For investment, we recommend new or near-new property. The main reason is the holding costs are typically lower with a new property. Contributing to this is better rental demand, low maintenance, builder’s warranties, and most of all, the tax benefits are far greater due to maximum depreciation on a new property, compared to one greater than four years old.
Most Australians don’t have the capacity or time to do the research required to make an informed decision on purchasing a property. Our expert property division carries out extensive research to identify properties with excellent capital growth potential, high rental return, low vacancy and good tax benefits. We source properties in areas with good infrastructure, strong population growth, proximity to schools, shopping centres and public transport, and strong employment – when these critical elements combine, a secure investment that will perform is inevitable.
Property For Wealth has access to hundreds of townhouses, units, and house & land packages, which are either complete or off the plan. These properties are not normally available to the general public and are primarily located in metropolitan and larger regional centres right along the eastern coast of Australia. Ultimately we find the right property to suit the client’s cash flow, and achieve higher-than-average yield and capital growth.
What about price?
Why does every real estate agent talk about price? If you understand property investment, it’s not really the price of the property, but how much the out-of-pocket expenses will be to hold it. It may cost $100 per week for a $350k property, but it could be the same for a $450k property depending upon depreciation, rental yield, expenses and income.
The other thing to be conscious of is to conserve some equity to buy again sooner rather than later. There is normally a diminishing rate of return on properties over $500k.So buying a property over this price range may limit your ability to invest again sooner. At Property For Wealth, we have a philosophy that a ‘rising tide lifts all ships’, so the more ships you have out there the better!
From a price range perspective, if people want consistent growth and low vacancy rates, then buying in the low- to middle-income earner price bracket is wise. Most of the undersupply of property in Australia is in this range; therefore demand is highest in this price bracket, and vacancy is lowest.
If you are on a lower income then maybe cash positive properties will work better for you. If you are on a high and pay a lot of tax then cash positive properties will compound your tax problem. If you are a business owner, then your strategy will most likely be different to an employed person. Ultimately, we help our clients build strong property portfolios that are self-funding. Imagine having 7 investment properties that don’t affect your weekly cash flow? You could continue to live your current lifestyle and potentially retire in 10 years in the top 1% of wealthiest Australians.