no. 2 how to build real wealth with property - an easy guide for beginners - 02
TRANSCRIPT
An easy guide for beginnersPart II
Investing in propertyHow does it work?
Why property!
• Keep more of your earned income
• Enjoy a better lifestyle
• Accelerate your capacity to save & build wealth
Nuts & Bolts
1. CASH FLOW1. CASH FLOWHOW MUCH WILL IT COST?
= Money In (rent)
– Money Out (expenses)
+ Money Back (tax benefits)
2. NET WORTH2. NET WORTHARE YOU IN A BETTER FINANCIAL POSITION IN 3, 5, 10+ YEARS?
Two things to consider
= The value of your assets
less what you owe
$450,000
Total (CASH OUT)
$27,852Total (CASH OUT)
$27,852
Total (CASH IN) $19,365Total (CASH IN) $19,365
$5,224
Running Expenses
$165 per week
• CASH FLOWCASH FLOW
$22,628
Interest@ 6.0% pa
You have to put in an extra
Rent$380 per week
Cash shortfall - ($8,590)Cash shortfall - ($8,590)
CASH DEDUCTIONSCASH DEDUCTIONS
Construction costs
Fixtures & fittings
Loan & legal setup costs
Cash shortfall($8,590)
NON-CASH DEDUCTIONS
NON-CASH DEDUCTIONS
($18,428)($18,428)TOTAL DEDUCTIONSTOTAL DEDUCTIONS
TOTAL (NCD)($9,838)TOTAL (NCD)($9,838)
$5,625
$3,733
$480
• TAX BENEFITSTAX BENEFITS
Total rent (income) – Total deductions (Interest, Rental expenses, Depreciation (Bld & Fittings), Loan costs
$13,050
TAX
$65,000
$46,572 $7,520
Tax RefundTax Refund $ $ 5,8305,830
• TAX BENEFITSTAX BENEFITS
Tax Tax VariationVariation$112 per week$112 per week
cash backcash back
$18,428 Total Deductions
Your contribution
$54
$165Cash shortfallTax refund
$112
INVESTMENT PROPERTY
• TAX BENEFITSTAX BENEFITS
INVESTMENT PROPERTY Who Pays?
• TAX BENEFITSTAX BENEFITS
Tax ManTax ManYouYou
TenantTenant
TEN YEAR SUMMARY
$450,000
$733,00$733,003*3*
$377,125
Increase in your net worth
Looking a lot better!
Capital Capital GainGain
• NET WORTHNET WORTH
* Growth of 5% and Inflation of 2.5%
LifestyleThis is the life!
Other people have become wealthy with property so can you!
Now you know.
Find out how you can start today.
Contact: Don Hannay