is this a good investment strategy?

[TMNT]

I dont agree with it, but he seems convinced, and seems quite convincing

His income 200k
He likes to buy. Properties less then. 7 yrs old, doesn't really care about location, and buys property based on ddepreciation, he thinow depreciation will outgrow capital growth, since he is on the high end tad bracket

And he also has bought a new apartment just after it has settled fRom a distressed buyer after their valuation came up bad

 

[MsAli]

whose "he"?

 

[pinkboy]

Its quite a good strategy:

He buys all the duds and leaves the better deals to real investors!

Perfect


pinkboy

 

[MTR]

I think this is the Investor Club Model, get him to join their group they have plenty of this stuff. I would not be touching though

 

[TMNT]

whose "he"?

One of my friends!!

Well he didn't buy at bargain price
He actually paid pretty much what the otp price was

His other investments were also purchased at market

I've not heard many good investors buy for a tax reduction as its generally frowned upon

But doing the figures it doesn't seen to be that bad
Where cg is a bonus

 

[Terry_w]

I dont agree with it, but he seems convinced, and seems quite convincing

His income 200k
He likes to buy. Properties less then. 7 yrs old, doesn't really care about location, and buys property based on ddepreciation, he thinow depreciation will outgrow capital growth, since he is on the high end tad bracket

And he also has bought a new apartment just after it has settled fRom a distressed buyer after their valuation came up bad

How can anyone comment from the info given? Sounds like he is just focusing on the tax side and not on whether it is a good investment or not, but we don't have all the info.

 

[TMNT]

How can anyone comment from the info given? Sounds like he is just focusing on the tax side and not on whether it is a good investment or not, but we don't have all the info.

That's exactly my point

He doesn't care about location or quality of property

He is only focused on depreciation, at his income He believes that depreciation outweighs cg

Hence my original question on whether it'd a good strategy

To me it's like buying an expensive tv to get credit card points

 

[Noknee]

Personally I agree

 

[scha9799]

I think good or bad is depend on his goal.

Everyone has their very own goal.

If he enjoys his job and doesn't care paying premium on the property, it's his choice, if he is happy with it, then it's a good choice.

Nothing wrong.

I guess for many of us, investing in property means to leave the day job, early retirement, spend more time traveling less time on a job......

 

[devank]

He may do well better than someone doesn't do anything at all!

 

[D.T.]

His goal is to pay less tax and he's succeeding in that. Therefore successful.

 

[Asheam]

Really depends on what the yield on the properties is and the amount of depreciation he is able to claim.

Does 47% of the depreciation claimed exceed the rental loss from the property? If so, it might give a slight cash flow benefit.

He does realise though that depreciation is an actual cost incurred and eventually items / property need to be replaced..?

 

[robbiejuve]

Early in my journey I saw an accountant and he didnt think much about my plans to buy in a capital city. He told me to buy brand new in butt F nowhere (doesnt matter where) like he had so I could get maximum depreciation on a new dwelling.

Didn't make sense back then and it still doesn't though I like depreciation on what I do have in capital cities.

 

[SWS]

Strategy on a strategy ... working backwards on the end result - what about using the tax return to pay down the debt - becomes cash flow positive further down the track?

Held long enough possibility of capital growth too?

My thoughts only ...

 

[MTR]

Strategy on a strategy ... working backwards on the end result - what about using the tax return to pay down the debt - becomes cash flow positive further down the track?

Held long enough possibility of capital growth too?

My thoughts only ...

Well fortunately/unfortunately he purchased a property from someone whose value was bad Don't try this one at home kids.

If there is only one good thing that Steve McKnight did it was to make the average Australian investor realise that there are strategies to property investing other than losing money each week.

 

[TMNT]

Well the original point ideas trying to ask was not whether is his goal for a tax reduction possible but

Do people see say a 20k tax reduction over 7 years for example, that's 3k per year
On the higheSt tax bracket it's 1500 per year reductio. In tax for example worth it?

Assume the property is worth 300k and he paid that much for it

Its an extra 0.5% extra bang for your buck every year

But I guess If you buy a property that increases in value by 1% more per year, then you are 3k in front

I guess I've just half answered my own question

For me id only usr this strategy if my income was in The top two brackets and if I was going to buy in the area anyway

 

[MTR]

Well the original point ideas trying to ask was not whether is his goal for a tax reduction possible but

Do people see say a 20k tax reduction over 7 years for example, that's 3k per year
On the higheSt tax bracket it's 1500 per year reductio. In tax for example worth it?

Assume the property is worth 300k and he paid that much for it

Its an extra 0.5% extra bang for your buck every year

But I guess If you buy a property that increases in value by 1% more per year, then you are 3k in front

I guess I've just half answered my own question

For me id only usr this strategy if my income was in The top two brackets and if I was going to buy in the area anyway

I think I now see what you mean.

My answer is no, it is not a strategy I would use, the figures quoted are not attractive, regardless of tax bracket.

 

[TMNT]

I think I now see what you mean.

My answer is no, it is not a strategy I would use, the figures quoted are not attractive, regardless of tax bracket.

update: he called me last night, and gave me the 'good news" that he bought a brand new student accomodation, cannot live in it, 2bdr, price $250k, unilodge I think I heard him say, rents for $400+ per week (i had swithced off by then), and he gets a crapload of depreciation, so his tax bill is down down down


I havent picked up my jaw off the ground yet

 

[Singo]

Your friend may come across this thread one day. I hope he won't mind

 

[TMNT]

Your friend may come across this thread one day. I hope he won't mind

dont worry, ive invested in a helmet!