Please Note-
Everyone has different financial circumstances and you
should always seek the advise from a financial Advisor which he will
tell you what suit's your personal situation.
Your Home-
No tax benefits, no-one helping with the mortgage, you like the tenant
or tax man.You are fully responsible for the loan.
So let say for this example he decides to sell his home after the 10
year period.
Property Value
$800,000
Total owing
-$310,000
Total paid in interest to hold
-$248,500
After 10 years-
+$241,500
(As you can see I have not taken into consideration on stamp duty,
cost buying and selling cost or running expenses, as we will do the
same for the Investment example).
He would have come out with ahead $241,500.
Now lets consider an Investment property portfolio.
Get
your first Investment in Year 1 for $350,000.
Lets say contribution to the Investment(I'm going to be conservative with $100/week when it should only be
approx $70-$80 depending on taxable income, I'm am also going to give
you the worst possible scenario where the rent never increases at all
and it will cost you the same to hold the investment at $100/ week for
the 10 year period)
In reality as years go by inflation does increase and so does the
rental and your property should be neutrally geared after a few years.
Now because you want to build a portfolio, on the 3rd year you
purchased
your 2nd investment and on the 6th year you purchased your 3rd
Investment.
Selling all 3
Investments
Taking out, your weekly contributions on each property for the last 10
years,
paying out the debt to the bank, paying your Capital gains tax you
would be left
with a total profit of approx $493,167.00
Even if you sold 2 of the last Investments and kept one property (the
first one)
You would be left with a $700,000
property with only a $41,000 debt on it with a rental of approx $500/
week leaving you $440 positive rental.
Now remember this is just an example and we all
know property does not increase every year in a straight line, it does
go up and down.
Now what I want you to do is think if this couple had a home with
equity in it
and kept the Investments, they would have an Investment portfolio of
around
2 Million and if they had a 10% growth that year they would make
$200,000 in
equity and I could show them how to live the life of a very
comfortable lifestyle.
What I have taught you here is so important to
understand how powerful property investment can be when done properly
and when leverage is used.
If you have a question to ask me
please email me at dino@npis.com.au.
If you would like
me to sit down with you on my next interstate trip please book yourself in
now.
Your Home-
Get
your first Investment in Year 1 for $350,000
