Hi Essar,

I changed the example for your interest rate level, let’s assume a 5% interest (very hard to find but possible)

IP = $345,000
You put $$35,000 from your pocket
Loan = $310.000 for 30 years 6% interest
Rent received after commision =
$265p/w x 52weeks= $13780 – $2500 (costs) = $11280
Loan Repayments = $1,859p/m x 12months =…[Read more]

Originally posted by Qlds007:
WB

Your scenario is simple in ideals but has also forgotten a couple of important issues concerend with property investing:

1) Building Allowance Write Off’s
2) Depreciation

Both these are non cash items but will dramatically effect your Taxation position.

Just a reply from a previous comment, I do not think…[Read more]

Originally posted by esaar:
I must say I agree with ‘Qlds007’ I do not think that your analysis is complete. Depreciation is a very important component to look at when purchasing IP. There are varieties of loan products that probably better serve your purpose of building equity faster and turning your property into neutrally geared. Now days…[Read more]

Originally posted by Dazzling:
Hi WB,

You’ve picked a shocker of an example of the ‘property market’. Buying a bag of lollies down the corner shop would be a better investment than what you have proferred. Whatever supports your argument hey ??

Hi Dazzling,

As you said, it is a shocker of example but it is the current market in any unit or…[Read more]

Hi Richard,

Thanks for your comments. I agree the sharemarket is giving 20%-30% for the last 2 or 3 years. The 10% was the most conservative example.

Now, questions:
How many years do you depreciate a house or unit?
Do you depreciate from the date you buy or the date it was built?

WB

Who is still investing in property when the sharemarket is booming. If you want a poor 2% or 5% per year better going for a saving account. managed funds are easily paying more than 15%, I got 30% last year and this year is getting close to 15%. They also have the magic of compounding and you can sell any time.

Just my thoughts?

It depends if you are going to borrow money to buy the property or not.

If you borrow I think is better to have it under your name as long what you pay for the loan is more of what you receive from the rent.

If you do not borrow is better under your wife because the rent is income which will be taxed at a lower rate.

You also have to consider…[Read more]