Why Residential Property Is The most Powerful Investment

Posted by Andrew Nicol on 17/10/18
Why Residential Property Is The Most Powerful Investment

An article in the NZ Herald pitted both sides of the investment sector against each other to answer the question – shares or property, which is better?

The result was, inevitably, a draw, because a newspaper wouldn’t want to be seen to promote any one type of investment. And of course, they’re right in that property and shares will both bring a lasting wealth benefit. It’s smarter to invest your money – whatever you choose to invest in – than to spend it frivolously and have nothing left for your retirement.

But there’s one key thing the reporters neglected to take into account in that piece – and it’s the one factor that makes property such a powerful investment.

Profiting from the bank’s moneyWith what other investment can you borrow all of the capital, but still keep all the profits?

For most investments, you have to find the money yourself before you enjoy the growth of your investing. But in property you borrow the money to pay for your home from the bank. You don’t have to save and raise that money yourself. However, you still get to keep all the profit, whether that’s from rental income or capital gains if you sell.

By borrowing the money you are the one benefiting from the growth on your property. Borrowing also enables you to play in the big leagues much faster. You can generate revenue from a $300k investment with property a lot faster than you can save and invest $300k.

Of course, the greatest benefit of property investment can also be its biggest risk factor. Because you’re effectively investing with someone else’s money, you have to be careful you don’t lose it, because they will want it back. It doesn’t happen often, but the wrong move in property can land you in deep trouble.

That’s why it’s important not to jump in to property investment without the right team at your side. You need experts who can help you navigate the options available to you and ensure you have a solid strategy that won’t leave you open to unnecessary risk.

Your A-team includes an investment advisor, mortgage broker, insurance agent, and accountant. Each of those professionals will ensure you put measures in place to mitigate your risks and ensure you grow a profitable property portfolio for years to come.

Talk to the Opes Partners team today about building your A-team and taking advantage of the powerful benefits of property investment.