My IP story so far

Hi,

I am doing my family tax returns, and feel like sharing the numbers of our property investment so far.

IP1:
Melbourne South East (3B+study,2B,2C)
Price: $270K on 2008. Current value: $380K
Total holding costs after tax: $20K. $3K - $3.5K per year. Last year was $1K and positive this year due to lower IR.
Annual Growth: 5.86%

IP2:
Western Sydney (4B,2B,1C)
Price: $377K on 2010. Current value: $500K
Total holding costs after tax: $10K. $2K per year. Last year was neutral and positive this year due to lower IR.
Annual Growth: 7.31%

We also have a PPOR but I don't include it in any calculation (although it has served well for the IP deposits).

As you can see the returns are very average, but there is no way we would be able to save $230K in 6 years while raising our family (my wife took 2 years off work to stay with the children during their first year).

I work full time (100K - 120K) and my wife works part time (25K - 30K) with 2 young childrens (6 and 4). So, your tipical family with an ok, but not great income for Sydney.

For those starting, don't expect to get rich overnight and be aware that those stories in the magazines are exagerated. However, property investment is a great way to secure a financial future.

Now looking for IP3 in Brisbane.
 
Well done roberto. It is interesting that you calculate "total holding costs" But equity growth figure is realistic when holding costs are factored in as well. Keep us updated.
 
thanks for posting up Roberto, good work! Quick question, does that include depreciation on the properties for your losses each year?
 
Thank you for the comments.

thanks for posting up Roberto, good work! Quick question, does that include depreciation on the properties for your losses each year?

Yes, I claim depreciation and borrowing cost evry year, so the paper losses are bigger than the holding costs after tax. For example, this year the holding cost before tax of IP1 (i.e. Rent - Interest - Expenses) was $2600, but after claiming borrowing cost of $1100 and depreciation of $4200, I ended up with a cash surplus of $500. So no cost whatsoever to hold the property,

Singo said:
Well done roberto. It is interesting that you calculate "total holding costs" But equity growth figure is realistic when holding costs are factored in as well. Keep us updated.

Thanks, I track closely the holding costs, because that is the money we need to pay out of our pockets to keep the property,and we could be using it for something else. Thankfully, dur to the low interest rate environment, for the past two year we have had Zero holding costs and even small surplus. Happy days at the moment, but I am aware it could change in the future.
 
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