Forum Replies Created
Not sure whether that would be legal. As far as I’m aware, in VIC tenants can be up to two weeks late in any month before any action is taken against them. Also, I think a clause like that, if legal, would scare off prospective tenants.
There are 10 types of people in this world. Those that understand binary and those that don’t.
Crystal,
$3260 divided by $85000 multiplied by 100% = approx 3.8% [happy3]
Good question..I’m not sure whether to be excited or scared about having all these funds available to me. I don’t think it’s the right time to be buying more property just yet. I’ve been trading some gold stocks recently with reasonable success so I’ll continue to do that. But if gold price can revisit and break through its recent high of $US730 an ounce, I may start accumulating on a bigger scale.
Definitely hold if you can afford to. You will one day look back, holding a substantial capital gain, and wonder what you were worried about. I bought a house in 1990 for $84,500 and it immediately began to fall in value. I thought it would never recover, let alone give me a capital gain. I would ask my agent every few months what it was worth. It got as low as $65,000, that’s about a 23% loss. Eventually, in 1999 it went above my purchase price and I quickly sold it for $90,000. I was elated. In 2005, it resold for about $220,000. I also sold a block of land in Rye for $30,000 in 2000 and its now worth about $150,000. Anyway, I now have 3 IPs bringing in great rent (and by the way rents are rising substantially), and I’m not going to make the mistake again about worrying about capital growth and thinking its never going to come.
samjames,
I pay 5.5% (GST included) and I could not be happier with my agent. I have 3 properties with them.
Tax rates 2005-06
$0 – $6,000 = Nil
$6,001 – $21,600 = 15c for each $1 over $6,000
$21,601 – $63,000 = $2,340 plus 30c for each $1 over $21,600
$63,001 – $95,000 = $14,760 plus 42c for each $1 over $63,000
Over $95,000 = $28,200 plus 47c for each $1 over $95,000
The above rates do not include the Medicare levy of 1.5%The top tax bracket is for taxable income over $95000. Of course, the 47% rate is only for income in that bracket, not the total income. Same applies for all brackets. I find a LOT of people are under the misconception that they pay the tax rate of the bracket they are in on ALL of their taxable income. It’s quite funny when I hear colleagues at work panic that their backpay for a salary increase is going to be lumped together and place them in a higher tax bracket.[biggrin]
andymitchell,
The withholding tax form is only of benefit to you if your taxable income is “reduced” because of your investment. In other words, your interest, bills, depreciation etc are greater than your rent. The net loss is used to reduce your taxable income, hence reduce your tax payments. So if you end up with a “higher” taxable income, why bother lodging the form? Unless, you want to pay more tax before you have to. [blink]
Thanks for your reply ptn,
Property to double in five years, that’s highly optimistic in my opinion, but hey I won’t complain if you’re right. I’ve made a couple of very poor investment decisions over the last few years so that would really make my day (or five years).
I have 3 IPs. Two bought in 2001, fully paid off, good capital gains. One bought in 2003 currently on about 80% LVR. All 3 with excellent rental returns. However, I bought the third one at a very stressful time, when I was pretty heavily invested in the stock market (about $140,000, as much as my stomach could bear at the time) and losing money. Market had been in decline for three years as stock market followers would know. I panicked, sold out and bought a $420,000 townhouse instead. Then, of course, the stock market took off and the property market slowed. Those stocks that I sold in panic are now 100-200% more expensive! My townhouse has probably gained 10%, woopeedoo.
Had I put the $420,000 into the stock market instead of buying the townhouse back in 2003, well I don’t even want to think about it.
Anyway, I’ve still done OK and hindsight is 20/20, but if I’ve learned one thing, it’s that you need to be diversified in your investments and stick with them, because markets go in cycles and tops and bottoms are hard to pick, until you look back and realise it years later.Marco [blush2]
What a great thread! Informative and very humorous![biggrin]
Originally posted by Colin Gowan:3056 Please accept my apologies I didn’t intend to offend anyone.
No offence taken Colin.[blink]
I understand exactly what you are saying Simon and I take your comment as a compliment. I was just trying to make the point that the problem is the card owner, not the card.
