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Property Strategies | | 1300 550 656.

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Presentation on theme: "Property Strategies | | 1300 550 656."— Presentation transcript:

1 Property Strategies | |

2 Weve identified 22 different residential property strategies Introduction

3 Property Strategies Buying land Land banking Positive gearing Strata Titling

4 Negative Gearing

5 Brand new Paid $155k in 1993 and renting for $190pw 6.3% gross rent (interest was 8% pa) Lots of depreciation

6 Negative Gearing The best thing about holding a negatively geared property… Eventually it becomes positively geared! Eventually it becomes a renovator! Now valued at $650,000 and rents for $450 pw (15% return on purchase)

7 Negative Gearing Cons of negative gearing: Potential for negative equity in the short term if prices fall Costs may become unmanageable Can become a liability if only purchased for tax advantages

8 Property Strategies Buy, Develop, Sell Paper Developments Joint Ventures Individual Units/Apartments

9 Buy, Renovate, Hold

10 $295,000 in 2001 Reno Kings Style Reno…$6k Polish floors, paint and turned from 3 to 4 bed

11 Buy, Renovate, Hold Rent went from $220pw to $320pw Thats $5,200pa extra rent for a $6,000 reno! Now worth $750k and rents for $475pw But wait, theres more…

12 Buy, Develop, Hold

13 The buy, renovate, hold was also on a double block. It is also a buy, develop, hold!

14 Buy, Develop, Hold The proposal: 2 x 5 bed, 5 bath houses (Artists illustration indicative only)

15 Buy, Develop, Hold Total development costs $800k Plus original purchase of $295k Rent 2 x $1000pw 9.5% pa Plus huge depreciation

16 Property Strategies Niche Markets Unit blocks House & Land Packages New Houses

17 PPOR = Principal Place of Residence

18 Principal Place of Residence $514k November 2008

19 Principal Place of Residence Why not make it an investment too? Investment components: – Location – High land value – Renovation

20 Principal Place of Residence Renovation cost $120k Current value $750k

21 Principal Place of Residence Pros: No capital gains tax Reduced buy costs Cons: No depreciation Interest/costs arent tax deductible Easy to spend too much

22 Property Strategies Property Options Vendor Finance/Rent to Buy/Rent to Own/Wrapping/Lease Options Lease-back Overseas Property Granny Flats / Secondary Dwelling / Dual Income / Rent by the Room Holiday letting

23 Summary There are at least 22 residential property strategies All have pros and cons Dont take our or anyone elses advice on which to do – pick the right one for you! Get educated


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