renting : dead money ?, page-2

I'd be the first to agree that there are all sorts of strategies around investing in property to create wealth .

While I still think for the vast majority of people buying a normal house is the best way to go , it is true that there are options.

That said , for a ' property expert ' he has left out a fair bit of detail imo .

E.g. He is comparing more ' average properties ' against higher end stuff in terms of return . He mentions the average mortgage rate and yet doesn't mention the average rental rate for that luxury house . Sure , you can rent a quality house cheaply at the moment , relatively speaking , but you can't do that forever . He is using the low end of the rent average for that luxury house .

Right now , that mortgage would be costing you 80k a year and may well do that for a couple of years yet . That's a 40k saving pa . Big difference.

Assuming a net return on the rentals of 4% ? Loss before tax 60k . Loss after tax 30k . That's means you've got to be earning 250k plus . That only applies to about 5% of Australians ( ABS figures ). Hardly typical .

CGT . Doesn't attempt to calculate the difference between the two . Especially if your on 250k plus . That could be a big tax bill .

The 30k per year rent figure . How about buying another 500k house to live in rather than attempting to live beyond your means .

Lastly , while I'm sure there are many $1.5mill houses for rent , it's hardly the typical situation for most of us .

From Chris Gray's website " Chris is also the CEO of Empire, an independent consultancy that builds property portfolios for time-poor investors. "

Hmmmm , I wonder how much he charges ?