Hi, first off great site very informative and the people seem very willing to help, a bit about myself I’m 23 live in Ryde, Sydney currently studying but working full time in real estate I have been approved for a $170,000 loan and researching properties that are neutral/positively geared now for the question.
Who would you advise I speak to about putting a investment strategy together (2yr, 5yr, 10yr)? I would like to buy the first IP through a company set up another company and do the same before the completion of my studies (2 years) Is this possible? from there I should be on more money and obviously more access to funds. If someone could lead me in the right direction that would be great.You may be better off purchasing properties in a trust with a corporate trustee. This allows for better asset protection and you can easily distribute profits to different individuals or companies to reduce your tax bill (if you set up a discretionary trust that is).
Luke.
Obviously a good financial planner/accountant may come in handy.
Thanks luke & Scott for the reply’s I figured I would need to speak to a accountant thought i’d get some advice from others who may have started the same. Can anyone recommended a good accountant to speak to.
Hey Mick807,
You often find, investors do change their accountant (e.g., not happy with the advised given etc). What I can recommend is use google.com.au to search for tax accountant who specialised in real estate and make sure he/or she investment in the real estate that way he or she knows what you are trying to achieve.
But most importantly, since you have many years ahead of you in the employment market, I encourage you to invest first in your self before you jump into real estate investing (e.g., read real estate books, attend seminars, get a mentor). Why is this necessary? It is simply prevents you from loosing your money by purchasing a lemon etc. The more you learn the rules of the real estate, you will use factual figures rather than guestimate more like gambling.
Good luck and all the best in your future investing.
Cheers Leo
Hey Mick,
First of all – excellent effort looking into this strategy for investment. Alot of the 23 yo’s I know aren’t even that interested in property. We all know the earlier you do it the more years you’ll have.
I totally agree with Leo on this topic that while advisors are going to be essential, you really need to start learning about the topic yourself first. I’m sure you have already done some good research and coming to this website is also a great step forward. Keep reading and make sure you bias new and fresh information.
As for a specific advisor, an accountant will be essential, but always remember that they are your accountant and they will not provide you with the means to say whether you should make an investment or not. They will only tell you whether you can afford it. From this point of view I would recommend you try to find more than just one advisor, and take on a property mentor. Perhaps you have an uncle, or a friend who is a seasoned property investor. They might help you out if you simply buy them a coffee or lunch.
When purchasing through a company, don’t forget that there is no capital gains tax discount, however, since you are looking for a positively geared property, this may imply that you are alot more interested in cashflow then in capital gain. I would closely consider the tax implications of this, and in which case a tax advisor would be a good choice of person to talk too.
Good luck with your strategy!
Hi,
Is the above comment correct?
"When purchasing through a company, don't forget that there is no capital gains tax discount"
If I were to set up a discretionary trust with corporatee trustee, wouldn't I able to get a 50% cgt discount? Am I wrong?
I am still learning about DTwith CT so if I'm wrong – as least I know now.
Very hard to find info on DT with CT (that is without seeing a tax accountant first). Anyone out there who can suggest some good resources?
Thanks.
Hey 4jojo,
I actually just went to a property tax seminar last week. They confirmed to me that a typical company, ie an activity run with the intention to make a profit, does not have access to the capital gains tax discount. I can’t comment on a discretionary trust, sorry wasn’t looking into that area.
I can tell you where you can find such information though –
Register for this seminar: http://www.ato.gov.au/individuals/content.asp?doc=/content/00154616.htm
It’s free and you can ask the tax office rep yourself.Good luck!
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