Hi, first post [biggrin]
Im thinking of investing in property. I have enough equity in my home which allows me to borrow 100% on an investment loan.
To maximise cash flow I was told that I can get tax rebate on a weekly basis rather than annually at tax time. Apparently this has to be done through my employer.
Please post your pro’s and con’s assuming I take out a interest only loan.
ThanksYes all of that is possible and can be useful.
What is your real plan though?
What do you hope to achieve from buying a property?
Where do you want property investing to take you?
Cheers,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Im hoping to buy property while the market is down and sit on it for 5 to 10 years and hopefully get a decent profit.
Simple enough, just make sure you do your Research to where you should buy first. This will impact the effect of how many properties you can hold ect.. Depending on Rental Returns and Depreciation of fixtures & fittings ect..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auHi Beast,
Good advice above. Make sure you know what you want to achieve from your investing before you go off and buy “any old” property.
Re; the tax variation, you will need to lodge a PAYG Withholding variation (available off the ATO’s website – http://www.ato.gov.au).
You fill this out itemising your income and property (and other) deductions and the ATO calculate your notional refund and advise your employer to reduce your weekly, fortnightly or monthly tax (depends on how you’re paid) to, in theory, give you your refund as you go rather than at the end.
Hope this helps.
regards
Megan
Beast
Obtaining your credits through a variation to your tax coding will help on a weekly basis and improve cash flow.
However one are we find many clients fail to overlook os to assess your investment loan and the structure in which you are buying the property in.
Talk to an independant mortgage broker as look at the range of options. Remember your lender will never tell you that someone elses product is more competitive.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Thanks for all of your advice. Can you recommend an independant mortgage broker? Im based in Sydney.
ThanksThere is Richard from Your State Finance and Simon from Mortgage Hunter on this Forum, they both post replies to your topic. They can both probably help.
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auOriginally posted by Beast:Im hoping to buy property while the market is down and sit on it for 5 to 10 years and hopefully get a decent profit.
So you’ll be buying in two or three years then? We are currently at or just past the peak of the biggest speculative bubble in history, and residential real estate is still considerably over-valued in relation to wages, rents and historic trend. Make sure you understand your own plan. I’m still backing 30-45% falls in REAL TERMS over the next 10-12 years for most parts of resi real estate around this nation.
Cheers, F.[cowboy2]
Hey F,
That’s an extremely broad brush you’re using there to paint “most parts of” all around the massive market that you describe.
Seeing as though it is impossible to buy the entire nation’s resi market, I fail to see how one can individually prosper from the data you quote.
It looks as though you’ve addressed the ‘con’ half of Beast’s original question. What do you see for the ‘pro’ side ??
Which specific areas are you currently targeting – assuming your ‘most parts’ is not indeed ‘all’, that do not fall into the category you describe ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hi Beast
There are always two sides to a coin.
I’m on the opposite side to foundation I currently have 1 x 19 unit under construction and 1 x 20 unit in council for da.
check with an accountant I think you can get tax relief but only if negatively geared.
The pro’s of an interest only loan on home
1.tax deduction
2.relatively easy access to cash
cons
unless structure correctly home is possibly in line for creditor attack.here to help
Gross,
I don’t understand your “con”
Could you please explain what this means:
cons
unless structure correctly home is possibly in line for creditor attack.Thanks
Herb
hrm
Dazzling & GrossR,
I’m not saying (never have) that there is no way to make money in real estate, even with the current outlook. Development (particularly large scale ie 19/20 units!) can be one very good way, providing you know what you’re doing and have the ability to weather the inevitable issues…
On the other hand, buying a house or a unit – almost any house or any unit – to “sit on it for 5 to 10 years and hopefully get a decent profit.” is an absolute mug’s game at this point in the cycle. Yes, I’m being broad brushed, very deliberately so. Every two horse town in this country has seen house prices spiral up to unprecedented heights over the last few years, but if somebody can point me to an area where house prices have not appreciated at least 40% since 1998 I’ll happily admit that area may not be horribly over-valued… as for anywhere else…Anyway, to answer your question Dazzling, I’ve invested in the repayment of all my debt over the last 18 months. Spare cash is invested in oil, base & precious metal shares (currently just BHP, ROC & GDM), physical gold & silver.
I have my eye on an approximately 45,000m2 property with subdivision potential (stca & rezoning) on the Victorian coast, but it would require a 30% drop in asking price to make the reward / risk ratio more appealing. Very little else in the residential real estate does or would interest me except for perhaps a mountain retreat for personal use during the snow season.And for what else it’s worth I believe 30-40% off the ‘current value’ of my own 2 houses would bring them back to fair value, and that I’m not immune from what is happening. Besides, that’s all it cost me to build them… [eh]
Cheers, F.[cowboy2]
Fair call F, pretty solid strategy.
We could point to a few suburbs (smelly industrial ghettos about 5km from the CBD) that haven’t grown in the past 4 or 5 years, but are primed to take off (IOHO) and we’ve jumped in boots and all.
HRM, I think GR is getting at asset protection – when you are doing big developments, don’t let your PPoR get caught up legally with the development so you don’t lose your shirt (or house) when things go belly up.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
hi hmackay
Creditor attack is exactly that.
If you own a house, shop, any business and someone won’ts to sue you they will.
If your in a cyndicate and it goes west the creditors will come looking for the big fish first and real estate is the easiest to cash up.
So just like any attack you must have systems in place to defend your position.
If not and the gardener breaks his leg and says your negligent and your insurance says because its negligence no cover.
You don’t want a court to sell your properties in a line, the house he fell in should be the only one in the gun sight.
If you tie personal and business dealing together these lines need to be very noticable and as I say a structure put in place to protect your investments.
A good accountant can construct this but it needs to be setup from the start if possible.
here to help
hifoundation
Just for the record f I only do 65% gross realisation lends and banks work on a gross profit for a development site of 35%.
So that is why you could shave 30 to 40% off the price.But if everyone did this people like me would go hungry.
These are our 8th site currently and I hope for my sake that I do know what I’m doing sometimes I do have to take a good long look in the mirror.
I’m a little more optomistic then yourself and think the sydney market will start to move upwards by jan.(don’t quote me on this)
here to help
Dazz & Gross,
Thanks for the explainations. Appreciated.
Always learning.
Regards[snorkle]
hrm
no problem as the tag says here to help.
we all may need help one day.
read a few of your responses well done.
We are all learning, I have used this before but I like it.
When a rich man meets a wise man the rich man becomes a little wiser and the wise man becomes a lttle richer.here to help
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