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Our Strategy How It Works

When investing it is important to realise each individual, couple or family are at a different stage in life and therefore have unique goals and ambitions. Investing means getting the money you have worked hard for, to work for you. There are numerous ways to invest but at Property Investment Services Group our passion is investing in property. As property investors ourselves, we live and breathe property, and have teamed together with some of Australia’s most savvy and experienced industry professionals to help you realise the potential of property investing.

We like to view Property Investment Services as a group of educators, rather than just another company selling investment properties.Our clients are important to us and we seek to develop and maintain long term relationships with them. Our aim is to still be working with you years on from your first purchase.

Investment properties can provide substantial benefits to the lifestyle of you and your family. We understand that each investor has their own goals and we aim to work closely with you to implement a strategy that suits your individual needs.

Our belief is that everyone should consider the option of property investing. Many of our clients began with the belief that they could not afford to invest or that the risk was too high. Clients who deemed property investment “too risky” now look back and say they should have brought property 10 years ago. While it is never too late to buy an investment property, the longer the wait, the more growth you essentially miss out on.

Historically Australian house prices have doubled every ten years, meaning a house purchased in 2001 for $300 000, could statistically be worth an approximate $600 000 in today’s market. Using this statistic we assume that the average investment property grows by 100% over a ten year period. Therefore a property purchased today for $470 000 could have doubled in value in ten years’ time.

However, not every suburb receives the same growth. While on average all do grow, there are many that outperform the rest. At Property Investment Services Group we believe that certain areas in Australia have the ability to exceed the market averages in the next 20 years.

The benefits of building your investment property are

  • Minimal stamp duty payable. You only pay stamp duty on the land content of the purchase, not the building.
  • Interest payments on the construction loan are tax deductable.
  • Having a new building means maximum depreciation is allowed
  • You have time near the end of construction to source tenants so your property can earn rent from the day it is finished.
  • You would qualify for the $10,000 building boost grant (available between 1st August 2011 & 31st January 2012 ) Note: This is for building in Queensland only.

The reason for our long term approach to property is 3 fold.

1.) Taxation benefits: There are numerous taxable deductions available from the Australian Government to those that own an investment property and rent it out. Tax deductable expenses include interest payments, depreciation, all associated holding costs including property management fees etc. any costs incurred with holding the property that are above the rent you are receiving for the property becomes a tax deduction against your salary. This benefit makes it very worthwhile for people to own an investment property. Assuming you are receiving $500Pw in rent, over one financial year that is $26,000 received. However, if the holding costs are $30,000 per financial year including interest on your mortgage, you can now claim $5000 against your taxable income. Given this, if you earn a $50,000 salary, you will now only pay tax on $45,000. Add the depreciation deductions to this at say $17,000 for the first year; you are now only being taxed on $28,000. These tax deductions are a significant ongoing benefit when owning an investment property.

2.) Investors don’t purchase property to earn rent; the rent purely creates a viable avenue for you to help pay your investment off over time. Investors purchase property to achieve and realise significant capital gains. Over time as your investment property grows in capital value you should accrue enough equity to be used for a deposit for your next investment property if you should desire it. By realising the equity and borrowing against your first investment property, you are effectively using your capital growth to invest further without paying tax. This is achieved because you don’t pay tax (Capital Gains Tax) on your investment until it is sold. If you hold your investment for a 12 month period or longer you should receive a 50% Capital Gains Tax Discount.

If a property is purchased for $470,000, then kept for 5 years and sold for $750,000, you will have a Capital Gain of $280,000. As the property was kept for more than 12 months, you now only pay your marginal tax rate of that financial year on $140,000. (note no purchase or sale costs have been factored in to this example).

3.) You can access your equity (Subject to financial approval) without having any tax liability which means you have more money to re-invest and grow your property portfolio a lot faster than buying and selling.

 
   
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