1 Million to Spend

G

GoingBackwards

Hi All.

If you had a million dollars (including stamp duty) to spend on property in Australia, how would you do it, keeping in mind your ambition is to decrease your taxable income as much as possible as quickly as possible. You are also looking to sell them in about 2 years, so you are looking for the best capital growth.

Would you buy 2 properties varying in price (600K & 400K), 3 properties at 300ish each or take a punt on a 900k property in an area that you think in 2 years will return a substantial investment.

Off the plan with quick completion or an existing property.

All thoughts welcome.

Cheers.
 
If the goal is solely to decrease your taxable income, you should buy a brand new house in the best possible area which will most likely have a low yield, hence costing you a lot to hold hereby decreasing your taxable income.

Now, whether you should approach this with a view to reducing your income is an entirely different question. IMO this should not be your focus.
 
1 Mill borrowing and please let me clarify, when I say I wish to reduce my taxable income, I don't wish to simply throw money away in the attempt, but to use depreciation and standard processes associated with rental properties.
 
I will give you my bank account details in a PM if you like...

2 years you really should go shares or buy a crap load of regional properties and hope a mining boom happens lol.
 
No one can predict the capital growth, so this is something you will have to decide for yourself I am afraid. There are just too many crystal balls out there: Sydney has topped, Brisbane is Next, Sydney units are still to catch up, Melbourne is next, investors will shifts to other states or vehicles... pick one!

To maximise depreciation, you need to buy new. Of course you pay more for the stuff in the first place.

Looks like you are basically speculating on property prices increasing over the next 2 years. Remember property is a long term game. Of course you can take your chances over a couple of years, but you're going to need a lot of growth to just cover your entry and exit costs (stamp duty and fees + CGT). Just don't see it happening. But I guess if you had balls of steel, you could go out and buy new apartments in Sydney.... not that anyone would recommend this approach. I certainly would not do it.
 
Don't forget to factor in buying and selling costs for each property - even with great CG you'll struggle to come out in front after only 2 years.
 
As others have mentioned, I think property is a 5 year+ investment unless exceptional circumstances make it optimal to sell earlier. The t-costs associated with property investing are way too high for a shorter-term view imo.

I would avoid paying the "brand new" premium and instead look for something a few years old. You will still be able to get reasonable depreciation.
 
sorry for the dumb question. do you know about cgt and the depreciation taken out when you sell? Im guessing you are trying to get out of it by selling within 2 yrs?
 
GoingBackwards said:
Hi All.

If you had a million dollars (including stamp duty) to spend on property in Australia, how would you do it, keeping in mind your ambition is to decrease your taxable income as much as possible as quickly as possible. You are also looking to sell them in about 2 years, so you are looking for the best capital growth.

Would you buy 2 properties varying in price (600K & 400K), 3 properties at 300ish each or take a punt on a 900k property in an area that you think in 2 years will return a substantial investment.

Off the plan with quick completion or an existing property.

All thoughts welcome.

Cheers.
Click to expand...
You cannot be serious to get a serious answer to above questions, as nobody has a crystal ball.
In addition investing into real estate is a long term investment, not a 2 year plan?
I suggest you do some reading from this forum about the strategies people used, and whether you like any of them to follow or model upon....
Otherwise, how would you approach the Monopoly game?
I think most of us wish to increase the income, at least when existing the rat race, so we could live off them, right?
I would rather pay heaps of tax, knowing I am earing heaps, rather than making a loss, just to reduce the income, I sort off do not understand what you are trying to achieve?
Nobody knows all your personal circumstance thus cannot advice on such matters...
You need to answer that question yourself first, why do you wish to invest into property, and then follow from there?
 
Scott No Mates said:
Yep.

I'd be buying up big in those country towns which haven't moved much yet eg Brisbane and Adelaide :D
Click to expand...

Lol...I wouldn't quite say brisbane is a country town. Maybe about 10 yrs back yes I'd agree. It's progresses quite a bit since then and it's continuing to progress.

Adelaide, yep country town 10 yrs back and still is
 
I'll give another option. Use that $1m and do a small development.

It is one of the few ways to manufacture growth rather than hope for it.
It generally takes 1-2 years which is your time frame
You will end up with good depreciation
 
GoingBackwards said:
keeping in mind your ambition is to decrease your taxable income as much as possible as quickly as possible. You are also looking to sell them in about 2 years
Click to expand...

If that was the case, I'd be very content that my forum user name was extremely appropriate and put it all through the pokies.
 
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