Hi fellow property tycoons.
This forum can become quite addictive.I hav spend nearly each night reading the various topics posted.
There are alot of you out there that really are switched on when it comes to property investing.
The problem I am experiencing is that (as a generalisation) there are minimal properties in the capital cities or major regional towns that return the magically 10%. I have looked at various negative gearing scenarios and all come up with the same outcome. That is that even after tax refunds a fully financed property will produce an after tax loss of approx. 3% of the purchase price. Therefore over 5 years a property would have to increase 15% after allowing for agents commission and Capital Gains Tax. This might not sound like much, but I personally have my doubts that in the current property climate this could be achieved.
I’m interested in hearing other peoples thoughts
Cheers
Beancounter
Gidday beancounter,
What are you looking for “Capitol gains or Cashflow”?
Negative or neutral properties abound and then the tax implications can provide the +cf but a lot of people purchase in this environment to take advantage of the profit at the point of sale.
Maybe you could look at other centres other than major regional areas.
CheersSpider
Hi Beancounter
I agree that it will be very difficult to achieve high returns that would make a negative geared property’s return worth the risk. I feel there are still areas that will certainly achieve good returns. Demand in regional cities and towns in Victoria have not dropped off at all. People still want to invest and many are now looking at country towns and are amazed how cheaply they can buy. If you are prudent and look for areas that are growing and have something happening (eg new business’) that will help the population grow who know how much these centers will rise. People are flocking back to regional towns in Victoria reversing the trend when country towns were decimated by the years of Kennett’s Melb focused policies. If the Federal Govn’t pushes to sent immigrant to regional areas as some are demanding this will futher push up prices.
I wouldn’t be buying purely for capital gains but if you can find cash positive and potential you have it made. A friend of mine just purchased a property in a town (pop over 7000) in Vic for 121K the property is an older style House split into two 3Brm houses with a current combined rental of 260pw. the deals are still out there.
Regards westani know we are just about ren-ed out but I would still say that a budget reno to clean a place up and make it bright and fresh can make the difference to rent a place out for just that little bit more to make it more CF+ve as is adding value things like whiteware , cable, etc
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