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DO NOT TAKE ACCOUNTING ADVICE FROM A REAL ESTATE AGENT!!
Get accounting advice from an accountant who understands property accounting issues.
I could recomend
http://www.bantacs.com.au/index.htm
Julia Hartman is a regular contibutor to API magazine and has a internet advisory service for a small charge. I found the advice she gave me about GST and purchace of commercial property to be quite comprehensive with ATO precedents and ruling examples from what I have
Based on my purchase of a commercial property, weather you pay/collect GST will depend on many factors including if purchaser and/or vendor is registered for GST.
My personal opinion, not as an accountant, is that if you follow the advice of give90, you run the risk of the ATO demanding you pay them GST on the purchase of the property when you deregister.
BE CAREFUL!! GET ALL THE ADVICE YOU CAN BEFORE FINALISING THE PURCHASE!!
Thanks so much to you all,
This has confirmed my doubts about going through with this uncrossing of the properties at this point in time, as the bank valuation of the IP came in lower than needed for it to be stand alone at LVR 80%.
The Mortgage Broker I am dealing with is not putting my interests first in continuing with the uncrossing of properties when they know full well the numbers do not add up.
I will hold off and just sit tight….
Thanks again to you all
I've been to one of the regular free seminars that sam's company runs in st leaonards, sydney.
They provide a bit of good sound education on property investment fundementals as well as introduce the company and to offer properties they have on thir books.
I recommend going along to the seminars which are free and then to ask to attend one of the mentor group meetings as a guest. I went to one of these meetings and was inspired by the stories each mentoree (about 50 ) told about their unique investing strategies. From novices to strata titling of blocks of units.
I did not buy any property or join the mentor program, but still found the meetings to be educational and inspiring.
I also recommend going along to the property game seminar they put on, cost $99.
All tile shops have a product called various names but the one I used is Prebond, which I used in tiling over existing tiles in my bathroom floor and walls as well as two IP shower cubicles.
Tiling floors can be tricky due to floor slopes, tiles can poke up too high. Just needs some planning in tile layout before you start.
Abbruzzi
I have heard that there are clubs or just small groups of people who meet regularly to play the board game.
I would be interested to play the game if there are any people interested in Sydney.
Don't own the game myself but would be willing to join a group and bring a few beers, I live on North side.
Hi there Don,
I attended the Property School after seeing Peter Koulizos speak at the Property and Investment Expo at Darling Harbour Sydney in 2007.
I had a bit of equity in my apartment and had been intensively looking for an investment property and reading everything about the topic since October 2006. I had become accustomed to spending 2-3 hours at a time on Thursday nights and Saturday afternoons using the book stores like libraries, especially Borders Pitt st and Kinokuniya at townhall which have comfortable chairs. I can say I have skim read and re-read most every property book and the odd general investment book there is in these stores and I recommend to anyone to read about property and investing from as many angles as possible. Obviously buy every issue of the Property / investment magazines as they come out..
But there lies the problem I came to, information overload.. and I had flown up to Brisbane and got taken for a ride by a smooth talking agent, got out of contract but paid the 0.25% commision, cost of investing as far as I was concerned.
Then I attended an information evening for the Property School and at the end of the evening took the "leap of faith".. I signed up based on the fact that The Property School is a genunine eductional course, orginating from Peter being a lecturer at Tafe and the course being taught in Victoria University in Melbourne amougst other places around Australia.
The course just clarified all the knowledge I had gained and boosted my confidence. Also, to sit in class and meet other students from so many walks of life and investment experience was so comforting. The atmosphere is informal and I could ask as many questions as I liked and also listen to the questions of others.
The lecturers are qualified practitioners in their respective feilds of expertise, such as lawyers, accountants, brokers, valuers, renovators – and most importantly each of them were property investors with substantial portfolios. I could feel that these lecturers had a passion for property which was contagious.
Anyway, Bottom Line, I calmly and with conviction and dicipline ACTED on a property in Melbourne that I found and researched myself and now I am Laughing… (bought for 10% discount and the capital growth is as I planned, knowing the fundementals and having the confidience to Act appropriately)
The cost of the course was returned to me by many many many multiple times…by buying right!!
Norm
ps.. have subsequently bought another property in Brisbane at discount and am renovating that… laughing (even with the rate rises)
Retiling can be done without the mess and hard work of knoking off the old tiles.
As long as the existing tiles are sound, do what I've done to my home bathroom and to an ip shower recess and use Pre-bond and tile over the old tiles.
Hi there
I don't know if Im "for' or 'against' in relation to this topic..
But just got in at 11.30 back home in Sydney after flying up to Brisbane for the 4th weekend of renovating one of the flats in a duplex I have in inner city.
Was nice to log on and read this topic with the various views.
I think the initial topic is true in the sense that people should do what they are good at and leave the big jobs to the experts. (knocking down walls? forget it, not for me)
It was a real logistical exercise doing the reno in Brissy. Settlement was on 6 september, and I have a pro-active property manager with all the tradies on the books and who was willing to get me quotes for any work requried to be done. (with 11% commission)
Got quotes for kitchen $5000 including replacing sink, which I thought unnessary. I did the kitchen for $1000 ikea cabinets, just needed my time to pick up all the stuff and assemble.
