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So dramatic. It’s never New vs Old. It’s Deal 1 is better than Deal 2 for your circumstances, your situation and your strategy. Deal 1 can be new or old. Great things can be built new like - dual occupancies, rooming, townhomes etc. that help the housing crisis, economy and create jobs.
I always had this contention that most of the property clubs, property gurus and buyers agents are just resellers and agents of developers and builders. They always push you towards apartment units or new developments and never consider old established properties though they claim to consider all properties
Your depreciation explanation was rather limited. In the current environment and 50% CGT discount, you should depreciate capital. When you depreciate capital yearly, it actually reduces your cost base so when you eventually sell you will have more capital gain. However, with 50% CGT it actually means you are still ahead than if you didn't depreciate at all. Buy new house/land for 800K of which house cost 400K to build. Hold for 10 years and then sell for 1500K. Without depreciation, your initial cost base around 800K, your capital gain is 700K, with 50% CGT discount you have 350K taxable. If depreciate for 10yr, you get 100K offset against income over 10yr, your base cost is 700K, your capital gain is 800K and with 50% CGT you have 400K taxable. However, as long as your tax rate is less than 50% (which everyone's is no matter how much income you earn), you will always be ahead. However, this IS NOT a reason to purchase new property as you will only end up a small amount ahead. BUT, in every case you will always end up ahead depreciating while we have a 50% CGT discount and even $1000 in your pocket instead of the taxman's is better. Whether you use that benefit wisely and not squander it will determine whether you should depreciate. As well understanding depreciation and what you can expect after paying capital gains is critical for planning ahead.
That’s what I did in 2016 and now in 2024 I have 4 investment properties. My nice you get one it’s a lot easier to build capacity to get the next one 👍
7:25 A Accountant arguments i have heard is that yes you pay back depreciation in future like in your example. the accountant arguments is you benefit in today dollars and you have to pay it back in future inflated dollar that worth less. Just need to account for it when selling.
If u not good with your hands or what has to be done by qualified people or don’t have vision of what a room or house can look after renovations don’t try it
Some good points but hardly 💯 accurate. I bought in pimpama back 2016 brand new off plan, never had a single drama or gone more than a week without tenants. It’s doubled in price and provides a reasonable rental return. It’s more about the right deal and if you’re wanting to make gains you need to do your homework and research or trust someone to do it for you. I’ve tried both ways and can’t complain. Sure there’s been bumps or interesting times with interest rates and such but property is a long game unless you are good with your hands and can renovate places. I am not, so I stick to my lane.
Sorry I still don’t understand. My parents went from Guildford Wa to bushmead (neighboring suburb). They went from an old house to a ‘new house’ built in 2021. They wanted to downsize. Would this be a big no no long term?
Hi PK, love your data driven content. There are bad eggs in the real estate industry in general, however house and land packages are not necessarily bad. Areas like The Ponds and Kellyville in Western Sydney have more than doubled in the last 10 years and these were sold as house and land packages back then (2013-2014). So - like your argument for buying established properties where most houses in the area are owner occupiers and not investors, buying house and land in the same location can be beneficial. Especially when you save $10-20k in stamp duty which can be used for your next purchase. In saying this, not ALL house and land packages are good, just like not all established properties are good. Big developers are usually smarter than most people and will only develop in areas where government is spending money on infrastructure. Yes, they can charge more and artificially increase prices but I'd like to think that most established houses since the 1990s were built this way...
@@waTATsiwaIt really depends on the deal at that point in time. I purchased a new HL package in a growth corridor area based on my affordability, and its value has almost doubled in just about 2 years. Maybe it was luck! That said, I agree with PK-be cautious if buyer’s agents are pushing HL. It’s always a good idea to contact the developers directly and beyond what’s being offered by agents.
The wealth people are making has come off the back of Aussies...It is not right that foreigners take the wealth that they did not create and are not rightly entitled to.
PK, if everyone thinks like you, then who’s going to buy new IPs? There’s not going to be many houses built and the rental crisis will only exacerbate. I’m all for building new but perhaps investors of such properties must be given more incentives to make it worthwhile.
Read your comments. Most people that watch your show are investors including myself… I have 4 properties the best ones is the of the plan new property. Remember this is a long term investment buy now with positive or zero and 0 growth gives you an asset payed by someone else!!! New properties are not bad because our population will ALWAYS keep growing… Brisbane!!! SEQ!!!
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Very true. That's how I did. He is very authentic and honest. The most trusted source information. Respect and application you as always. ❤❤
So dramatic. It’s never New vs Old.
It’s Deal 1 is better than Deal 2 for your circumstances, your situation and your strategy.
Deal 1 can be new or old.
Great things can be built new like - dual occupancies, rooming, townhomes etc. that help the housing crisis, economy and create jobs.
Excellent video.
Had the same experience trying to deal with buyers agent sometime back
Pk, what you mentioned about a Financial Advisor selling new HL packages happened to us. And you’re 100% right
Great video PK. Such gold in your words.
