Anxious about rumoured changes to negative gearing on investment properties?
How a change may affect the value of your investment?
The value of your investment does not depend upon the availability of negative gearing although, if available, negative gearing does reduce the net cost of ownership.
Like me, you invested to create wealth for retirement or another important financial milestone in your future. Whilst taxation allowances and rental income are important they do not affect the value of your investment, rather, they reduce the cost.
If you have done the research and chosen a location which had all of the ingredients to produce a growing demand plus continuous improvement as the result of local, state and federal government initiatives, the value of your property will increase over the years.
Price growth is the product of demand.
Having chosen the right location is not the end of the game. At the moment of truth (when for sale or valuation by a lender) your property has to compete with others of a similar type and size within a 5 kilometre radius.
If you have employed a professional property manager, he or she will have monitored the behaviour of tenants and encouraged you to provide some features attractive to good tenants.
If tenant turnover is low that is a good sign. If not, you must find out why because a competent property manager and good tenants who treat your property like their own home are the life blood of your investment.
When you get to sell do it because yours is one of the best maintained properties in the district.
From what I have learned from the ‘experts’ in the press, negative gearing will not apply to new properties if it is changed by either party in government.
So, my advice is – buy new and take advantage of negative gearing to reduce the cost of your investment and maintain those suggestions above.
I currently offer my advice free of charge through the medium of a ten minute phone call, Skype or Facetime discussion. If we both agree that we need to meet to discuss your needs further we agree on a time and place for the next meeting, again at no cost to you.
Don Duncan F.A.I.M.
Don is the Principal Consultant at Mediwealth Australia, with over forty years experience in developing successful residential property investment strategies, and extensive experience in the financial sector, Don is uniquely qualified to provide you with the best property investment advice available. He is supported by experienced property investment consultants in both Brisbane and Sydney.
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