Lower income earners should look towards property as an investment even more so than those on higher salaries, according to a leading investment group.
While many think they should be wealthy to own an investment property, Aviate Group managing director Neil Smoli said that it is an ideal path to financial security for the average Australian.
“In many ways it makes more sense for individuals, couples or families with a comparatively lower income to invest in property as it can provide financial security and reliable returns well into the future, not just for the purchaser but for generations thereafter,” Mr Smoli said.
“Obviously the need for security is critical, which is why as an investment class residential property has proven successful for so many Australians.”
Tax advantages, long term capital growth opportunities and rental income can all be utilised by lower earners who should see the low volatile asset class as aligning with their ultimate financial goals.
Many investors over-estimate the entry level price for a decent investment, Mr Smoli said.
RP Data statistics indicate that properties can still be found for under $200,000 with decent returns.
Units in Brisbane’s Bellara, with a median price of $115,180, reported a 12 per cent yield, while Wellington in NSW, with a median price for houses of $100,000, had a nine per cent yield.
In Sydney, Blacktown LGA’s Blackett saw properties priced at $230,000 and reporting regular seven per cent yields, according to January RP Data statistics.
“A degree of apprehension about embarking on a property investment is natural, particularly for those with lower incomes, which is why undertaking the correct due diligence is of paramount importance,” Mr Smoli said.