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1. Why buy an investment property?
2. How do I Start?
From the list above decide which is most important to you. This will help you decide on what type of investment property you should be looking at. Certain types of properties have a higher probability of capital growth than others while some have a better rental return based on the purchase price.
Finally know what type of gearing is right for your situation and goals. The type of property you choose, based on the investment results that you are looking for, will also help dictate the loan structure that we propose.
Despite popular belief family and friends are generally not the experts in this field: seek professional advice from solicitors, accountants, real estate agents and Brisbane Financial Services who know what they are doing and have helped many others achieve their investment goals.
3. Who to talk to
There are a number of parties you should talk to in order to find out more about property investment. These include: accountants, real estate agents, financial planners and of course your mortgage consultant at Brisbane Financial Services. In fact at Brisbane Financial Services, we have many local business contacts in accounting, real estate, financial planning and more. If you need help with this, we are more than happy to refer you to any of our contacts.
Once you have decided on the type of property to purchase, our qualified consultants can help you work out your equity availability and choose an investment loan package to in line with your investment goals.
4. Positive & Negative Gearing
5. Tax Depreciation Schedule
How does Tax Depreciation affect the Negative Gearing equation?
Tax Depreciation greatly enhances the annual real return of an investment property. A scenario is provided to illustrate how the equation changes once depreciation (a non-cash deduction) is applied to a scenario where the investor is in the top tax bracket of 48.5%.
This simple example clearly shows the impact of depreciation on the after tax cash outlay per week. There is a significant difference in the after tax cash outlay when depreciation is applied demonstrating the importance of maximising this ‘non-cash’ tax deduction. Without depreciation there is a significant negative cost to the investor totalling $151 per week. Employing a specialist to maximise the available depreciation significantly enhances the investor’s cash flow position. Total cash outlay reduces to $60 per week. Information courtesy of BMT & Associates are preferred provider of tax depreciation schedules.