate activity
These are just some of the pros and cons. It is important to give consideration to these and others that may affect your personal situation.
If you are interested in further exploring the option of investing in property and how it could benefit you please contact O'Brien's on 03 8850 3333 and one of our advisors would be pleased to speak with you.