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Investing in property is so much more complicated than it was 20 years ago.
It used to be really simple; find a good property and buy it.
Nowadays there are all sorts of other distractions put in the marketplace in order to attract
your investment dollar.
The taxation advantages are really important, but they're not the reason a person ought
to buy a property.
The reason why a person ought to buy property is in order that they can take advantage of
some growth in the value of that property rather than any taxation advantage along the
way.
Remember that these are simply distractions to take your eye away from the simple assessment
of whether or not the subject property is actually a good investment property and will
work for you in terms of capital growth. Buying off-the-plan
The alleged attraction of buying off-the-plan is the savings one can make in the stamp duty.
Believe me, the amount you save in stamp duty is well exceeded by amounts of commissions
paid to the selling agent.
Those commissions are built in to the sale price.
These properties are problematic in terms of their valuation at the time settlement's
due.
Any advantage you get out of stamp duty savings, can't be transferred over to whoever you sell
that property to, therefore, they're not going to pay you for the advantage that you had.
Serviced apartments
With serviced apartments, investors sometimes can receive a higher rent return.
The problem is, that you need to refurbish those properties quite regularly so the extra
money you receive from your rent return is well and truly absorbed by the required refurbishments.
There really is no advantage in this.
The banks have trouble lending on them, therefore your buyer pool is limited whenever you come
to sell them.
This has a dramatic effect on the amount of capital growth you receive on your investment.
Student accommodation
Similar circumstances apply to student accommodation as far as the banks are concerned.
One of the problems with student accommodation is that the apartments, generally speaking
are very small.
The responsible authorities are very often allowed a greater density of apartments than
they would normally allow, on the condition that these apartments are only occupied by
students.
So if the demand for students drops off, you can't replace that demand with ordinary rentals.
So in summary, when you're assessing a property's suitability as an investment, assess the property
alone rather than any of the other distractions that have been put there to seemingly assist
you in your decision.
Please try and ignore those and assess the property's potential performance for capital
growth based on its history of performance in the past and its potential for the future.