Cashflow Analysis of New Vs Established Property Investment
26th of September, 2014
Topics Covered in this presentation are:
- With better depreciation deductions and a superior return on new stock, an investor can more easily service their property portfolio.
- The construction costs on a new 2 bedroom apartment are just as much if not more than a 3-4 bedroom project home.
- You cannot depreciate the land component. With older houses, the majority of the purchase price is represented as land value.
- For income earners on the higher marginal tax brackets, holding a portfolio of new residential property will have minimal impact on their after tax cash flow.
- For the same after tax cost, you can hold a significantly larger portfolio of new residential apartments compared to older houses.
- It is also pertinent to mention LAND TAX. With apartments, the land component is smaller. You can often hold a larger portfolio of apartments before you run into land tax implications. It is also noteworthy that Land Tax is a state based tax, so diversifying between the states over time is also a good strategy.
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