Are Investment Properties Completely Goated Relative to Other Investments?

I'd rather buy an apartment near the CBD/my workplace, than buy a house 1.5 hours away in the middle of bumble(profanity). But apartments don't appreciate like land, therefore aren't good investments.

If I want to use the first home buyers scheme, I have to still live in the house for 1 year, which sounds stressful. Even assuming I complete my year of hell, and begin renting out my property, the rent most likely won't cover the mortgage. So for 30 years, I'd be pissing away like $200 per week. BUT the big advantage of a house, is that if you live in it for a few years you can sell it with NO capital gains.

Compared to shares, which incur a capital gains tax, when you sell them. Half off capital gains (if held for more than a year) is worse than no capitals gains. Plus shares are more diverse, house prices are pretty much determined by how desperate Indian immigrants are, and how rich Chinese immigrants are. If they decide "(profanity Australia", and move to an actual good country, my investment would be completely (profanity).

So, to maximize my wealth I'm forced to play into this (profanity) country's ponzi scheme. (Profanity) Australia.

Shareholders, how do you justify paying like 20 percent capital gains, when you sell?

Comments

        • +2

          neither singapore nor switzerland are remotely similiar to here. For one you need to visit switzerland, what you avoid in tax is more than made up for in cost of living. similarly singapore has great income tax, but it also doesn't have the cost of providing infrastructure, the total area of Singapore is less than 10% the size of Sydney and similarly the cost of living there is much higher than here.

        • Go there?

  • +9

    Nobody is "forcing" you to add to the property bubble. You are choosing to do it.

  • +4

    Buy an investment property in the USA and you can pay lower prices and gain leverage to the American miracle Mr Trump will shortly unleash.

    • Not wrong there, Florida prices rose by double-triple. Buy at the top!

      • to late to buy at the top, peaked last year, been on a sharp downward trend this year. with largest downward trend for 15 years.

  • +4

    I mean if you enjoy dealing with painful tenants and property managers then yes go for it.

    Else ETF's are the key.

  • Indians and Chinese are always blamed but the reality is that it's just Australians fomo'ing in fear of the '"Indians and Chinese".

    Covid revealed everything. Zero migration, zero students, zero growth, high risk from default or no eviction ordinance but yet magically prices rose by 25-50% in a year.

    • +6

      At the end of the day new house builds fell off a cliff during covid because of supply chain issues leading to a ramp up in prices for existing residences.

      We then compounded it by supercharging our migration to "catchup" which only made it worse.

      • And the price of goods, especially building products, skyrocketed during the governments method of responding to Covid, with it's knock-on effect to existing properties. 'plmko' is struggling with 2+2 but, tbf, it often happens if people have already formed an 'outcome' and then reverse engineer 'facts'.

    • +4

      Rental prices also dropped dramatically, as much as 50% in some Melbourne suburbs, which doesn't help the argument that a million extra uber driving 'students' supposedly has no effect on housing.

      • Melbourne's pretty good. Houses there are avaialable 1 hr away from CBD. If u work from home 3 days a week, commute is fair. Ofc as a junior employee, you prolly wanna be there everyday.

    • +1

      I'm Indian. I'll never blame another person, for trying to get out of a shitty situation. I know lots of immigrants, and all are nice people, I'd actually take them over the vast majority of Australians already here. BUT I will blame governments, for irresponsible immigration, and giving visas for nothing.

      • Is it John or Rajesh?

        • +1

          It's probably Xi or Zhang.

    • You forgot cheap money and free government money flooded the market when the chinese and indians were not.

  • +3

    I've never bought a residence wondering how much CG I can make.
    My main thought has been "Will I enjoy living here?"

    Re: Capital gain when selling shares. It's a cost of doing business. You can offset slightly by selling the loss-making dogs at the same time or waiting until you have a year with low income.

  • +8

    20-year-old working at Coles thinking of buying an investment property.

    The epitome of what's wrong with the property market in this country.

