hey,
Im about to start work for $30k a year, and i have $15k saved up.
Is my income enough to consider purchasing an investment property when I have only a few expenses ( petrol, phone credit, food, rego & insurance )Since i will only be paying around $3.5k tax per year i suppose it wont be possible to find a positively geared property?
Generally you can borrow around 5 times your annual gross income. plus a bit more if rent is included and your are living at home.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Your new income may have to wait till you are permanent in the job and considered permanent by the bank to borrow from the bank.
Suchy wrote:hey,Is my income enough to consider purchasing an investment property when I have only a few expenses ( petrol, phone credit, food, rego & insurance )
Depends on what amount you want to pay for the investment house
If it is in a rural town you may find the purchase price is less.Suchy wrote:Since i will only be paying around $3.5k tax per year i suppose it wont be possible to find a positively geared property?Positive geared properties are dependant on how much interest plus expenses you are paying compared to how much rent you are receiving. unless you are also adding in depreciation expenses as well.
Nett property income = Rent – (interest expense+ council Rates + borrowing expenses (5yrs) + water rates + insurance + repairs)
If Nett > 0 then it is positively geared.Where your 3.5 tax comes into play
30 k a year
6 k is in tax free threshold
6001 – 30,000 is 15c= $3600
If Nett < 0 then negatively geared. Up to -24,000 so you could claim 15c back on every $1 you had to top up property loss by.
So negative gearing not really a good thing when on 15% tax.Suchy,
I am not sure if you are aware or not, but if you purchase a property that is say 80-100% financed by the bank and it still generates a surplus rental income over all expenses (including loan interest) hence positive cashflow. You can still end up getting tax credits due to the non-cash deductions I.e. The depreciation costs you are allowed to claim on the value of the Building and the chattels and fitout.
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