Where are your properties?
- Thread starter WASP
- Start date
i personally don't have any experience in development. However, my parents are builder/developer overseas, if that counts
it was/is combination of
Luck, buying at right time and right property
Listing/learning from successful investors
and having right team on board (broker, town planner, builder and developers/investors)
we have been saving every dollar we can for last 2 years to fund property acquisition cost and DA Fees.
3 IP's in Miles, Surat Basin, Qld, total cost $1 million, total weekly rent $2800
Interesting read. 18 months have passed, couple more to add since:
1 x Coodanup WA + building at rear
1 x Chigwell TAS
1 x Claremont TAS
1 x Sandy Bay TAS
+ Looking in QLD for SMSF.
Some of the numbers here look really impressive, nicer still if the LVR's are low! I'm still in acquisition phase, my LVR is nothing to write home about.
Caulfield North
Carnegie
Mentone
Looking for next, recently looked into the Brisbane market things move to fast when you interstate. Would like to diversify at some stage.
Our own backyard seems to be easier at the moment so maybe Bonbeach or Carrum Or maybe West such as Footscray or west Footscray, Seddon
Thoughts on these areas
Carnegie
Mentone
Looking for next, recently looked into the Brisbane market things move to fast when you interstate. Would like to diversify at some stage.
Our own backyard seems to be easier at the moment so maybe Bonbeach or Carrum Or maybe West such as Footscray or west Footscray, Seddon
Thoughts on these areas
First post-Woo Hoo! this looks like as good a place as any!
My portfolio:
Inner West Sydney- 3 bed House (PPOR)
Bondi NSW- 2 bed unit
Carlingford NSW- 2 bed unit
Campbelltown NSW- 2 bed unit
Mt Druitt NSW- 2 bed unit
Southport QLD- 1 bed unit
Albury NSW- 3 bed house
Edens Landing QLD- 3 bed duplex
Mount Warren Park QLD- 3 bed townhouse
Will add another 3 this year.
Great forum this one- some real experienced cats in here!
Cheers all
My portfolio:
Inner West Sydney- 3 bed House (PPOR)
Bondi NSW- 2 bed unit
Carlingford NSW- 2 bed unit
Campbelltown NSW- 2 bed unit
Mt Druitt NSW- 2 bed unit
Southport QLD- 1 bed unit
Albury NSW- 3 bed house
Edens Landing QLD- 3 bed duplex
Mount Warren Park QLD- 3 bed townhouse
Will add another 3 this year.
Great forum this one- some real experienced cats in here!
Cheers all
Merrylands NSW @ 3K CF + Taxable
Mount Druitt NSW @ 4K CF + Taxable
Dubbo NSW NRAS @ 9K CF+ Tax Free
Orange NSW NRAS @ 10K CF+ Tax Free
Elanora Heights NSW NRAS @ 7K CF+ Tax Free
Fairy Meadow NSW NRAS @ 8.5K CF+ Tax Free
Alderley QLD NRAS @ 7K CF+ Tax Free
Windsor QLD NRAS @ 7K CF+ Tax Free
Taringa QLD NRAS @ 8K CF+ Tax Free
Brunswick VIC NRAS @ 6K CF+ Tax Free
Ballarat VIC NRAS @ 8K CF+ Tax Free
Bendigo VIC NRAS @ 8K CF+ Tax Free
Orange x 2 - on the boil... NRAS @ 10K CF+ Tax Free each
In a nutshell, with each property producing between 15-25K of deductions ( from CF losses and depreciation) the portfolio produces about 200K of deductions per year for the next ten years, give or take. Effectively, this allows me to earn up to 220K and using those deductions and current tax laws, I'd have an actual assessable income of 20K, so I'd basically be paying next to no tax on the 220k of salary and I'd also be earning over 100K tax free on top of that from the NRAS credits....
To achieve this - I have used high LVR's and taken advantage of the NRAS cash flow to maximise how leveraged I can be safely. I use 95% lending on everything. Which is really 92% + LMI, so I invest 8% deposits and stamp duty on each purchase. I have invested @ 350K for these 10 NRAS properties in the portfolio, and by producing @ 100K Tax free after all expenses are catered for, the Return on that 350K of equity is around 28.57% Tax Free. That is before any Capital Growth is accounted for...
