Goblin the answer is never so simple with tax structuring. The journalist who wrote that article is right in a way but for those who are not in the big end of town it can be overkill with structuring.

Yes that is a good strategy.

A 95% lend, especially for an investment property, is so difficult these days unless you have $$$$$$ of serviceability.

DFT = Discretionary Family Trust.

You can put the offer in now but make sure that you are able to pay the deposit to make the contract acceptable to the vendor.

Yes Shan a subdivision will unlock value. But it takes time for the subdivision process to finish. Since you are looking to construct on the houses as well you might want to consider building first, then subdividing later. Subdividing first then building is not very efficient.

Shan,

Your problem is easily fixed since you only have 2 dwellings on one title. You just need a lender that will work with you.

Transferring property between siblings will probably incur stamp duty. Also consider that if you borrow in joint names it will reduce your borrowing capacity on other properties as they assume that the entire debt is yours, although you only get half the income.

Location, location, location! Let’s not forget that houses with larger land content have lower yields so they are harder to hold onto. Not every investment has to be a ‘potential subdvision’…there is more to property investment than that.

What’s more important to you? You obviously value the smaller block due to its location and features – so I would think it best to buy it in that case. A good investment is not always about the land content – location is the primary determinant of growth I believe.

Get a caveat on the property NOW to stop the sale to the other purchaser. If you prove that you have signed the contract beforehand then you have exclusive right to enforce it.

Sell it and get rid of it. It is a crap investment, full stop.

Victoria, my advice to you as a new investor/purchaser is to keep it simple. Once you start getting trusts, co-borrowers, guarantors et al involved you will overcomplicate things that don’t need to be complicated.

Here in Victoria the FHOG for an established property is only $7,000 – that is hardly anything. The tax deductions and rental you get from the first 6 months of holding an investment property far outweigh this paltry sum – particularly for higher value properties.

I agree Jamie. Each has their own pros/cons. I think it is healthy to live away from home – whether that be in a PPOR or by renting depends on the financial position of the person.

I always advise my clients to invest first, purchase the PPOR later. With an investment you have a much better budget, and will be able to purchase much better quality property. No point buying a dogbox 1 bedroom apartment that is going to have limited growth, in my opinion, if that’s all you can afford.

It depends on the area. If you see a lot of battle axe developments then perhaps go with that approach.

Josh,

Don’t focus too much on the FHOG or FHO Boost. These are just gimmicks – and developers of house+land packages have inflated their price by the size of the grant anyway!

For an investment I would stick to purchasing decent properties in good locations. What is your budget? Have you arranged finance?

Good point Richard. Owner-Builder has the same stench as ‘student accommodation’.

Yes as Terry said you can do it. Not a problem as long as you can service the debt.