    • +2

      But they can only afford one in the middle of bumble(profanity), yet doesn't want to live there.

    • Few years down the line :( :(

  • +1

    It's pretty simple really, don't make a profit and you won't have to pay tax.

  • +6

    I can report that my ETFs have never rung up in the middle of the night reporting that their (my) septic tank needs pumping because they've filled it up with "disposable" nappies AGAIN.

    You take your CGT-free (which could get audited IMO) sale, I'll just sell my holdings once I retire from work, and pay CGT at my marginal rate of 0%.

  • OP I will get downvotes for saying this but you really need to study Bitcoin at your age. Build conviction and if you see the value open a wallet and chip in $50 just to prove "it's not a scam".

    IMO young people are mad not to study and allocate at least 5-10% to Bitcoin

    • -2

      For diversification. Ig. Maybe 10 percent, but nothing more

      • +2

        Even 10% is a gamble and too weighted for my portfolio.
        1-2% and shared with my lotto tickets and tulips

        • -2

          Outdated argument from the 2010's, you sound like a broken CD/VHS recorder.

          When did lotto tickets and tulips ever been offered as ETFs, held in treasuries and reserves of companies and as a strategic currency reserve by governments on a global scale?

          You need to update "your" (regurgitating someone elses) old and weak arguments.

          • @IcySpicyStew: There’s money to be made sucking c*ck, doesn’t mean I’ll do it - and the same rings true with crypto.
            I’m sure others do it, I have nothing against it - it’s just not for me.
            YMMV

  • +1

    My apartment appreciated based on online estimates. Probably a unicorn suburb though. Which seemed obv when I bought but hey, people be sleeping. Bought to live in it either way.

    • -2

      I think bankstown will explode. Such a nice suburb from the looks of it. Close to metro/CBD. Lots of shops nearby. And no bogans

      • +7

        Just 1 after you move there

        • You are omitting his girlfriend and his girlfriend's other boyfriend

      • +3

        ROFL Bankstown.

        • +2

          lol, i had relos go to bankstown high school in 70's, were knifings then.

      • +1

        I think bankstown will explode

        That's what we all thought back in the post- 9/11 days.

        • I still remember the Fat Pizza store on the Hume highway on the way to Bankstown - spoiler Bobo didn’t work there
          “They’re fat and they’re cheesy” proceeds to cut a rat into salami for the pizza.

  • +4

    So for 30 years, I'd be pissing away like $200 per week.

    Rents increase every year, usually more than inflation. Mortgages don't. Mortgages devalue each year if you take inflation into account (ie. your job income will go up each year, but your mortgage will stay the same).

    When I bought my place it took about 3 years to break even with rents in the area, now I'm about $350/week better off than renting.

    Buying insulates you from consistent yearly rent increases. Your mortgage will go up and down with interest rates, but it will not go up at the same rate as rents.

    • That's not the way.

      You should cry about property prices and/ or rents for 30 years, then (when you wouldn't have to pay either if you'd acted instead of whining) cry about how much easier it was for the previous generation to buy.

      • To be fair to those starting out now, it was way easier for previous generations to buy. Median house price vs median household disposable income, see here.

  • +1

    What is your question?

    I have a number of investments in property (houses and units). Any property investment is a long term strategy, over 10 years. If you are investing in property I would not buy with the intention of selling within 10 years so your money is held up for long time.

    In that timescale a lot can change. I am in Victoria and I would not recommend property investment now due to taxes and rental tenant friendly laws.

    The best investment you can make is your primary residence which is CGT free. But you do not really gain from increasing value because you have to live somewhere. Pay off your mortgage as quickly as possible and then make other investments - maybe property and maybe shares. Then you might be able to upgrade your property.

    Good Luck

  • +2

    I mean yea noone likes paying tax but if you're paying 20% tax on a decent profit then so what?? Australia is one of the best countries to live in because of what you get for your money so why not contribute. Yes I know, everyone whinges about this that and the other but seriously if you find a better place to live then go for it.

