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A Report On The Investment Property

Decent Essays
Property Description
The investment property I have decided to purchase is located in West Launceston at 1/11a Duke St the property is a 2 bedroom single bathroom unit, the bedrooms are fairly large compared to a regular bedroom. The property is valued at $299,000 on Realestate.com.au. The property shows great appeal as it has large rooms and a nice outdoor area. This property is also appealing to someone who wants to rent it because it is fairly close to town roughly 1km south of the town it’s definitely a possibility for a walk into town. The house also has multiple supermarkets nearby.

Loan Payments
If I bought this $299,000 property at a discount of 5% for a price of $284,050 and I paid 10% of that number for deposit then I would
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Higher gear ratio’s can be used better.

A positively geared property is a property is a property that is turning in more money then being payed for example, say you buy a $300,000 property and you have to pay $400 a week for all the costs, etc but you charge $450 a week rent. This makes the property positively geared as you are making a profit from it. The advantages of positively gearing a property are the increasing of your income, the more money you make means the more money you can use on paying for other things that you would otherwise struggle to pay for. A disadvantage of positively gearing would be that the profit you make is taxable so you will have to give some of the money up.

Scotty Reitsema Page 2 10/09/15
Negatively gearing for example is when say you buy the same $300,000 property and you still have to pay $400 a week for all the costs, but you charge $350 a week for rent so you would be running at $50 loss per week. The advantages of negatively gearing an investment property is that it’s tax deductible, this keeps investors mildly happy about running at a loss. Another advantage of negative gearing is that it’s much more affordable making it easier to secure tenants for a longer time. There are much more financial risks in negatively gearing a property, say you lose your job you might find it very difficult to cover the costs of negatively gearing, also say all of a sudden you have a big bill or have to pay for something like a funeral
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