Why you should buy and hold property. It’s no surprise that there are many costs involved with the purchasing and selling of property. At the front end, you’re faced with stamp duty, mortgage fees and building inspections where applicable.
At both ends of the deal there are conveyancing costs, then when you sell agents fees and Capital Gains Tax (CGT) come into play – and while paying tax means you’ve made a profit, it’s best avoided where possible.
Buying property isn’t like playing the share market
There’s no short term trading where you get in and out within a matter of months as you take a punt on the rise and fall.
Bricks and mortar make for a solid, long-term investment which gives you the full benefit of capital growth, combined with ongoing rewards from positive cashflow.
If you buy well in the beginning, there will be no need to sell
My clients succeed because I stress the need to buy and hold. I make sure the research is spot on and matched to long-term goals. We put all the right risk minimisation strategies into place (cash buffer and insurances) to get it right the first time around.
Buy new for full depreciation advantages
Of course, if you buy off-the-plan or build, you’ll get the full depreciation advantages back in your tax. And then if you keep the property for a period of 10 years, any appliances you replace or updates will require a revised depreciation schedule.
The longer you hold, the better growth your property portfolio will achieve
What better reason could there be to hold property than the fact that it usually doubles in value over every 10 year period? Depending on your exact investment location and the state of the market when you buy, there will be exceptions to this, but as a general rule it’s fairly close to the mark.
A buy and hold property investment strategy should provide you with a solid income stream for many years to come, but takes much planning. Don’t go at it alone – get professional advice from a property portfolio specialist such as myself and watch your wealth grow.
As always, if you have any question, please leave a comment below.
Until next time,
From the desk of Christine.