Originally posted by Colin Gowan:Perhaps the first thing I suggest should be to cut up the theft cards, nobody needs them, if you are intelligent enough to be disciplined with repayments you are intelligent enough never to need them.
Enough said about those evil cards.[evil4]Credit cards are not evil, it’s the people who cannot manage them that are evil! I’ve NEVER paid 1c interest on any credit card I’ve owned in my entire life. I don’t NEED one, it just makes financially good sense to have one. I automatically have my card paid off on the due date before interest kicks in. I use my card to pay all my bills and buy only what I need (with the occasional exception), enjoy the 45 days interest free loan and also get rewarded for doing it via cinema tickets, gift vouchers etc. I’m sick and tired of people advising others to cut up their cards. I’m sure there are plenty of other people like me for whom credit cards have been nothing but financially beneficial. I pay no annual fee on the card and I also own 3 pretty impressive IPs. And by the way, I still consider myself intelligent. [biggrin]
Yeah…OK?
“From the heart of my bottom”. At first I thought it was a typo. What a great come back!
I think an IO loan is great as long as the difference between the IO and PI monthly payment is also invested. If not, I would stick with a PI loan because you are not only disciplining yourself to save better by having to meet the larger repayment, but building equity in your property faster by reducing the loan (and saving interest) and getting capital growth. With an IO loan you will only build equity with capital growth. Having said that, you can get an IO loan and still make principal payments whenever you want. I agree with Simon about using an IO loan on an IP if you have non deductible debt in order to eliminate that first.
Marco[biggrin]
MK,
This is one of many reasons why I would never manage my own properties. There are so many advantages to using a PM I can’t understand why everyone doesn’t do the same. I pay 5% commission and it’s tax deductible. You say you like to save $20 per property by managing them yourself, but how do you know an agent wouldn’t get you more rent?
I know someone who self manages in order to save. One of my properties is very similar to his. He gets $230 p/w, I get $260 p/w. Another one of my properties was renting for $350 p/w and the tenant was on a month to month. She gave one month notice that she would be vacating 18/12/05. I began to stress. The agent told me that she would try to find a tenant quickly (it was still Nov), but that if it got much into Dec it could be slow until Jan when things really pick up. Well I had two worries, the first being a few weeks lost rent, the second being I couldn’t go away and enjoy my christmas holidays with my family (i’m a teacher). I got a bit desperate and told the agent to offer the tenant a $30 reduction in rent, which was declined. The tenant had already signed up a new lease for $290 p/w elsewhere. Anyway, within days the agent signed up new tenants (a lovely couple, clean, quiet, polite, pay on time, and run their own business in my local shopping centre). Not only that, they offered me $20 more p/w to secure the property because it was “exactly what they wanted”. I’m now getting $370 p/w. Furthermore, they moved in on 20/12/05, so I lost one day’s rent (plus reletting fee). They could have moved in one day earlier but the agent wanted it free to inspect and carry out cleaning/maintenance. There is no way I could have achieved all that on my own.Thanks Derek. By the way i’m Marco, not Steve.
Exactly my point. Can we leave it at that, i’m tired of this. If i had have known i would be attacked for my post i would not have bothered. Everyone else on these forums seem to encourage each other and only offer positive feedback.
Why don’t you use TLS in your calculation? Or why don’t you use CBA when it was around $35 before it dropped to $24? It is easy to handpick stocks that have done well after they’ve gone up.
hb…
Please don’t give me a lesson on shares.
I know all about BHP, CBA and hundreds of other stocks. I’ve followed them for years. But you are right, they have by far outperformed property in the last 3 years. But before that, property did much better than stocks. Thats why you need to be diversified. So next time, read my posts correctly. I told you I already have a share portfolio. Yes, I would have done better had I put the lot into shares in that time frame, but i didn’t. Stocks and property both have downturns, but they are both great investments over the long term. What I said was that I was glad to finally see some capital growth in a property which was probably bought near the top of the market, i never said it had been a great investment so far.[biggrin]