    • +2

      'don't let the tax tail wag the dog'

      if you pay 20% tax on a 10% profit, that's still 8% profit after tax

      better than banks are paying now like 4.25% without excess hoops to jump through

      one of my ETFs grew 32% last year, so if I pay 30% tax on that, that's still up 20% for me

      better than a smack in the mouth with a wet fish …

    • You understand that apart from GST… almost no tax is 20% in Australia.

      Please have a look what your take home pay is at $100K
      $200K
      Just for wages…

  • -1

    the rent most likely won't cover the mortgage

    Really sorry that the lazy tenant won't be buying you a house. After all, you paid a 5% deposit and deserve a slave that buys the rest for you. Tenants are such scum!

  • 'Shareholders, how do you justify paying like 20 percent capital gains, when you sell?'

    Some years ago I sold a house I had held for 30 years - never lived in, always rented out

    after the 50% CGT discount for holding more than 1 year, the net cash (difference between sold price and purchase price, after costs) addition to my income for that year triggered the top marginal tax rate of 45% on the income above $180K, resulting in an income tax bill of over $200K … that felt {{pain}}

  • 'the big advantage of a house, is that if you live in it for a few years you can sell it with NO capital gains.'

    that only applies if you always had it as your PPOR and never rented it out.

    the 6 year rule allows you to move out of your home for 6 years without triggering CGT - but after that it probably restarts

    and if you first rent it out and then move in, CGT on sale would probably be apportioned for the period it was rented

    basic principle - income is usually taxable.

  • Shareholders, how do you justify paying like 20 percent capital gains, when you sell?

    advantage of shares over property is you don't have to sell in one go.
    you can sell down bits of it as you approach retirement age when you tax bracket is a lot lower. if you sell down just enough to meet expenditure you're looking at no more than 50-100k where your assessable tax is a lot less

    if you want to yolo into the next palantir or memecoin that's obviously different and you just have to take the win and cop the tax unless you trade for a living

  • +1

    On balance I think more Indian nationals will choose Australia over time as their home and Chinese folks will probably become richer - accepting/agreeing these outcomes make the ponzi scheme you speak of sound very appealing.

  • '1.5 hours away in the middle of bumble(profanity)'.

    Very few city folk (who tend to be annoying champagne socialists) though - heaven.

  • -3

    Personally, I found property to be a great investment. Started with $23K savings in 2004 and now have multiple houses and units in Sydney.

    Th rent is high and helps to offset mortgage repayments, with the beauty being that rent and capital gain climbs but the mortgage reduces so you end up with equity that you can use to fund other investments, luxury cars, lifestyle, etc.

    Risk vs Reward is pretty decent if you're thinking long term.

    • -2

      Look at this Financial Wizard, youngins!

      Just pull your socks up, put down your smashed avo toast, then jump in a DeLorean time machine and take advantage of the largest and longest property boom in history.

      • -2

        Spoken like a lazy failure full of excuses. I just settled on another investment property last week without needing to travel in time!

        I'm certain in 3 or 4 years, you'll still be saying how 2025 was a property boom and how the bubble is going to burst….. yawn!

        I met so many people like you on my way up. Tons of excuses but no action and expect to sit on your arse while things fall into your lap.

        Same people who tell me how "lucky" I am now to have all that I have… wasn't there a famous quote from a golfer saying something along the lines of "The harder I work, the luckier I seem to get"?

        I also have a fairly sizeable share portfolio. Why don't you cry about that too?

        • -2

          Wow look at this, youngins!

          The financial wizard just took yet another property off the market after having the good fortune and luck of being born at a time that let him benefit for the last 2+ decades from the largest and longest property boom in recorded history which enabled him to amass a huge property portfolio.

          Look at him, youngins! Follow his lead! It's so easy! Just pull up those socks and work hard. That's all there is to it.

          This financial wizard worked soOooo hard to ride the 25 year property boom and to be able to now, just last week, hoard yet another house.

