Those investing in property will want different things from their investments. For some, property investing provides extra earnings on the side, while for others it’s their main source of income. What you get out of investing will depend on how you approach your investments and how much of your own time and money you are able to put towards them.
You have a full-time income, and probably already own or have a mortgage on your own home. Investing is a way for you to leverage a portion of your income to create a return for yourself through rents, to build an asset base for your retirement years, and possibly to take advantage of property depreciation rules to decrease your tax burden.
Property-leasing Business Owner
You own multiple properties and most of your income is rental income. A substantial part of your day-to-day work consists of management tasks related to your portfolio of properties.
Property-trading Business Owner
You buy properties in order to sell them for a profit in the short term – sometimes referred to as ‘flipping houses’. You are constantly on the lookout to buy properties that will yield significant growth as fast as possible, either because of fluctuations in the market as a whole or because of the changing character of particular suburbs. You may also look for properties where there is potential to add value, such as by renovating a dated bathroom or kitchen, in order to sell the property for a profit.
You aren’t engaged in an ongoing property-trading business, but are undertaking essentially the same activity on a one-off basis. Taxation rules for this can vary depending on the scale of the undertaking.
Remember that the Australian Tax Office will treat your investment income differently depending on which of the above categories you fall into.
Property Investment Advice
For specialist advice on all aspects of property investing, call Rass Global Investments.