Pretty common question. No real simple answer though as it comes down to your tax bracket, the age of the property, the type of loan you have & a few other things.
Broadly speaking though, with an investment loan and a property that still has ample depreciation left, the property should only cost you around $100 a week to hold (NET) . So, let’s call it $5,000 per annum to keeps things simple. If the property is worth say $500,000 then this property really only needs to make 1% in capital growth for you to break even. With proper research, you could buy within a suburb that consistently achieves above this return over a long-term period and make a few dollars along the way.
How to find a good area to invest in?
Our advisers like to keep things simple. Looking for areas with good population growth, close to transport options, close to the major cities & an area that has been doing what you need it to do for some time. If you look for the next best area, you make been taking on a little too much risk. Keep it simply. Play a long game, not a short game
Are houses better than units?
People seem to think they are, but it really comes down to the area and what the demographics of each suburb shows. For example, would you rather have bought a home 100 km’s from Sydney CBD 10 years ago or a unit in Newtown NSW 10 years ago? Most likely the unit. Smaller, easier to sell, & bigger return. In saying that, some houses are fantastic, you just need to do your research.
Feel free to reach out if you are wanting a second opinion.
This Gif always makes us laugh. Enjoy.