Investment Property for $50 a Week
Do you have $50 to spare a week? Do you know that this little amount is all that may be required to help build your future? Not through bank savings, shares, superannuation or other methods but through property investment. Many believe that large sums of payment is required in order to be able to afford an investment property, however, this is simply a misconception.
Through negative gearing, owning one or more investment properties is not as expensive or as daunting as you would imagine. A surprising fact is that you may find that you may only need to be out of pocket $50 a week. Not familiar with negative gearing?
Negative gearing is a commonly used strategy amongst investors. It is a form of financial leverage. It is where the amount of money borrowed to purchase and maintain a property, exceeds the rental income generated from it. Investors can then proceed to claim tax deductions on the difference between the interest payments and the actual income. Such deductions along with the capital growth on the property can produce the potential to earn substantial gain.
An example of how this works, for under $50 per week, is shown below:
Total Property Cost: $404,250
ADDITIONS:
Expenses and Maintenance: $3 848
Interest: $20 981
Total Additions: $ 24 829
DEDUCTIONS:
Rental: $19 240
Tax Deductions: $4 297
Total Deductions: $23 537
DIFFERENCE: $1 292
Broken Down to Weekly Payments: $25
With a growth rate of around 6% this property will increase dramatically and produce an astounding growth figure of approximately $193 000 in 7 years.
This gain can be used towards things such as paying off a significant portion of your mortgage, in the future, or for use in building up an investment portfolio.
With Australia facing a housing crisis, it only makes sense that an increasing amount of everyday citizens, as well as professional investors are turning to residential property investment in order to reap the rewards.
The lack of accommodation within the nation is rapidly driving up home values in response to the demand. Thanks to negative gearing and the government's encouragement, through tax credits, it is even more possible to benefit from property investment. A weekly outlay of around $50 per week is all that may be required to provide a secure future for you and your family. Speak to an expert about how you can become involved in this investment opportunity.
Housing Undersupply
Australian property prices are reaching record highs as a direct result of a chronic shortage of housing being made available for the booming population.
New construction developments are currently not meeting the market demand at a fast enough pace which, in effect, is pushing up the prices of properties. This may be music to the ears of current home owners, however, it is also causing others to struggle with entering into the real estate market, due to the escalating prices.
An example of this situation in Queensland was commented on by Andrew Bell, CEO of Ray White Surfers Paradise, who said that, "Southeast Queensland was experiencing the worst land shortage in history...only supplying 26,000 lots annually despite demand for 45,000 lots. The supply of apartments was dwindling to the point that there would be no new developments bringing new stock on to the market at Main Beach, Surfers Paradise and Broadbeach in the second half of this year and into next.
He continued to say that, "Authorities call the current situation the 'Perfect Storm' lack of supply, difficult financing conditions, rising construction costs and high infrastructure charges resulting in land prices rising by 10 per cent."
"The South East Queensland Regional Plan predicts 300,000 new arrivals for the region over the next 22 years and we will need 143,000 new dwellings to house them.
"Yet broad acre undeveloped land is expected to provide only 32,000 dwellings and will run out by 2016.
"The underlying shortfall is already upon us. The southeast's population increased by 75,000 in 2008/09, requiring 30,000 new homes, yet only 17,000 were built."
Housing Industry Association (HIA) Senior Economist, Ben Phillips, stated that, "Australia's fast growing population is pushing new dwelling requirements to record high levels. Without the required new home building to keep up with underlying requirements house prices and rents are expected to continue pushing upwards through 2010."
"The necessary boost to housing supply is being held back by increased regulation, a slow and increasingly restricted building approvals process, and the same debilitating problems related to land supply, new home taxation, and skilled labour shortages that afflicted the industry last cycle," said Ben Phillips.
HIA predicts that the building of 152,000 properties will proceed in 2010, however this is dramatically under the number of 190,000 which is necessary to meet the increasing population.
Construction approval levels are at the lowest that they have been in 10 years. High rise sales are at record highs, with sales and demand far exceeding the level of production.
These alarming figures are being discovered throughout the nation and prove that there is an urgent requirement of a significant increase in housing development throughout Australia in order to accommodate the demand for the expanding population. Without this we can only assume that there will be little relief in the affordability crisis. Housing and rental prices will continue to rise above the grasp of many Australians. This will leave many of the population in a situation where it is nearly impossible to break into the market.
