Every day I search the Brisbane property market for good investment properties for my clients.
Every Monday I send one out for free to give you an insight into how an investor finds and assesses properties.
Property of the Week #9 – 24th August 2015
Address: Glenridge Estate, Glendale, Toowoomba, QLD, 4350
Property Type: 3 Bedroom, 2 Bathroom, 1 Car House and Land Package (to be built)
Land Size: Variable
Listing: The estate website can be found here: http://glenridgeestate.com.au/
Listed Price: $363,800
Rental Return: $350 – $380 per week
Affordability: The estimated rental return and tax deductions ARE enough to cover the interest on the investment loans and all the rental expenses in full (when averaged out over a full financial year) so the property will cost you nothing to own and actually put $22 per week back into your pocket (calculated for an investor with an income of $50k/yr).
This strategy for this property focuses on capital growth and positive cash-flow. The positive cash-flow results from the additional tax benefits of buying brand new property.
High capital growth potential
Toowoomba ranks as one of Australia’s strongest regional centres, benefiting from a diverse local economy and proximity to the Surat Basin resources province. It has been recently ranked the jobs capital of Australia and as the leading regional economy in Queensland.
Currently Toowoomba has one of Australia’s strongest property markets.
On its own, the rental income from this property is not enough to cover all of your costs (mortgage repayments and rental expenses) directly. However, this negative cash-flow is then turned into positive cash-flow once you add the tax credits you receive from this property after claiming interest expenses, rental expenses and depreciation.
See a worked example in our Beginner’s Guide to Positive Cash-Flow Property.
The main reason this property is Positive Cash Flow is due to the large amount of tax deductions that come with buying a brand new property, namely: depreciation. These high levels of depreciation are only claimable when buying a brand new property, they are simply not available in an older property with nothing left to depreciate.
A note on house and land packages…
These brand new homes in well-located areas can offer a number of distinct advantages when compared to buying an established home.
- They tend to be competitively priced and offer a lower cost entry into the property market.
- Save a ton of stamp duty! On this particular house and land package at Glenvale you would save $7,203 in stamp duty. This is because when you are building a new house you are only paying stamp duty on the value of the land component, not the house and land components. Think of it as $7,000 of instant equity!
- When you purchase a house & land package you get to choose the most suitable block and customise the house design to suit your investment budget and goals.
- And all the usual benefits of buying a brand new property – depreciation and tax benefits, no maintenance, and often more reliable tenants.
Get the full details, analysis, and research…
Join the Property of the Week Club to get the full report on this property. It includes:
- The valuation report
- The rental appraisal
- Cost calculations for an investor earning $50k p.a.
- Profile of Toowoomba as a growth area
- Links to the resources we’ve used for our research