Residential Property Investment Criteria

We believe that residential property investment is a good core investment as long as set criteria is met:

• Value for bank/lender mortgage purposes (is the valuation acceptable to the bank/lender, and within their acceptable parameters
• New (tax minimisation advantages that provide tax savings – if applicable to, and available to your circumstances – are driven to a degree by the often significant depreciation benefits provided via new residential dwellings
• Land and Construction (provides savings on Stamp – Transfer Duty) Construction to be undertaken by elk invest approved Panel Builder. Tertiary to this primary benchmark is both newly constructed and near new, completed “house and land” properties
• 4 Bedroom, 2 Bathroom, Double Lock up Garage (primary). Any property Investment vehicle tertiary to this is only considered an on exception basis and subject to specific due diligence
• Rental Yield (4.5% – 5% and above, rental yield brand preference)
• 30 minutes of a major capital city and part thereof, or in very close proximity to satellite cities / major regional centres
• Infrastructure: current & planned, and public versus private
• Demographic Profile (income bands of people in locations, employment type, age, socio-economic status)
• Growth
• Continue and sustained growth over the medium and long term driven by population growth and demand which in turn is driven by continued infrastructure implementation and development
• Balanced investment vehicle providing the correct combination of rental yield / income, tax savings and growth
• Green space (significant englobo land) past (i.e further afield) from major capital city as compared to the vehicle location to allow for continued development to occur past where the vehicle is located
  
• Some investments are more tax effective than others. Growth investments such as property often receive more favourable tax treatment. Capital gains tax and earnings tax on some investments may be lower than the tax on fixed interest investments

The correct level of borrowing money to invest can also be a method of managing your tax obligations. If the cost of borrowing exceeds the income generated by the investment, you may be able to offset the loss against other taxable income. Prepaying loan interest in advance can also be a way to claim a approved deduction.