By Diverse Capital, Inc

If you are looking for a long-term financial strategy guaranteed to make money, provide security, and give you a large payout in time for your retirement, property investment may be your answer. In the current financial market, investing in a sound property is a lot less risky than investing in the volatile stock market. Due to the very same financial market conditions that are causing so many problems, now is actually an ideal time to invest in property.

Low Prices

The housing market has dropped. One of the reasons many people are in financial strife is that house values have dropped and the property is worth less than the original mortgage valuation.  This means that people have less property equity to borrow against, and many banks are calling in the loans.  However, the good news for the potential investor is that housing prices have dropped. 

It is now cheaper to buy good property, than it has been in the past few years. Real bargains are available, because people are desperate to sell, and not many buyers are on the market. This is the time to purchase at a low price. The housing market will not always be this low, and the prices will go back up. Property is a long-term investment.

Low Interest Rates on Mortgage

Interest rates are dropping as many countries strive to pull the financial market together by lowering official interest rates. This means that banks can offer lower interest rates on mortgage loans, because the rate the bank is paying on the loan is a lot lower too.

Banks are currently offering good deals to those who can offer some security for the loan. You may want to consider cashing in the equity on your home loan for the property you are living in, if it means you could buy a second investment property at these low prices, with a low interest rate loan.

Rental Income

If you lease your property to tenants, you will receive a regular income in the form of rent. Most people use this income to pay the mortgage repayments, and therefore have the tenants paying the mortgage on the property, instead of you.

The rental market is strong, with a lot of competition to rent the best properties. The rent may not cover the entire mortgage payments, but will certainly help.

Tax Benefits

There are tax benefits in many countries for negative gearing an investment property. This is when you pay more (in mortgage repayments, rates, etc) than what you receive for the investment (rental income). Check with your financial advisor or accountant to be sure of the laws pertaining to your suggested investment property prior to purchase.  This may mean that with the taxation benefits, you can afford to pay the mortgage on your investment property. You may only be $20 a week worse off than you are now financially, but with an investment property to build a secure future.

Long Term Benefits

Property is a long-term investment and delivers many benefits in the end. Over any 20-year period in history, house prices have dramatically increased. While the market is currently going through a slump, this will not last forever. The property you buy today will be worth more in 20 years time (when you will have paid off the mortgage). You will have more equity available for further investments when the value of the property increases again. You can sell the property when values increase to make a profit, even after you repay any outstanding mortgage.

This means you can invest in property now to set yourself up for a terrific retirement. You can invest in more than one property too. If you purchase a new property every five years, with the equity in the last one and using the increased rental income, you will have several properties you own when it comes time to retire. If you sell some properties when the market is high, you will have plenty to live on. Continue to rent out properties for a life-long rental income too. Property investment provides security and peace of mind for the future.

Now is definitely a good time to consider purchasing an investment property. Buy now at a low price, pay a low interest rate on the mortgage, and have tenants pay part of the mortgage back, and you will reap the benefits in the future when you own the property outright.