I Told My Client to Say ‘No" to an $8,000 Cashflow Property Deal. Here’s why.

I work with investors all the time who can’t wait to get into their next deal, but who don’t know quite what to look for.

This was the case with Michelle, who already owned two properties and was considering a third.

The property on her radar was a brand new one-bedroom apartment plus study located in the Sydney CBD. The building was new and very luxurious, with high-end amenities including an on-site gym, 24-hour concierge and rooftop garden.

With the projected rents and depreciation, her 10% deposit and the relatively low fixed-rate interest rate that her bank was offering, the property was going to be positively geared to the tune of around $150 a week.

There was also a rental guarantee in place for the first two years.

I’m always wary of rental guarantees so I looked into the deal and discovered that the projected rents were actually on par with what the market could support. So, the estimated returns were quite accurate.

Still, I advised my client to walk away from the deal.

Why? Because my client and her husband were a young, professional couple who were planning an imminent move to London.

Living in the UK, they’ll pay UK taxes… and all of the Australian tax benefits of this deal willmean nothing. The benefits of depreciation, for instance, rely on them being Australian taxpayers.

As a result, property that was returning $150 a week would return very little, as most of positive cash flow was comprised of tax savings, not genuine rental surplus.

We worked out that Michelle would be better off investing in a low maintenance house that was positively geared without accounting for depreciation.

She found an established house that returned $80 per week before depreciation and $130 after depreciation, so it much more comfortably fit in with her future plans.

This is a perfect demonstration of why you shouldn’t make investment decisions based purely on the tax benefits. It’s also a great illustration of how one deal could be ideal for one investor, but completely wrong for the next.

This is why you need to create your own personal strategy to guide your investing decisions.

And that’s what Real Wealth Australia teaches our clients to do.

“Get Started in Building a Substantial ‘Cash-Rich’ Property Portfolio – Book a Property Action Call Today”

If you would love to have a ‘clear direction’ in growing your property portfolio…so you feel confident and in control…

If you don’t have a clear written plan to reach your specific financial goals over the next 5-10 years…

And, if you want to ‘speed things up’ so you can reach your financial goals much quicker….

Then your next best step is to book a Property Action Call, with one of my personally trained coaches…

In your property action call you will…

  • Discover how you could ‘tailor’ my ‘10 properties in 10 years™’ investing system…to yourpersonal situation 
  • Get a clear ‘snapshot’ of where you are now financially…so you feel clarity and confidence moving forward in leaps and bounds
  • Discover property investing mistakes that you may be making…that are hidden from your view.

And much more.

I value this call at $295. But it’s yours free because I want to ‘jump-start’ your investing.

The only catch is there are currently only a handful of spots available in the coming week…and they will go quick.

Click here to claim your complimentary Property Action Call now….

REA-Strip-3

Share this post

Share on facebook
Share on google
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email

Become a successful Property Investor

Start Here With Your Free Investment Gift Pack Valued at $297

Get one step closer, Fill in the form below

  • This field is for validation purposes and should be left unchanged.

More from Real Wealth Australia

Articles

My top 2 areas to invest in during the current market!

If you are in the market to buy property right now, then I have some news for you. In today’s video (blog), I’m going to …

Blog - The Next Boom Cycle Is Coming... Prepare Yourself
Articles

Post COVID-19 Property Boom Cycle is coming… prepare yourself!

The Corona virus pandemic is in the process of trashing property prices by possibly up to 30% according to some and when it’s over be …

How to invest and prosper in uncertain times
Articles

How to invest and prosper in uncertain times

Most of us have gone from living our lives, going about our business, taking care of our homes, to a level of uncertainty that caught …