Benefits Of Owning An Investment Property

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Updated by Natalie on December 8, 2020
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Benefits Of Becoming A Property Investor & Owning An Investment Property.

There are many benefits you could be taking advantage of by becoming a landlord. While there are challenges, Salvan’s Property Managers can help you mitigate these, so for most people there’s just an upside.

To start with it’s important to note everybody’s individual circumstances are different. Your financial position and goals are unique to you, so before taking out an investment loan, you should seek advice from your accountant or professional financial advisor.
Salvan Property Management Adelaide will never be providing you with financial advice, we can however help you in so many more ways, stress free.

Source Of Income

Provided you pay the investment mortgage off, an investment property can provide a long-term income stream that typically increases over time, from the rent tenants pay. There are expenses to take into account, such as maintenance costs, council rates and strata fees (associated mainly with units) so it’s important to get Salvan Property Managers on-board early to help you set the rental amount right from the start. Often having long term tenants paying less than what the market can bear is better than turning over tenants every 6-12 months, even though they have been paying a higher amount of rent.

Growth In Property Value Over Time

South Australian house prices have generally grown over time, when looking at long-range figures. So, typically the value of an investment property has also increased over each 10-20 year period. Different suburbs react differently at different times and so does the type of dwelling you have invested in.

Australian Rental Price Increase

Demand for 2-3 bedroom units for example has increased. The number of young couples and sole supporting families looking to rent is higher than ever before. According to Australian Bureau of Statistics (ABS) figures, 86% of people aged to 24 that aren’t living at home are renting and 61% of people aged 25 to 34 are renting, as opposed to being home owners.

The demand for rental properties across Adelaide suburbs of South Australia has increased over the last 20 plus years due to the decrease in home ownership.

Australian Home Ownership Decline

Potential Tax Advantages

Your accountant or professional tax advisor will be able to keep you informed of changes to tax laws. Tax deductions you may be able to claim for, to reduce your taxable rental income generated by the investment, as well as to potentially lower the capital gains tax you typically need to pay upon selling the investment property include:

  • Interest on the investment loan
  • Property management fees and commissions
  • Repairs and maintenance costs
  • Council rates
  • Decline in value of certain depreciating assets such as timber flooring, carpets and curtains
  • Costs of advertising for tenants
  • Capital works
  • Landlord insurance

People who haven’t used property managers from Salvan before, come to us because they’ve encountered issues that have not made being a landlord easy or enjoyable. Understanding tenant rights can be complex and time consuming for newbies to the market and what happens when a tenant decides to vacate? How long will you be without rent while you are still paying off your investment loan?
What happens if maintenance is required, or there’s damage to the dwelling? These are just some of the reasons why handing the management of the investment property over to professional property managers makes sense.

Natalie Salvati (Principal of Salvan Property Management) is a registered Real Estate Agent (RLA 276287) with over 20 years experience in the rental management market, looking after metropolitan Adelaide landlords, or as we like to say at Salvan ‘property investors’.

Are you a frustrated landlord that wants to become a stress free property investor?

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