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Buy property and you can save money

In most cases the biggest hurdle when buying a property is the significant upfront costs, being the deposit and stamp duty. However, once these expenses have been paid it is often cheaper to own a property than it is to rent one.

Take the below example, a two bedroom, two bathroom, one carpark apartment at Zen - Therry Street, Melbourne. Ongoing yearly costs for an owner/occupier consist of owners corporation fees, water rates, council rates and loan repayments totalling $36,400* annually. Compared to a tenant who pays $730p/w to rent the same apartment totalling $37,960 annually, the owner/occupier is better off saving $1,560 each year.

Live
2 bedroom, 2 bath, 1 car $750,000
Expenses
Owners corporation fees $6,700
Water $800
Rates $1,300
Interest $27,600
Total $36,400
Rent
Weekly Cost $730p/w
Yearly total $37,960

 

On top of this, the owner/occupier’s apartment is increasing in value. Since completion in 2012 apartments at Zen have increased by an average of 5.66% p/a, which in this example is $42,450 in capital gains each year.When investing in property, choosing an apartment that will deliver good rental returns, strong capital gains and one that is likely to be leased quickly is vital.

The current example of a two bed, two bathroom, one car park apartment at Zen, a tower that has seen between 0 and 1% vacancy since it was settled, is a great investment opportunity.

Yearly expenses for a property investor leasing this apartment would total $38,777. With an annual rental income of $37,960 the yearly outgoings total $817.

With negative gearing, these outgoings can be used as a tax deduction to reduce an investor’s taxable income**. Depreciation of assets within the apartment is also tax deductable. A depreciation schedule can be made available upon request for a fee.

Investment Analysis
2 bedroom, 2 bath, 1 car $750,000
Expenses
Owners corporation fees $6,700
Water $800
Rates $1,300
Property management fees $2,377
Interest $27,600
Total $38,777
Income
Rental income $730p/w
Total $37,960
Appreciation
Capital Gains (5.66%) $42,450
Annual expenses $38,777
Annual income $37,960
Total yearly outgoings $817 

 

We are confident we can match anybody with their perfect property. Enquire below to receive a range of owner/occupier or investor friendly apartments currently for sale in the CBD and inner-Melbourne.

 

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Investor
Owner/Occupier






* Figures based on loan of 80% totalling $600,000 at an interest rate of 4.6%

** Always consult your accountant for tax benefit

Disclaimer: The information published on this site and brochure is of a general nature only and does not consider your personal or investment objectives, financial situation or particular needs. Information is based on historical data and past performance is not necessarily indicative of future results. Melcorp Property Pty Ltd does not hold an Australian financial services or credit licence and cannot provide any endorsement, recommendation or suggestion about any information or products displayed on this site and brochure. We strongly recommend that you obtain independent advice before you make any financial decisions using the information or investment tools contained on this site and brochure, and we make no warranty as to the accuracy, completeness or reliability of the information or investment tools, nor do we accept any liability and responsibility arising in any way from omissions or errors contained on this site and brochure.