The 5 Principles for buying property.

Principle 1: Don’t wait until you’ve paid your home off.

For many people it is possible to pay off up to three properties in around the same time as it would normally take to pay off just one, using the rapid repay system.

Principle 2: Use other people’s money to pay for it.

House Land Co educate buyers how to buy extra houses with little extra money.

Your tenants can pay around 60-70% through rent.

The tax man can pay 20-25% through tax deductions your share can be as low as $20 a week.

You only pay the balance – as little as 10-20%. This can often be covered by the money you save on your mortgage using rapid repayment methods.

Principle 3: Gearing (tax dollars are yours, use them or lose them).

Nearly all costs of owning your investment property are 100% tax deductible.

Your tax deductions can generally be around $35,000 per year.

- loan interest fees and change

- repairs and maintenance

- letting fees advertising etc.

- rates insurance

Principle 4: Leverage (a tiny amount can have huge returns)

Your $20/week controls a property worth $400.

So, let’s say your property value increases at 10% PA on a $400,000 property that’s $40,000 a year in your pocket.

Side note – the figure of 10% for illustrations only – historical averages are 6-8% between 1992 and 2018.

Principle 5: Compounding capital growth.

Australian National median house prices (Source – Australian Bureau of Statistics house price index year 1960, 1970, 1980, 1990, 2000, 2010, 2019.) save on average Australia property values have doubled every 10 years.

*Past performance of the property market is strong indicator but is no guarantee of future performance.

Compounding growth (assumes value double every 10 years).

NOW

LOANS $350K VALUE = 700,000

VALUE $350K VALUE = 700,000 = 0 EQUITY

10 YEARS

LOANS $350K VALUE 350K. = 700 ,000

VALUE $700K VALUE 700K = 1,400,000 = $700,000 EQUITY

20 YEARS

LOANS $350K $350K = 4700,000

VALUE $ 1.4M $1.4M = 4,800,000 = $2,100,000 EQUITY 

This booklet contains explanations of some proven financial and property concepts. These examples are for the purpose of explanation only. We are not licenced to provide financial advice and as such are not in a position to give any advice in regard to your individual circumstances.