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CPPA Blog

Property Investment Success Stories and Tips on Maximising Your Profits

Certainty in your next Real Estate Investment

Posted by on in What Makes a Great Property Investment
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There's a lot of information out there on property. Most of it is noise that detracts from the fundamentals of real estate.

What we're considering today is some basic tenants of successful investing, that should guide you and give you certainty in your next real estate investment.

The essence of smart investing is to hitch your nest egg to an asset that appreciates over time. An asset with a low risk, that is tax effective and costs little to maintain. An asset that gets paid for by the tenant, and the tax savings it delivers in your situation. That's what we offer at CPPA.

Let's Get Certainty into your Real Estate Vision

What? - What kind of asset?

Residential- because we'll always need homes to live in. If the population is growing, investing in a home makes sense. We steer away from commercial for 2 reasons: 1. the trend for telecommuting and working from home will see commercial property decline in value with increasing vacancy rates. 2. It's a much higher interest rate to fund commercial property, and the gearing is much lower- at say 65%-70% maximum borrowings.

Residential House and Land Packages- because in that way, it is cheaper. It's true that a house land package will often get you a cheaper total price because the stamp duty is saved on the building. Plus tenants want and expect high standard of finishes these days. A new house delivers a premium product to the rental market and achieves a higher yield on your investment property, than an old tired 15 year old home.

Even if the gross rental yield was a similar rate, two factors allow new property to deliver higher net returns than older property. The first is depreciation allowances which can mean $6,000 to $12,000 a year difference. And the second is the high maintenance costs with older homes, which can easily run to the same kind of figures.

Where?- Where should I buy?

Sure there are Hot Suburbs, overheated mining towns and the like. But picking a location like that is either a "feast or famine" situation. Look at what happened to Gladstone. Six years ago it took off, then the bubble burst, and prices have returned to where they were. It's wise to pick areas that have multiple industries driving them, not just mining.

CPPA's has researched selected growth areas with great prospects for growth. Buying locally is one option, but buying in a growth area makes a lot more sense. Plus diversifying your investments in different states reduces your exposure to state land tax.

Hell you can even claim travel to your investment home once a year to inspect it!

Why?- Why invest in property?

When you look at the Australia's property market over the last 120 years, property has doubled on average every 10.5 years. That means it appreciates at 6.85% pa. But the best part is, when you factor in the gearing or leverage you achieve with a property investment, (with a 20% deposit) that 6.85% becomes 27%pa (after costs).

How?- How do we select the right investment?

CPPA have experience finding properties all over Australia. There are great value options including waterfront house land packages from $400,000. And all investments are sold on bank valuation.

Who? Who will help us get the investment strategy correct?

Let CPPA give you a no obligation assessment of tax savings that may apply in your situation. They'll arrange finance if required and ensure borrowings are in the correct structures for the best possible leverage and future portfolio additions.

In fact CPPA manage the whole investment for you, a turn key project management service- included at no additional cost.

Learn more- Call Rod Humphrey 0412 440 267

 

 

 

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The information contained in this website is general in nature and may not be relevant to your individual circumstances.
You should refrain from reliance on this information without first obtaining suitable professional advice. **Our investment strategies are based on purchasing a brand new Investment Property, involving interest only borrowings, appropriate financial gearing, anticipated rental income, and tax incentives to achieve a low-cost affordable outcome.The example of $10/week to service a $400,000 investment property, is based on outcomes achieved for several of our clients. It may not be the case in your situation, and results will vary based on your taxable income and individual circumstances.

Copyright: - Capital Property Partners Australia Pty Ltd - 2016 - ABN 73 167 809 430

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