Overseas Investor
Australian Historical Real Estate facts
Mortgage Calculator
A proven strategy for property investment to build up your portfolio of real estate in Australia.
Step 1
Choose a property to purchase and pay $1000 to reserve the unit.
Step 2
On signing of the contract, pay 10% of the contract value into a trust account.
(This trust account can't be accessed by either party and functions -- so to speak -- as a bank guarantee for the developer to arrange for his financing of the building -- on establishment of the trust account, the $1000 deposit of step one will be reimbursed!)
Step 3
Now nothing is paid until the completion of the building.
(During this time, the monies in the trust account is accumulating interest in accordance with the financial institutions arrangements. This could be up to 10% per annum!)
Step 4
At settlement date, the remaining cash deposit is to be paid. Now the unit is officially yours and you are able to make the necessary arrangements to generate an income.
(Depending on your financial circumstance, a bank will give you 70 to 80% of the purchase price in mortgage monies. Most investors would have to pay at the time of settlement an additional 10% of funding.)
Step 5
Wait for capital gain to accumulate.
(During this time you preferably don't want to make an income gain as this would be considered taxable income. Any shortfall in the balance between your income and your expense -- mortgage payments, body corporate payments, council rates, etc. -- can be used at a later stage to reduce your existing taxable income payments or to offset any capital gains tax, payable only when and if you sell the property.)
Step 6
Now comes decision time, where you have to decide if you sell the property and cash out
-- however now you would have to pay capital gains tax --
Or
If you refinance the property and re-use 80% of the increased equity to purchase your next property!
-- No capital gains tax would be payable --
Now you can repeat steps 1 to 6 as desired to build up your Australian Property portfolio and to maximise the capital gains potential.
Step 1
Choose a property to purchase and pay $1000 to reserve the unit.
Step 2
On signing of the contract, pay 10% of the contract value into a trust account.
(This trust account can't be accessed by either party and functions -- so to speak -- as a bank guarantee for the developer to arrange for his financing of the building -- on establishment of the trust account, the $1000 deposit of step one will be reimbursed!)
Step 3
Now nothing is paid until the completion of the building.
(During this time, the monies in the trust account is accumulating interest in accordance with the financial institutions arrangements. This could be up to 10% per annum!)
Step 4
At settlement date, the remaining cash deposit is to be paid. Now the unit is officially yours and you are able to make the necessary arrangements to generate an income.
(Depending on your financial circumstance, a bank will give you 70 to 80% of the purchase price in mortgage monies. Most investors would have to pay at the time of settlement an additional 10% of funding.)
Step 5
Wait for capital gain to accumulate.
(During this time you preferably don't want to make an income gain as this would be considered taxable income. Any shortfall in the balance between your income and your expense -- mortgage payments, body corporate payments, council rates, etc. -- can be used at a later stage to reduce your existing taxable income payments or to offset any capital gains tax, payable only when and if you sell the property.)
Step 6
Now comes decision time, where you have to decide if you sell the property and cash out
-- however now you would have to pay capital gains tax --
Or
If you refinance the property and re-use 80% of the increased equity to purchase your next property!
-- No capital gains tax would be payable --
Now you can repeat steps 1 to 6 as desired to build up your Australian Property portfolio and to maximise the capital gains potential.
Welcome to the world of Real Estate Investment!
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