2/50 Menin Drive

Brighton TAS 7030

The developer can do this because firstly the demand for new rental homes close to the Brighton Transport Hub is good and there are many reasons why people want to live in this area. So lets say the max the property can be rented for at some stage is $295.00 per week then the developer will pay the difference between the $450.00 less the $295.00 leaving a short fall of $155.00 per week and this is paid directly to you.
The developer has been in business for over 40 years and will deposit $10,000 into a lawyers trust account and the contract of sale shall explain the guarantee.
The market over a five year term will become stronger because young families are forming and need to move from their parents house.
So as a Landlord and assuming you are in the following category
A generic example could be:
You work and earn say $75,000 before tax each year
The tax on $75,000 is around $17,500 leaving you with around $57,500 or $1,105 per week to use as you please
Rental Income on the House is $450.00 per week
Agents Fees are 10% of the rent = $45.00 (2,340.00 Per Year)
Land and Water rates $3,200 per year
Investor insurances $920 per year RACT (Royal Auto Club Tasmania)
Interest on the loan at say 5% per year = $19,495.00 ($374.90 per week appx)
Total Costs per year to hold the investment = $25,591.00
Rental Income $19,760.00
Shortfall $5,831.00
Tax will cover around $3,500 of the shortfall and can be deducted from your tax taken each week so the real costs to you to own an investment property is around $2,331 per year ($44.83 per week appx)
So in Summary
Your gross income is $75,000 (it all gets much less expensive the more you earn)
Rent guaranteed for 5 years
Stamp duty and Legals covered in purchase price
Your expected cost is under $50.00 per week
When I started showing people how to do this in around 1981 the houses were about $45,000 and renting for $45 per week today that same house (33 Ceres Street Cranebrook near Penrith NSW) is worth around $750,000 and rents for $750 per week)
The government leaves the tax use in place because it assists with the supply of houses to the rental market and takes significant burden from the government housing demands.