How much will I need?
You don’t have to be wealthy to invest but you do have to invest
to be wealthy....
The biggest surprise for most people is how little it costs to buy and maintain an investment property. This is because with an investment property you have 2 people helping cover the overheads; the tenant (with OzInvest’s 10 Year Leaseback this is guaranteed) and the taxman.
Making the Most of Your Income
Property investment isn’t forced saving like superannuation, but a method of using rental return, asset growth and taxation benefits to build levels of wealth which the average income earner can’t accumulate over a lifetime from normal after tax savings.
Your income (and home equity) work for you rather than you working for them.
Financing Your Investment
There are two standard ways of securing a loan to finance your investment.
The first uses your home equity and is the choice for most investors. The beauty is that it doesn’t cost you a single cent up-front. Banks and financial institutions will normally lend the full amount for an investment property if you have 20-30% equity in an existing property you own (Eg: your property is worth $400,000 and the loan is only $280,000 - that gives you 30% equity to use to invest) and a regular income to help service the new investment loan.
The second method is a cash deposit of 10% plus purchase costs (approx. $50,000 deposit to purchase a $350,000 property) and a regular income to help service the new investment loan.
Alternatively - if you don't have any of the above, an approved guarantor (such as a parent with equity in their own home) can also help you on the track to purchasing an investment property by allowing you to borrow against their equity so you don't need a cash deposit.
How Much do I Need?
The golden rule of property investment is to borrow as much as you can-naturally within your ability to service the loan. This is based on the principle of good debt; being debt that generates wealth.
The idea is not to pay off the ‘capital’, but to pay the ‘interest only’, which is fully tax deductible. How much you borrow will of course depend on the property you choose and your financial strategy.
OzInvest will guide you through this process and provide you with a qualified Property Consultant and Finance Specialist to determine the investment level appropriate for you.
Our Average Property Price
We sell new properties in the median price range of Australian homes between $300,000 and $500,000. This ensures our properties are priced in the middle of the market to attract the maximum number of tenants looking to rent, as well as the maximum number of buyers should you want to sell in the future.
Crunching the Numbers
We’ve put some numbers down to show you how it all adds up.The below example is based on a property worth $412,720 - a brand new 4-bedroom house and land in Littlehampton, Adelaide. We’ve set the interest rate at 6.45% pa and calculated the taxation benefit (negative gearing) on a salary of $85,000 pa. The weekly cost for this scenario is only $43 per week.
Click on the image to see the full spreadsheet calculations
click on the image to see full spreadsheet calculations
# This is an example scenario only. A personalised calculation can be provided to you
based on your individual circumstances upon request.
A $43 per week ($6 per day) Investment in Your Future
This is just an example of how little it takes, in real terms, to secure your financial future.
With interest rates as low as they are, rental income increasing and the OzInvest 10 Year Leaseback securing the rental return - it all adds up to an opportunity too good to miss.
What is Negative Gearing?
The key to your investment property is negative gearing.
The taxation department allows you to add up all the costs of buying and maintaining your investment property, including interest payments, and deduct those costs from the properties rental income.
When the outgoings are greater than the income the property is negatively geared, these costs are deducted from your pre-tax personal income, reducing your marginal tax rate and effectively subsidizing the cost of your investment.
So you pay less tax while at the same time your equity in the property grows as its capital value increases.
 10 Year Rental Guarantee
One of the greatest concerns investors have is what happens if the property becomes vacant?
Under OzInvest’s exclusive ‘10 Year Leaseback Guarantee’ you have nothing to worry about because we become the primary tenant and pay you rent at the market rate regardless of whether the property is occupied or vacant.
Since the scheme was introduced in 1998 not a single client under leaseback has lost a single days rent.
It Gets Better and Better as Time Goes On.
As the rent grows each year the tenant contributes more, so the longer you hold the property the lower your actual percentage of outgoings. It’s the perfect medium to long term investment strategy.
Money Makes Money
Why is nearly 60% of our business repeat business from existing clients?
Because they know what wealthy people have always known; the secret to building wealth is to leverage your assets.
Once you’ve got a foot in the door it’s simply a matter of time before you’re in a position to leverage the equity in your first property and expand your portfolio. The richer you get, the easier it gets.
What does it cost me to use OzInvest?
Ask Oz ?
Free call 1800 800 775 for obligation-free and independent advice, or email ‘Ask OZ’ and we’ll answer all your questions on the safe & easy way to invest in property.
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