Many people believe that the best way to build wealth is to pay off your home as quickly as possible, but is this really the best way to go about it? We’re going to explain how investing in property may be the better option.
There are obviously benefits to paying off your mortgage. Benefit number one being that you don’t have to fork out hundreds of dollars each week for the mortgage payments. Also, another benefit is that you have access to money in a hurry if needed.
But, are the benefits of investing in property better? We definitely think so. Let’s take a look at some of the reasons why.
First of all, let’s say you put all of your savings into paying off your home, what happens when you retire? If you don’t have enough money in your superannuation fund you will more than likely have to sell your home and either purchase something smaller or start renting instead. But, if you have an investment or multiple investment properties, you continually have cash flow coming in.
The average property in South Australia increases by 8% each year. So, say you bought an investment property for $320,000. It is expected to increase in value by $25,600 each year.
Now, let’s assume that South Australian properties are still increasing by 8% each year. How would things look after a 9 year period?
You would have built $276,800 of wealth!
Would you rather have paid your mortgage off a little earlier or be $276,800 better off?
I think the answer is simple.
Remember, this is an example only. There are many other factors that will need to be taken into account. We recommend talking to a professional to discuss your individual circumstances.
Call us today for an obligation-free chat on 1300 846 956 to find out more or Get Started Now.
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