Is Residential Investment Property for You?
Not only can you save about $8,500* a year in Tax but with a brand new investment property you can also create* a $350,000 nest egg in 7 to 10 years.
What do I need to Start?
A desire to save tax, create wealth and;
- A family income of about $75,000 pa;
- Ability to invest about $200 per week (less for high tax payers);
- $35,000 or more in cash or available equity in your home;
- This situation* can create a $350,000 nest egg for you in 7 to 10 years.
Why We Use Residential Property?
- Shares? - Property has similar returns, lower risk & allows higher gearing
- = better Real Outcome.
- Cash? - Property has growth & tax advantage
- = better Real Outcome.
Brand new residential property is often the BEST form of investment available for wealth creation in Australia. By best we mean;
- Higher than average returns,
- Lower than average investment risk,
- We can borrow more against it giving greater leverage;
- Tax effective;
- Easy to understand; and
- Simple to do; and can be worry free with our help!
Shares are often considered the BEST form of investment for wealth preservation;
Cash is the best form of liquid asset (funds required to spend).
How does it Work?
- Seek professional advice (Finance, Wealth Creation, Investment Property);
- Purchase a new (not 2nd hand), high quality Investment House (not unit);
- Structure finance to maximise tax benefits and investment return;
- Claim all deductible expenses & all depreciation;
-
The Tax Office and your tenant will pay* for 75% of your investment property.
What should I do next?
Your first step to saving tax and creating wealth is to invest a little time and allow us the opportunity to assess, at no cost to you, your current situation to see if we can recommend any improvements. We can assist you determine;
- How much tax can I save?
- How do I get a financial plan that suites me?
- When should I start investing?
- How much should I invest each week towards my future?
- What is the real, after tax, cost to start creating wealth?
- What steps are involved to become an investor?
- Is residential investment property the best investment for me?
- What is the best area for me to invest in?
- Which investment property is best for me?
The Power of Financial Planning!
Real Cost; Real Outcome : Real Example
Mr & Mrs Investor can afford $140 per week and they pay 31.5% tax (including Medicare) and have a $40,000 line of credit secured against their home. They want to improve their financial situation over the next 10 years and want our help.
What are their options?
- Save $140 per week in a cash account; or
- Borrow to invest in an older house costing $140/wk; or
- Borrow to invest in a brand new house costing $140/wk; or
- Borrow to invest in shares costing $140/wk.
After 10 years, and a similar investment commitment, Mr & Mrs Investor can have;
- $356,385 cash (tax paid) or $788,008 of assets by
-
Investing $50,704 into a Brand New Investment Property
- $193,176 cash (tax paid) or $491,788 of assets by
-
Investing $51,139 into an Old Investment Property
- $201,109 cash (tax paid) or $290,321 of assets by
-
Investing $66,787 into a Share Portfolio
- $90,717 cash (tax paid) or $90,717 of assets by
-
Saving $72,800 in the bank!
DISCLAIMER: This example is based on one set of variables - a different set of financial circumstances may give a different result - CONSULT one of our Financial Planners to confirm what is best for your personal circumstances.
Borrowing to Invest - Gearing or Leverage
The ability to borrow against an investment for its purchase has two advantages;
- The costs incurred are tax deductible (that is the real cost of the borrowing is reduced); and
- The investor receives 100% of return but is only required to pay for a small percentage of the investment:
We need to understand and identify;
- The investor's specific risk profile;
- The Investment type and its suitability for gearing;
- That risk can be raised or lowered by raising or lowering the level of borrowing;
- Gearing has no affect on the return of the investment; and
- How gearing affects the Investor's Return - the Profit.