I always had this contention that most of the property clubs, property gurus and buyers agents are just resellers and agents of developers and builders. They always push you towards apartment units or new developments and never consider old established properties though they claim to consider all properties
Another excellent video - very honest and useful information he got every time . Thanks PK
Your depreciation explanation was rather limited. In the current environment and 50% CGT discount, you should depreciate capital. When you depreciate capital yearly, it actually reduces your cost base so when you eventually sell you will have more capital gain. However, with 50% CGT it actually means you are still ahead than if you didn't depreciate at all. Buy new house/land for 800K of which house cost 400K to build. Hold for 10 years and then sell for 1500K. Without depreciation, your initial cost base around 800K, your capital gain is 700K, with 50% CGT discount you have 350K taxable. If depreciate for 10yr, you get 100K offset against income over 10yr, your base cost is 700K, your capital gain is 800K and with 50% CGT you have 400K taxable. However, as long as your tax rate is less than 50% (which everyone's is no matter how much income you earn), you will always be ahead. However, this IS NOT a reason to purchase new property as you will only end up a small amount ahead. BUT, in every case you will always end up ahead depreciating while we have a 50% CGT discount and even $1000 in your pocket instead of the taxman's is better. Whether you use that benefit wisely and not squander it will determine whether you should depreciate. As well understanding depreciation and what you can expect after paying capital gains is critical for planning ahead.
I'm newbie here. I bought my HL two years ago in WA. The price have gone up 250k we
Great advice all around. Can you please explain “you payback depreciation when you sell” is a CGT thing?
@@tonybrisbane6396 would like to understand this too
Pk always great content keep it up thanks
I love your content mate thankyou
Is there a scenario where you would buy new to take advantage of first home owners grant? Like build a duplex with it or something
That’s what I did in 2016 and now in 2024 I have 4 investment properties. My nice you get one it’s a lot easier to build capacity to get the next one 👍
I totally agree aim for rarity aim for value add
PK, how old are you referring to? 10-15 years old?
7:25 A Accountant arguments i have heard is that yes you pay back depreciation in future like in your example. the accountant arguments is you benefit in today dollars and you have to pay it back in future inflated dollar that worth less. Just need to account for it when selling.
If u not good with your hands or what has to be done by qualified people or don’t have vision of what a room or house can look after renovations don’t try it
100% on the money here PK
Land and house package won't go up a lot in the future
Some good points but hardly 💯 accurate. I bought in pimpama back 2016 brand new off plan, never had a single drama or gone more than a week without tenants. It’s doubled in price and provides a reasonable rental return. It’s more about the right deal and if you’re wanting to make gains you need to do your homework and research or trust someone to do it for you. I’ve tried both ways and can’t complain. Sure there’s been bumps or interesting times with interest rates and such but property is a long game unless you are good with your hands and can renovate places. I am not, so I stick to my lane.
Sorry I still don’t understand. My parents went from Guildford Wa to bushmead (neighboring suburb). They went from an old house to a ‘new house’ built in 2021.
They wanted to downsize. Would this be a big no no long term?
Hi PK, love your data driven content.
There are bad eggs in the real estate industry in general, however house and land packages are not necessarily bad.
Areas like The Ponds and Kellyville in Western Sydney have more than doubled in the last 10 years and these were sold as house and land packages back then (2013-2014). So - like your argument for buying established properties where most houses in the area are owner occupiers and not investors, buying house and land in the same location can be beneficial. Especially when you save $10-20k in stamp duty which can be used for your next purchase. In saying this, not ALL house and land packages are good, just like not all established properties are good.
Big developers are usually smarter than most people and will only develop in areas where government is spending money on infrastructure. Yes, they can charge more and artificially increase prices but I'd like to think that most established houses since the 1990s were built this way...
doesn't have to be so extreme as I had bought HL packages and they had doubled in value in about 10 years time.
That’s actually pretty poor given many houses have doubled just last 3 years. Huge opportunity cost.
@@waTATsiwaIt really depends on the deal at that point in time. I purchased a new HL package in a growth corridor area based on my affordability, and its value has almost doubled in just about 2 years. Maybe it was luck! That said, I agree with PK-be cautious if buyer’s agents are pushing HL. It’s always a good idea to contact the developers directly and beyond what’s being offered by agents.
To much hate on buyers agents we get it
The wealth people are making has come off the back of Aussies...It is not right that foreigners take the wealth that they did not create and are not rightly entitled to.
PK, if everyone thinks like you, then who’s going to buy new IPs? There’s not going to be many houses built and the rental crisis will only exacerbate.
I’m all for building new but perhaps investors of such properties must be given more incentives to make it worthwhile.
Hey PK, what do you think of Binvested?
He is coping him
@@yuliaschannel6288 what?
@yuliaschannel6288 Binvested are a buyers agent. With PK's course, you don't need a buyers agent.
Avoid
@@yuliaschannel6288they buy units. We don’t.
Read your comments. Most people that watch your show are investors including myself… I have 4 properties the best ones is the of the plan new property. Remember this is a long term investment buy now with positive or zero and 0 growth gives you an asset payed by someone else!!! New properties are not bad because our population will ALWAYS keep growing… Brisbane!!! SEQ!!!