Hey Guys!
Ah Finally, a forum for Aussie Investors! Anyway, my name is Glenn and I live in Sydney Kellyville. After reading a couple of books on RE investing, i decided to use the buy, fix-up, then sell strategy to get some capital to start with. [
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I will be using my parents as guarantors and maybe use there equity as well. I’ll also be saving up $10k for cosmetic renovations. Can any of you guys suggest a good suburb in Sydney to use this strategy??Many thanks to all who reads this post.
Glenn
[email protected]hey glen,
i don’t think there are any suburbs that this strategy is guarenteed to work in, but my recomendation would be to try and find a suburb where the people dont like getting there hands dirty……
hope this helps
[
] Powmow []Thanks for the reply Powmow.
After a hard research, i found some potential suburbs to look into. The real trick for making a succesful renovation is when you buy the property after doing a lot of research.(it must be a great deal) Another thing is to KEEP TO YOUR BUDGET. So many people end up spending more which in return becomes over capitalised. So far i need to read more books in this while saving up for a deposit. Right now, im studying interior design so im sure this will help.
Are there anyone out there with experience with renovations??
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]Aww, no replies..anyway, if anyone can answer these questions, it will surely be appreciated. [
]1. Is there capital gains tax in Queensland? [
]2. Would replacing the whole kitchen be under cosmetic renovations? [
]3. Would renovation costs be deductible when calculating capital gains? [|)]
4. In the renovation sample in this site, why do they disregard the tax?? (if they add tax, Bill & Sally would actually make a loss!!)
Pls help this confused soon to be investor. [xx(]
Many thanks,
Glenn1. Yes. CGT is a federal tax initiative.
2. If by cosmetic you mean inexpensive, then no.
3. I don’t think so, but you can claim depreciation on your renovations but this is only good if hold the property.
4. Haven’t looked at the example…sorry. []Regards,
Shane
Glenn
As to your first question/initial post, I think there are many places where unrenovated houses are going at or above the price of renovated houses as there are so many people out there now thanks to all the TV shows. I think the answer is to keep looking until you find a property that is in need of renovation, and is priced lower than all the others. Also one that will show a equity gain after you have renovated.
Renovation costs will definitely come into consideration when calculating CGT. It is added to your cost base.
I’ve not seen the example on the site, but perhaps the couple did not sell?
Cheers
MelHi Guys!
Thanks for the responses. In regards to the example, its in this url
https://www.propertyinvesting.com/strategies/renovations
Now in that topic, they said they made a profit of $11,678 .
IT all sounds good until you actually deduct it off with the dreaded TAX [}
]So it looks like the couple actualy made a loss cause the stamp duty and CGT is 5% of the sale price Isnt it?? (which is more than the profit they made)
Correct me if im wrong, but this is a silly example to show to people who are getting ready to do renovations to make a quick profit as a starting strategy [
!]What do you guys think??
Glenn
anyone there? hehehe [
]Hi. having read the example I think I assume that the couple have bought this place as their principle place of residence so therefore no capital gains tax, no stamp duty so the profit would be as stated.
However you have an excellent point as more often than not, all those lovely good looking couples on the tele who make wonderful ‘profits’ fail to mention tax, interest, time and Labour, closing costs etc etc. All those little trips to Bunnings all add up and unless you are putting ALL your receipts through your accounts it is easy to blur the true picture of what the reno has cost.
Good luck to you, Brisbane is still good, around Morningside and bay areas, still rising. Sunshine coast is still good, not much on the Gold caost though.
Cheers, sunshine
Thanks for your kind reply Sunshine [
]Maybe what i can do is to renovate a house, then increase the rent, then i can just wait for a year before i can sell it. So that way, tax wont be much of a pain. Although the down point is that i have to make payments to the bank for a year. This will only be good if it was positively geared.
