Dear all,
I am looking for ways to turn the following property into +ve. The property costs $155,000 and getting $170. It costs about $11,000 to maintain it. Obviously, it is -ve.
I would appreciate for suggestions that turn this property into +ve. Thank you in advance.
Regards,
FrancisHow old id the building on the property?
If the building on the property was constructed after 1987, you can claim depreciation against your income tax on every part of it. Even if it was built pre ’87, there still may be some depreciable items there for tax purposes. Ring a qualified Quantity Surveyor to discuss your options.
Every aspect of the building will have different depreciation rates and values. You can obtain a Depreciation Schedule from a Quantity Surveyor for about $400-500 (which is tax deductible). This is then handed to your accountant and he/she applies the claims to your taxable income.
As well as this, all your holding costs are tax deductible at your marginal rate of tax.
Combined, these deductions may allow you to generate a significant tax return, thus cutting down your cashflow shortfall.
Finally, if you can add value to the property through some renos or improvements this can allow you to increase the rent.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Hi Francis
My wife and I have recently turned three different negatively geared properties into positive cashflow for our clients.
We do this buy selling the properties with Vendor Finance. We structure this type of sale so that you receive positive cashflow until the new buyers refinance out of your Vendor Finance, into a traditional loan. This process usually takes two to three years.
Obviously this won’t be attractive if you don’t wish to sell the property but, if this is an option for you, your sell price is fixed at the begining of the transaction and your IP generates positive cashflow.
I hope this helps.
Cheers, Paul
Paul & Karen Dobson
negative2positive
Turn your negatively geared property into positive cashflow.
Phone: (02) 4984 9540Talk to us about Wrap Training Joint Ventures.
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hello Francis
Can you make any improvements to the property to attract more rent eg fans, air conditioning, floor coverings?
Can you reduce your loan amount?
Regards
Demkel
Hi Francis,
I agree with demkel, the easiest thing to do will be to do minor renovations with a view to increase the rent – painting, updated kitchen/bathroom, new carpets, new carport, etc.
Or if you have savings, put them into the property so that your loan repayments are reduced.
You can also look at subdivision (with council permission) if the land is large enough to subdivide. Sell the subdivided land and put the profit into the existing loan to reduce your repayments.
Regards
Sanjiv
*******“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.†– Nelson Mandela
Dear all,
Thank you for your suggestions.
I have done or considered the following:
1. Claim depreciation. I have purchase a Depreciation Schedule which give me about $1,000 claimable amount in the first year.
2. Small renos to increase value. But it needs about 36% increase in rent to make the investment breakeven.
3. Reduce loan amount. It needs to reduce the loan amount by about 30% to make the investment breakeven.
4. Provide Vendor Finance. I know only concept, but not legal and setup details.
Regards,
Francis
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