In addition to the much greater availability of retail loans, there are often substantial tax advantages available compared with other investments. For example in Australia: the ability to deduct interest payments for investment properties as an expense offsetting all income (not just income derived from the property) to determine taxable income. So in addition to the loans being easier to get and having lower interest rates, they’re effectively lowered further by the investor’s marginal tax rate.
There is also a substantial discount (50%) on capital gains tax for holding the relevant assets for more than a year, which applies to rental property more naturally than many other leveraged investments.
In addition to the much greater availability of retail loans, there are often substantial tax advantages available compared with other investments. For example in Australia: the ability to deduct interest payments for investment properties as an expense offsetting all income (not just income derived from the property) to determine taxable income. So in addition to the loans being easier to get and having lower interest rates, they’re effectively lowered further by the investor’s marginal tax rate.
There is also a substantial discount (50%) on capital gains tax for holding the relevant assets for more than a year, which applies to rental property more naturally than many other leveraged investments.