By Year 5, with conservative incremental increases to the NRAS credit of 4% per year ( it has averaged 5.4% since implementation) and 4% rental increases ( also 5.4% since implementation) and assuming interest rates don't move too much (which is why I have 4-5 year fixed rates of around 5% or less on these deals) the total CF+ amount will have reached @ 122K CF+ Tax Free, or a Tax Free ROE of @34.85%. Plus Salary . If 5% increments were achieved, the result would be $127.6K, or 36.46% Tax Free ROE. Plus Salary
Using the same 4% theory, by Year 10, it should be in the vicinity of 150K CF+ Tax Free which would represent a 42.85% Tax Free Return on Equity. Plus Salary. If 5% increments were achieved, the result would be $162.9K, or 46.53% Tax Free ROE. Plus Salary
Looked at another way - These 10 properties put the mechanics in place to earn over 3.2 Million in Tax Free money ( 320K per year) in the next 10 years, having invested 350K. And That is after all costs have been accounted for in the ownership of the properties, and before any capital growth has been assumed. And how much did I put in every week to hold on to the portfolio? NIL. Or every month? NIL... or every year? NIL, NADA, ZERO.
Worst case - If I wasn't generating as high an income, the result would be less, as I'd have to forego some of the neg gearing from the substantial pre tax losses ( cash flow and depreciation) but even under those circumstances the properties would still produce great tax free dollars... and whatever income I was earning would still be completely tax free...
The simplest example of how this works for a more modest income is this.... for someone on 80K taxable income who has 200K of equity available, the purchase of 3 NRAS properties could reasonably be expected to produce 60K of deductions ( remember- each property should produce close to 20K of deductions. Typically, 20K is about right) which would reduce ,or go very close to reducing, their assessable taxable income to below the 18.2K tax free threshold. But they still have the CF+ NRAS to account for, and while the CF+ outcome for the first property will be higher ( say 7-8K) than the results for the 3rd and 4th ( say 5K each) , because the neg gearing component is affected by the lower marginal tax rate on the 2nd and 3rd purchases ... the fundamental strategy works the same - that particular 80K income earner has now effectively reduced their assessable taxable income to ZERO ( or close to) and has also generated about 16-17K ( conservatively speaking) in tax free income.... increasing each year for the next 10 years....so they are now on almost 100K tax free, effectively.
And with that money, that 100K tax free income earner can set about making very short work of their mortgage, then re-leverage to buy more properties in the coming years, and keep their assessable income tax free forever more by adding the right properties ( non NRAS by this stage) as required. And the amount coming from their pocket every week? NIL. Every Month? NIL. Every Year? NIL.
I dont see how any other way that somebody on 80K who is serious about getting beyond a couple of properties in their lifetime can achieve as much, as quickly, as safely...
Mount Druitt NSW @ 4K CF + Taxable
Dubbo NSW NRAS @ 9K CF+ Tax Free
Orange NSW NRAS @ 10K CF+ Tax Free
Elanora Heights NSW NRAS @ 7K CF+ Tax Free
Fairy Meadow NSW NRAS @ 8.5K CF+ Tax Free
Alderley QLD NRAS @ 7K CF+ Tax Free
Windsor QLD NRAS @ 7K CF+ Tax Free
Taringa QLD NRAS @ 8K CF+ Tax Free
Brunswick VIC NRAS @ 6K CF+ Tax Free
Ballarat VIC NRAS @ 8K CF+ Tax Free
Bendigo VIC NRAS @ 8K CF+ Tax Free
Orange x 2 - on the boil... NRAS @ 10K CF+ Tax Free each
In a nutshell, with each property producing between 15-25K of deductions ( from CF losses and depreciation) the portfolio produces about 200K of deductions per year for the next ten years, give or take. Effectively, this allows me to earn up to 220K and using those deductions and current tax laws, I'd have an actual assessable income of 20K, so I'd basically be paying next to no tax on the 220k of salary and I'd also be earning over 100K tax free on top of that from the NRAS credits....
To achieve this - I have used high LVR's and taken advantage of the NRAS cash flow to maximise how leveraged I can be safely. I use 95% lending on everything. Which is really 92% + LMI, so I invest 8% deposits and stamp duty on each purchase. I have invested @ 350K for these 10 NRAS properties in the portfolio, and by producing @ 100K Tax free after all expenses are catered for, the Return on that 350K of equity is around 28.57% Tax Free. That is before any Capital Growth is accounted for...
