Investing in high rise CBD apartments?.....

[barney8]

I have no idea on this area of property, so have avoided thus far when thinking about a property investment. But I find it quite difficult to find any type of impartial advice on the matter.

What makes a good property decision on a CBD unit?

I've found a lot of RE agents do not like them(probably because of exclusive agency rights on them..ie they cannot sell them so steer you away from them).

How does everything work with depreciation, when do you see capital gains? do you? what sort of returns?

cheers

Barney

 

[vaughan]

I have no idea on this area of property, so have avoided thus far when thinking about a property investment. But I find it quite difficult to find any type of impartial advice on the matter.

What makes a good property decision on a CBD unit?

I've found a lot of RE agents do not like them(probably because of exclusive agency rights on them..ie they cannot sell them so steer you away from them).

How does everything work with depreciation, when do you see capital gains? do you? what sort of returns?

cheers

Barney

It all depends on your investment strategy. That is, how do you plan to make money?

The two income streams are rental returns, and capital gain. Most strategies will rely on both, but remember that capital gain occurs after you sell, and only if you make a profit. Which means your strategy must have an exit strategy.

The amount of capital gains is anybody's guess. Right now in many places the property values are declining after having enjoyed boom times. The folks that bought in 2008 at the top of the market are still waiting for their promised "double every 7 to 10 years" growth, or half of it.</sarcasm>

Regarding depreciation: this is a tax break, as is negative gearing. A good investment should not rely on tax breaks to be effective.

Also, a lot of people seem to miss the fact that depreciation gets added back on to the capital value after the sale, and will therefore affect the capital gains tax payable.

 

[Aaron_C]

Also, a lot of people seem to miss the fact that depreciation gets added back on to the capital value after the sale, and will therefore affect the capital gains tax payable.

True but the gain is halved so it's actually not too bad.