Another interesting and emotional property thread going i see. I...

Another interesting and emotional property thread going i see. I thought i would put some input and just for the fun of it i will make my calculation and comments neither bear or bull but put a calc.

I will show how much a investment property has to grow per annum so an investor breaks even. Lets say someone is in the 31.5% tax bracket, so earning less than 80k.

Lets purchase a $480,000 property with a 10%+costs deposit.
leaving a debt of $432,000. Interest costs at 7% are $30,240.

Rental at 3.8% would be $18,240 or $350 a week, this is conservative based on actuals.

Negative gearing gap is $12,000, with the tax deduction net cost is $8,220.

The breakeven point is 1.7%, hence if property is 8.5% higher in 5 years, you would have lost or gained much at all.

Just thought that was an interest calc to ponder. By the way its just back of envelope so it's not perfect but yeah you get the jist.

Enjoy people and keep smiling :) whether your a property bull or bear.