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Why Property?
Is Your Own Home An Investment Property?
We consider all property including your own home to be a Investment Property. This is because statistics indicate that on average home owners sell their properties every seven years. If you buy a new car today, it will lose 20% of its value as soon as you drive it off the showroom floor. So what will your car be worth in seven years? Probably not much. However history indicates that on average property has doubles in value every seven years. Therefore even though when buying a home emotion can come into your purchase decision and you may pay a bit more than you planned to get your perfect home, you still want your home to increase in value over time at least in line with historical property price movements. Therefore your property is increasing in value passively. As long as you maintain the property in good condition and don't keep increasing your mortgage ie equity loans against the houses increasing value you will be able to realise a profit when you do sell at some time in the future.
Additionally throughout this website when we use the word Property, it is referring to all types of property ie residential, rentals, commercial, industrial, professional, vacant land, houses, unit, and warehouses just to name a few types.
Why Property Investment? First we should ask the question "why invest at all"? Unless you will qualify for the Age Pension, once you retire from full time work and have not saved any money or have investments the only income you will have will be from your (superannuation) fund. To get the maximum benefit from your superannuation fund you need to start contributing to your fund when you first commenced employment and continue to contribute until at least age 55. Even then the amount you can draw down each month from your fund just to buy food and lifestyle is controlled. Also I am sure we are all aware what impact the Global Financial Crisis which was identified in 2008 and continues into 2009 has had on self funded retirees and their ability to live off and access their super funds.
If all you are relying on at retirement is your superannuation fund you may be in for a rude awakening when that time arrives. Remember compulsory superannuation was created by the government so that they (us the taxpayer) would not have to fund the Age Pension for people who have retired with no savings or investment income. Compulsory superannuation is not designed to allow you to retire in a lavish lifestyle and live happily ever after, it is to give you a basic standard of living which the government does not have to top up.
Additionally do you want to continue to work until at least age 55 and then retire on your super. Sure you may love your job and help people in your employment. But wouldn't you like to be able to spend more time with your family, or even if you could just cut back on work to four days a week would this make a difference to you and your families lives?
Or if you are a doctor wouldn't it be great to be able to not have to work a full year in your practise and maybe donate some of your time by working with a foregin aid organisation, or if you are a trades person you could assist as well by providing education and building infrastruction for rural areas or assisting seniors or local charities.
Hopefully this has answered your question of Why Property Investment and Why you must not expect to rely on the Government to provide for you and your family in retirement.
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