By Year 5, with conservative incremental increases to the NRAS credit of 4% per year ( it has averaged 5.4% since implementation) and 4% rental increases ( also 5.4% since implementation) and assuming interest rates don't move too much (which is why I have 4-5 year fixed rates of around 5% or less on these deals) the total CF+ amount will have reached @ 122K CF+ Tax Free, or a Tax Free ROE of @34.85%. Plus Salary . If 5% increments were achieved, the result would be $127.6K, or 36.46% Tax Free ROE. Plus Salary
Using the same 4% theory, by Year 10, it should be in the vicinity of 150K CF+ Tax Free which would represent a 42.85% Tax Free Return on Equity. Plus Salary. If 5% increments were achieved, the result would be $162.9K, or 46.53% Tax Free ROE. Plus Salary
Looked at another way - These 10 properties put the mechanics in place to earn over 3.2 Million in Tax Free money ( 320K per year) in the next 10 years, having invested 350K. And That is after all costs have been accounted for in the ownership of the properties, and before any capital growth has been assumed. And how much did I put in every week to hold on to the portfolio? NIL. Or every month? NIL... or every year? NIL, NADA, ZERO.
Worst case - If I wasn't generating as high an income, the result would be less, as I'd have to forego some of the neg gearing from the substantial pre tax losses ( cash flow and depreciation) but even under those circumstances the properties would still produce great tax free dollars... and whatever income I was earning would still be completely tax free...
The simplest example of how this works for a more modest income is this.... for someone on 80K taxable income who has 200K of equity available, the purchase of 3 NRAS properties could reasonably be expected to produce 60K of deductions ( remember- each property should produce close to 20K of deductions. Typically, 20K is about right) which would reduce ,or go very close to reducing, their assessable taxable income to below the 18.2K tax free threshold. But they still have the CF+ NRAS to account for, and while the CF+ outcome for the first property will be higher ( say 7-8K) than the results for the 3rd and 4th ( say 5K each) , because the neg gearing component is affected by the lower marginal tax rate on the 2nd and 3rd purchases ... the fundamental strategy works the same - that particular 80K income earner has now effectively reduced their assessable taxable income to ZERO ( or close to) and has also generated about 16-17K ( conservatively speaking) in tax free income.... increasing each year for the next 10 years....so they are now on almost 100K tax free, effectively.
And with that money, that 100K tax free income earner can set about making very short work of their mortgage, then re-leverage to buy more properties in the coming years, and keep their assessable income tax free forever more by adding the right properties ( non NRAS by this stage) as required. And the amount coming from their pocket every week? NIL. Every Month? NIL. Every Year? NIL.
I dont see how any other way that somebody on 80K who is serious about getting beyond a couple of properties in their lifetime can achieve as much, as quickly, as safely...
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What a fascinating read.
My list is short by comparison (but hopefully not for long)
May 2013 - 2 b/r villa - Umina Beach, NSW (IP)
June 2014 - 4 b/r house - Gorokan, NSW (IP)
No PPOR as of yet as I am not prepared to call any other place other than the Inner West of Sydney home, and prices are out of my range for now.
My list is short by comparison (but hopefully not for long)
May 2013 - 2 b/r villa - Umina Beach, NSW (IP)
June 2014 - 4 b/r house - Gorokan, NSW (IP)
No PPOR as of yet as I am not prepared to call any other place other than the Inner West of Sydney home, and prices are out of my range for now.
Is the elizabeth one a semi? Rent is a bit low for standalones.
Judging by the year 2011 and the price, probably a semi
Yep its a semi. Has been $205 for a while.
Paid a fraction too much, I think, for Whyalla.
Canberra looks to be softening at the moment, and I think if I had to re-let, I'd probably have to drop the rent a bit. (Its in Holt and I think there has been a fair bit of construction in the area lately)
Wow you really dived head first in to NRAS and it seems to be working great for you. I probably should have look to investigate this more a couple of years ago, a pity the last round has now been canned by the government.
Thats not to say that there are no more NRAS properties coming onto the market. From what I hear there are still plenty of licences out there.
