5 ways to make money from Sydney real estate

There are five ways to make money from real estate, and if the formula is correct, you will make money from your property.

Capital growth:

Your properties will need to increase in value at a wealth-building rate in order to create a healthy asset base. This will be driven by high demand from owner-occupied properties (which increase property values) and by tenants (who help pay your mortgage).

Cash flow:

Simply speaking your rent.

Tax benefits:

However, this is not the only reason you should invest; a well-thought-out tax plan can also help you manage cash flow, reduce your tax liabilities and boost your profits.

Accelerated growth:

One of the best ways to generate capital growth is to invest in properties that need a bit of a makeover, whether that’s in the form of renovations or a full rebuild through property development.

Inflation: 

Property investors have figured out that it’s not as easy to make money as it is to make money with cash. They’ve figured out that they’re better off using other people’s money as leverage and gear — in other words, taking out a mortgage. Over time, however, that mortgage becomes less valuable as inflation eats away at it. For instance, let’s say you take out a $400k mortgage on a $500k property today. Ten years from now, your property could cost $1m and you’d still owe $400k (assuming interest only payments). However, in ten years, that $400k won’t be worth nearly as much as it would be due to inflation.