The majority of Iron Bridge property investors/owners will have experienced many, or all of the following factors in play with their investment property(ies) and family home over recent years.
- Purchasers between 1998 - 2003 have experienced capital growth on their investment property(ies) as well as their family home of between 50% and 100%.
- Those getting started since 2003 will still have enjoyed capital growth of 10% - 13% per annum every year for the past four years.
- Many investors (“locked in”) 2 and 3 year interest rates at 6.75% to 7.5% in 2004 and 2005 but these fixed rates are coming to an end. Those that locked in their loans for longer periods will be the most relaxed at this point in time.
- Those coming off fixed rates will now find similar fixed rate terms - 2-3 years at 9.25% - 9.10%, which are the best rates in the market today, with the mainstream banking institutions.
- Our early investors will have enjoyed rental increases up to $140.00 per week more than what was originally illustrated in the property investment analysis supplied at the time of purchase. $10 and $20 annual increases are still being achieved where appropriate.
- Occupancy levels will have remained very high throughout the entire life of the investment to date, and the demand for quality executive style property remains strong.
- You will have been bombarded with doomsayers for four years (or more) now, and they start to get to you after a while. Doubt creeps in. A number of our investors sold in 2004 to “lock in” the capital gain. This was usually on “professional” advice and with hindsight now looks slightly misguided.
We have had a few investors come to see us concerned that they are contributing several hundred dollars per week more to their investment property than was originally illustrated. We are very keen to meet with anyone who is concerned about this. However, we generally find they have forgotten they were receiving the extra sum in their regular pay of $6 $10,000 p/a by way of IR23B tax deductions solely, because of investment property ownership.
Without the investment property, their personal tax commitment would be much larger, and their net take home pay reduced.
Most established investors are now neutrally or positively geared.
Dateline: August 2007
