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Majority of investors ‘losing’ money

Despite most property investors seeking out wealth and cash flow, a new report has revealed that over 60 per cent are making a loss on their rental properties.

CoreLogic recently released its Investor Report: A profile of residential property investment across Australia, which found that 61.9 per cent of residential property investors declared a net rental loss, according to ATO data.

When analysed across age cohorts, the report found that the majority of loss-making rental properties are owned by individuals who fall within younger age groups.

A total of 78.4 per cent of property investors who declared a net rental loss were aged below 40, while 59.8 per cent of individuals aged 40 to 64 declared a loss.

The age group with the largest percentage of property investors claiming a net rental loss was the 25 to 29 cohort, with 82.8 per cent claiming a loss.

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Only 22.5 per cent of those aged 65 years or older claimed a net rental loss.

The report suggests that the younger age cohorts would potentially include some first home buyers who are choosing to purchase as investors rather than owner-occupiers.

Meanwhile, 77.5 per cent of people above retirement age (65 years-plus) are claiming a net profit from their residential property investments, compared to just 33.1 per cent of individuals below retirement age.

The age group with the largest percentage of property investors claiming a net rental profit was the 75-and-over cohort, with 90 per cent claiming a profit.

“While younger owners of investment properties — those under 40 years of age — are the most likely to be claiming a net rental loss, the size of the average loss is greatest for those aged between 45 and 59 years of age,” the report said.

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“The 25 to 29 year age group is the most likely to be claiming a net rental loss (82.8 per cent of individuals). However, the proportion of individuals claiming a net rental loss incrementally reduces across every age group thereafter, to a low of 10 per cent of individuals above 75 years of age.”

Majority of investors ‘losing’ money
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