Monday, December 1, 2014

New Homes for Brisbane Property Investments

By Colin James


(Brisbane) Latest figures for property values in Brisbane City have home owners giggling all the way to the bank, as the statistics indicate that property values are on trend to extend by 2.2 percent every year.

Investment property guru Micki Holder claims that the projected phenomenal growth in Queensland real estate values is inciting many of us to invest in the property market,"There is a distinct market for speculators wanting to buy quality homes which will serve as investment property. First time stockholders abound, however they have done their homework and there is an expectation that rental yield will be positive, if not downright competitive. Investing in house and land packages is a highly attractive option. "

Holder asserts that uncertainty is a big element that holds many potential real estate investors back, in particular there is doubt around repairs and maintenance costs,"Buying a rental property in a serious demand area nearly guarantees low vacancy rates, however the capability for high fix costs on existing housing stock is the big unknown. "

"Making a capital gain is a driving factor for some financiers, who plan to retire off the profits of a rental property that they have paid down over a period of 20 years or so". Holder asserts that good rental yield and capital gains do not always co-exist, however she explains that house and land packages address many of the chance factors presented by older housing stock,"Many of our clients come to us for confirmation that purchasing an investment property in a blue chip area of the town is not a financially responsible action to take. They are extraordinarily shocked at this analysis, given the increases anticipated in capital gain projected over the lifetime of the investment, say 20 years. "

Capital gains tax and the cost of maintaining an older property located in a blue chip area can make dreadful inroads into any increase in property value. Holder says that having a spotlight on rental yield from house and land packages shifts the perspective away from capital gain.

An annual rental yield of 6 percent is common for the properties that Holder presents to her clients. Holder says that a 20 to 25 % deposit will be enough to get a foot in the door, with many properties being paid off over the course of 20- 25 years. However , Holder says that with rental yields providing a competitive investment, many of her clients choose to have a low debt ratio and live off the rental proceeds,"Generating retirement income from a new home is viewed as really low risk by our clients," announces Holder.




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