Wipe Your Mortgage Sooner Through Property Investment
There are numerous reasons why people become involved in their first investment property. Some wish to retire early others see property as a fantastic long-term investment.
Did you know that purchasing property for investment can assist you in wiping your mortgage on your current home sooner?
If we look at an investor who may have a $200,000 mortgage on their existing home, purchasing an investment property and selling it in 10 years, the profits can almost wipe the original mortgage.
History has shown that property prices in Australia have grown at an average annual rate of 8.75% per annum since 1978. Whilst it is true that we do experience periods of enormous growth and other of very slow or sometimes negative growth, the fact remains that over long periods of time property makes an excellent investment.
Should an investor purchase a property for $300,000 today they stand to make a handsome profit of approximately $250,000 after taxation in 10years, should we experience an average annual growth rate of 8.75%
Property investment in Australia is very attractive. The Government have excellent policies that encourage investment in property, offering substantial tax savings as well as the opportunity for an investor to provide options for their family. This can include early retirement, wealth building or something as simple as paying off the family home sooner.
In the example tabled, we are assuming an interest only loan which covers the stamp duty and all other costs associated with the purchase of the investment. The interest on this loan is tax deductable and can provide substantial tax savings.
The property growth is assumed to average 8.75% per annum (which it has done in Australia since 1978). Understand that growth varies from year to year and the table is an indication only, however should history repeat itself then property will continue to be an outstanding investment now and in the future.
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