Real Estate Investment Case: QLD House & Land Package
Today, let me share the story of a couple investing in a House & Land Package in Queensland, aiming to benefit from tax advantages and asset growth simultaneously.
This couple, in their early 30s, is taking their first step into real estate investment, leveraging stable incomes and future growth potential.
1. Family Background
The couple lives in Sydney and is raising one minor child.
Currently, they are paying $700 per week in rent but dream of owning their own assets.
Fortunately, both have stable incomes (husband earning $110,000 annually and wife earning $100,000 annually) and have managed to save $180,000.
With this, they decided to invest in a $720,000 House & Land Package! 🏡
2. The Blueprint of Their Investment Plan
The purchase price was $720,000, and they used 20%, or $144,000, from their savings as the deposit.
The remaining $576,000 was financed through a loan.
Including stamp duty ($28,241) and other setup costs ($10,000), their total upfront cost came to approximately $182,241.
The couple believes that Queensland’s real estate market, with its emerging developments, holds great potential for future growth.
3. Expected Benefits of the Investment
1️⃣ Tax Savings – Utilizing Negative Gearing
They used the Negative Gearing strategy to offset investment losses against taxable income.
- Annual expenses totaled $62,864, including depreciation ($16,000), loan interest ($36,864), and operational costs ($10,000).
- Projected rental income is $750 per week → $39,000 annually.
As a result, they incurred an annual $23,864 loss, which led to tax savings of approximately $7,600.
2️⃣ Asset Value Appreciation & Equity Leverage
The Queensland real estate market shows strong potential for value appreciation thanks to new development areas.
- Assuming an annual 8% growth, they could build approximately $120,000 in equity after 2 years, which can be leveraged for future investments.
3️⃣ Potential for Passive Income
As they gradually pay off their loan, rental income will turn into net profit.
If weekly rent increases to over $1,000 in 10 years, they can enjoy a steady stream of cash flow.
4️⃣ Inflation Hedge
Real estate typically appreciates with inflation, increasing both asset value and rental income.
This allows them to preserve the value of their money and enhance financial security.
5️⃣ Diversified Investment Portfolio
With high-paying jobs, the couple already has a stable income portfolio.
By investing in real estate, they reduce reliance on stocks or cash assets and strengthen the stability of their portfolio.
4. The Couple’s Long-Term Dreams
This couple hopes their decision will go beyond a simple investment.
- Income Growth: They anticipate higher earnings as their careers progress.
- Asset Expansion: They plan to use this investment as a springboard for a second property or a family home.
- Tax Savings: They continue to benefit from annual tax reductions through Negative Gearing.
- Security: They are building assets that can withstand inflation and economic fluctuations.
5. A Word of Caution
Of course, risk management is key in any investment.
- They must prepare for potential interest rate increases or delays in expected value appreciation by maintaining a financial buffer.
Conclusion
This scenario is a perfect investment strategy for a high-earning couple in their early 30s.
It enables them to take advantage of tax benefits, build wealth, and envision a stable future cash flow through real estate.
We hope this case inspires others in similar situations to consider their own investment journey!
Wishing you all happiness and success in your real estate endeavors.