[8]
I still have a long way to go. Im 22 years old and im still saving for a deposit. ($10k) Right now, im just surveying my options.. [^]Any thoughts about my dilemma? [
]Cheers,
GlennHi Glenn,
Good to see that you’re keen to start early. You might consider a reno on a unit as they’re cheaper and easier to renovate. We have done two in Sydney in the last year, and with the first, as soon as we got the keys in the afternoon, we pulled up the carpet, cleaned the walls and had a coat of paint on before midnight, had sleeping bags & slept on the floor. Good fun. Measured and ordered a kitchen. You can find good prices and that includes at the auctions, you need to know your measurements and have someone who will fit it and maybe cut down the bench if you can’t do that yourself. Bathroom needed a new basin, mirror. Installed timber venetians and all new light fittings.
Similiar situation with the second. It’s amazing what new carpet, paint and light fittings will do.
Have recently renovated a house. Some of the kitchen cbds were broken & of the old chipboard as were shelves which were water damaged. We replaced these, have a kitchen manufacturer we use and he will cut what we need. He had a pantry not used from another job so we got that cheap, matched the door and installed that. Retiled as the tiles were cracked and of all things, were patched with several colours and sizes – horrors.
The bathroom was badly leaking in the house, stripped and renewed that. Totally painted inside and out, valuation before by bank $140,000, after $230,000 and under $10,000 in costs.We helped our daughter buy her first property in Sydney at age 21. It was purchased in her name & her father’s name at the time. Hope you get a good deal soon with your parents’ help.
Anna
So it looks like the couple actualy made a loss cause the stamp duty and CGT is 5% of the sale price Isnt it?? (which is more than the profit they made)Hi Glenn
The CGT is calculated based on selling price – purchase price (+ cost of renovations). It is then added to your taxable income. Depending on how long you have held it affects tax rates too.
Cheers
MelOk. I’ve just looked at the example now![
] The couple will be taxed on their profit of $11768, so at most they would lose $5589.80 of their hard earned profit to be left with only $6178.20.Thanks again to all the replies. [^]
Im beggining to learn more and more as more messages are posted.
Anna, (aka Annaw2) Im really interested about your past experiences with renovations. The fact that you did it twice in Sydney, you might just be the mentor im looking for. Is it ok if i can email you so we can further discuss your recent success? my email is [email protected]
Whats your email??
It will be an honour if we can get in touch. [^]My plan is to do the renovation technique for a year or 2. With all the profit i make, i can use it to go John Burley’s Bootcamp or Steve Mcknights Wrap seminars. They usually cost more than $3k. Anyone who is taking the same path as Iam should share experiences so that way knowledge is passed around everywhere. [
]“If you want love – give love” [
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“If you want a punch in the face, give one to a stranger and you will surely get it back. [xx(]
“If you want to receive riches, then give riches” [8D]– John Burley
Many thanks and keep up the posts!
By the way, one of the posts mentioned there were property gurus like Steve Mcknight that holds seminars on renovating property. Can anyone recommend one for me? [^] Preferebly in Sydney..
Many thanks,
Glenn []Glenn
Try http://www.financialsucesssytems.com.au
The Reno Kings Geoff Doidge and Paul Eslick – I believe they only operate out of BrisVegas though. Don’t know if there are any Sydney specific ones.
Cheers
MelSorry mel, but the link doesnt work. are you sure this is the one?
[xx(]
Try without the .au I was typing from memory, and got it wrong.
Cheers
MelAh thanks Mel…[^]
Seems like i found a professional renovator from that site. Thats fantastic. I guess i need to read more books about it. So far Ive read the following.
*Improve the value of your home – Robert Irwin
*101 ways to massively increase the the value of your realestate -Dof Deroos
* Auction squad the bookCan anyone else suggest the following books to read regarding renovations/ capital gain?? [
]Annaw2 r u there? Give us more info about your recent reno success yeah!? [
]Mel, did you have any experiences in Renos?? [
]Cheers guys, [
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GlennHi Glenn,
Had a busy weekend. I’ll email you and let you know about our renos. I’ve posted a bit on the forum and don’t want to appear to be duplicating it all.
Anna
Hey Glenn
The only reno I’ve done was a bit of paint, and a new kitchen, so I’m afraid I’m not much help.
For books on renos, have a look at the API, at the back of the magazine they list a whole heap of books on various subjects – and the Reno Kings feature in some articles every month.
Cheers
Mel
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] The couple will be taxed on their profit of $11768, so at most they would lose $5589.80 of their hard earned profit to be left with only $6178.20.
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