How to Build Wealth and Improve the Economy
You Can Win Morally and MateriallyIt is well documented that the Reserve Bank of Australia and the Federal Treasury are well aware of the major benefits to the economy of a vibrant housing construction market. It was the investment by the Federal Treasury into the home owner grants that greatly reduced Australia's slide into recession.
To really capture the significance Just think of what goes into creating one house and just how many people are required and you quickly see the benefits to jobs from a substantial number of different industries and professions.
The roll on effect is like a tidal wave as once the house is built it needs to be furnished, the grass needs to be cut etc etc.
In addition to doing your part in stimulating the economy, it is also documented widely that Australia has a shortage of homes and based on the projected population growth this problem isn't going to lighten anytime soon.
This problem is also further burdened by the government with a myriad obstacles, which increase costs and reduces the ability to supply the growing gap in demand.
However these inefficiencies actually aid the investor. From an investor's perspective investing in a new house makes great sense for a number of significant reasons for example as mentioned above building a new house further stimulates the economy and hence improves ones personal opportunity for capital growth.
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The second fact is taxation as a new building provides far greater deprecation benefits than an older building. So if you have a taxable income that can benefit from higher levels of depreciation deductions then this can have quite a profound effect on one's personal out of pocket holding costs on an investment property.
Maintenance is also a very important consideration. With most new houses coming with 6 year material and workmanship guarantees, again this improves holding costs. High on the list of benefits of investing in a brand new home is that good quality new homes also attract good quality tenants and quality tenants save time and produce better more consistent returns.
One other consideration in regards to the benefits of investing in new housing is that we can also improve on energy conservation through better design and product usage. It is becoming more and more evident that energy efficiency, clean air and sustainability are going to be a focus of future homes, with new laws pending on sustainability it makes sense that if you are going to invest in a new building you can also do your part for the climate, simply by ensuring it is designed to maximise sustainability and energy efficiency. as this may also save you thousands down the track when it comes time to sell and also tenants will be seeking to live in cleaner energy efficient homes.
So in summary a well thought out strategy via investing in brand new homes is good for you the economy and the climate. The key benefit of this investment strategy is that you are in control of your money and your asset and not into someone else's big bonus.
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