14A Tollerdown Street

Davoren Park SA 5113

The Road to Positive Gearing.
The Road to Positive Gearing. If you have considered investing in real estate, you have probably heard of positive gearing. This is where you are making money over your expenses. The sooner a property is doing this for you the better!. Well, here is a potential opportunity for you. This property offers two separate homes bringing in $200 and $180 respectively per week and both are currently tenanted. One side is a three bedroom home with a single bathroom, one living room and a kitchen/dine with its own back yard. The other is the same except it only has two bedrooms. Anyway, looking at this as a potential investment property, and having discussed the matter with your personal advisors, this surely is worthy of consideration. Lets say each side is rented for 50 weeks each year and that 20% of your income is consumed by costs. On these assumptions, your net income would be $380pw x 50 weeks x 80% equals $15200. If the purchase price was $310,000, then stamp duty would be $11,830 being a total of $321,830. If you put down a 20% deposit you would then need to borrow $257,464. Lets assume that you access an interest only loan for 5 years, then you would paper 4.99% (as at 7/11/14) meaning interest would be $12,847 pa. You can then see there is the potential to be ahead by in excess of $2000 per annum Clearly there are many, many variables in this simple example and I have left out some of these such as depreciation, purchase costs etc. You would need to check how your personal circumstances change this equation. Please note that real estate agents are not qualified to financial advice. Anyway. Take a chance and come and have a look. It may or may not suit your circumstances, but don't die wondering.