          Chances are financial wizards like this have paid even less tax over that entire time than you youngins have paid in just the last 5 years (at the very start of your working lives). And it's all thanks to hard work alone, and nothing to do luck and certainly nothing to do with negative gearing, PPoR capital gains tax exemptions, or 50% capital gains tax concessions.

          It's just as easy now for you youngins, as it was back then!

          • -2

            @tenpercent: Nothing is easy but excuses aren't solutions. It's so weird that you hate on people for their success when the only person responsible for your life is yourself.

            Yes, I worked hard and sacrificed. Yes I took completely legal advantage of the tax system where possible.

            I assure you, I've paid way, way more tax into the same system that you freeload from and from which I don't benefit. In case you can't figure it out, I fund your laziness… what do you contribute?

            What's wrong with that? The fact that you sat on your arse is somehow my fault?

            Just keep begging for handouts, I'm sure that your whining and excuses will see you succeed in life.

        • -2

          I also have a fairly sizeable share portfolio. Why don't you cry about that too?

          No one's crying about your hoarding. And basic needs include water, food, shelter and clothing - not shares.

          • -1

            @tenpercent: Hoarding?! How do you figure?

            So what you're saying is that, despite my hard work and smart financial decision, I should not succeed but hand out to those that pissed their lives away being lazy and just restrict myself to basic necessities and be happy?

            Makes sense. I'll donate my stuff immediately!

            The tall poppy syndrome is strong with you people!

            • -1

              @imurgod: I'm saying you had:

              the good fortune and luck of being born at a time that let [you] benefit for the last 2+ decades from the largest and longest property boom in recorded history

              Or to put it more bluntly, it was primarily not your:

              hard work and smart financial decision[s]

              But keep thinking you're the hard working financial wizard. And no, you're not a tall poppy.

              • -3

                @tenpercent: And yet, here we are… one of us DID work hard and make good decisions, despite the economic climate (you conveniently forget when property dipped) and one of us is upset that the other did so.

                Like I said, you can hate on me all you like but it's exactly that victim mentality that has worked against you to date.

                You had the same or better opportunity than I did to take advantage of the same economic climate. The difference is that you sat on your bum like a spoiled brat and whined about it and that clearly hasn't changed (which is why you're still hating instead of building your wealth).

                Guess what the conversation will be 5, 10, 20 years from now.

  • -3

    no idea, mostly good, everyone can get lucky. But with Labor in power, you're likely to lose long term (unless they leave).

    Imagine being so incompetent at your job that you cant do your job adequately to the point of needing to outsource it to an economic round table (and then schedule it 6 months in the future instead of addressing real problems now). That's Labor.

    Spend now - the country will figure it out later and I'll ask people's opinions in 6-8 months.
    You'd think they'd have an idea after more than 4 and half years in power and they're still lost!

  • I prefer leveraged futures trading.

    I understand not everyone can stomach trading.

    • That’s an interesting and risky investment.
      Big bets, big rewards… converse is you get wiped out…

    • +1

      I'd love to play the game but the risk is too high for my risk profile.

      Kudos to you!

  • -1

    inevst in EFT rent nice cbd unit enjoy up grown went go pay your tax bill or put money into super death tax are only truth only good point own unit or house is just no look at every 6month or kick you out

    • +2

      Can you now write this in English?

      • +6

        I really thought I was having a stroke reading that. It's definitely a good idea to take investment advice from our eloquent fellow here.

  • why would you sell?

    buy shares.
    keep renting.
    when you retire, sell some shares each year to fund your lifestyle.

    my shares are up 103% since April.

  • +1

    (Profanity) Australia.

    Maybe you should move to an actually good country yourself?

  • Why sell? Use shares as collateral.

    • Similar LVR possible as with real estate?

      • +1

        Possible, depending on the stock but real estate and shares is like comparing apples and oranges. They require different strategies.

        With a good strategy it's better than selling good performing shares.

        • Sure if you already have the shares that changes the equations.

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