Bathroom quote came in at $7000, get real! it's just a rental. This included ripping out the whole shower and rebuilding it. I found the tray to be perfectly ok and waterproof and so I just cleaned it up, and retiled over the existing tiles (with pre-bond), and changed the taps to cheap chrome jobs found at bunnings. Got the bath resurfaced professionally. Knights tile paint looks crap when I tried it.
On the crazy side of things, I did rationalise my flying up there in doing 28 hours work per weekend, from 8am saturaday to 8pm sunday with 5 hours sleep and meal times. With $280 return airfare = equivalent $10 per hour to pay a handyman. I took my hand tools up there. Just brought them back cuz job done! (timewise, reno was a bit stretched out, due to unreliable painter and then me deciding on get plaster to put in soundproof wall between flats.
In this past weekend, I put in 50 sqm of sir water lawn. This was as reno crazy as I got, hand digging up the old weedy lawn last week, I hand dug to the required 80-100mm depth of dirt (came to 3 cubic meters of crudy soil, excavation took from sat 10am to 8pm, slept from 8pm to 12pm in the car. From 12 midnight to 4am wheelborrowed 3 cubic metres of screened soil from front to back of house, dumping it in the lawn to be area. slept from 4am to 5am when first light allowed me to see to spread and level the new soil. Started laying the new turf at 6am and had a beautiful lawn at 9.30, just in time to return hired wheelburrow and lawn roller.
Funny thing was, the most memorable part of the weekend was just leisurely sweeping the driveway on a lovely warm sunday in brisbane after the work was done. Love that feeling of ownership and fixing up what's mine, chatting with the neighbour over the fence.
My past experience is only bathroom tiling, replacing toilet and vanity and painting my apartment.
Oh crap, look at the time, 1.30am. I better get some sleep before havin a well earned rest for the next 5 days at the office.
Abbruzzi
Living in Sydney, I recently bought 2 ikea kitchens (cabinets only) and installed one kitchen in one of the flats in my duplex rental in Brisbane last weekend.
Order of events went as follows:
At final inspection before settlement of the property, I measured up my kitchen area and sketched a rough plan with location of doors, windows and services.
At Ikea in Rhodes, Sydney, I generated a 3d design based on the dimensions of my kitchen, complete with location of doors and windows and services. The Ikea staff are very helpful with design ideas. There are about 8 computer terminals to use. Finalising the model after about an hour, I printed off the 3d view and the parts list with final price. Then I saved my model on the Ikea website so I could have access to it anywhere. Actually saved 6 models each with variations to check on price and savings with differing concepts.
Last Thursday, I phoned Ikea Logan (Brisbane) to verify that all the parts required for my kitchen were in stock.
First potential obstacle, is that Ikea are "cash and carry only" meaning stock can not be reserved, you take your chances when you walk into the store with regard to availability of any item in store. Ikea do have an excellent call centre that can tell you availability of stock at the time of your call. If there are 5 or more items then you will be told the item is available without being told exact numbers. Shipment time of out of stock items is 2-3 weeks I was told, since it comes in from overseas.
I flew to Brisbane and at 9am turned up at Ikea Logan in my hired Ute from Thrifty who do not have airport pickup for Ute.
With some advice from the well-informed Ikea staff, I had my completed order in hand, luckily all items were available in stock.
Next I went down to the ikea warehouse to collect the parts. This is where it gets a bit difficult because as you can imagine there are a lot of parts to a kitchen. Especially when a typical Ikea cabinet consists of frame, doors, hinges which are all separate items you have to search out for on your own without staff help in the warehouse. Bench tops are different and are a mandatory 2-week order time unless you get standard size solid wood bench tops, which can be picked up in store.
By 11.30 I had 3 trolleys of parts and was lined up at the cash registers where they manually hand scan each part. I had about 100 items on the docket.
After finding where the hell I parked, I drove the Ute to the loading bay area and fulled up the tray with all the parts. Sweaty work,
Anyway by 1pm I had the Ute loaded, had some good cheap food and drove to my property. Lucky I didn't buy that bathroom vanity as hoped as it would not have fit on the Ute. I would recommend getting a Ute with cage rather than with tray with fold down sides.
Actually spent the rest of the day at Bunnings and CTM tile mart shopping for tiles and stuff. Spent sat evening/night preparing shower cubicle for tiling. Sunday morning carting rubbish to tip and Sunday evening/night tiling shower.
Monday morning started on assembly of Ikea Kitchen at 9am By 11am I had assembled 3 x 60mm wide cabinet frames and 1 x 400mm wide pantry frame. Took 1 hour to assemble the first cabinet but after that you get the hang of it and can assemble a cabinet in 20min. Assembly was as simple as any kitset furniture from ikea.
Next were the doors which gave me the most grief. Firstly attaching the hinges to door is easy but got frustrated attaching the two parts which make up a single hinge assembly. After 15mins realised I was trying to putting the parts together back to front, easy to do looking at the instruction picture. Also had difficulty getting the doors to align properly and adjusting the hinges made matters worst, work in progress.
Had no time to attach the bench tops as had to grout the shower at 3pm before leaving for the airport at 7pm.
So that's how I spent my weekend plus one day over. Going back next weekend after the painter has finished the interior.
Will install the kitchen proper with the kitchen painted, buy and install bath vanity and cart another load of rubbish to tip.
One Kitchen order consisted of 3 x 600mm wide bases, 1 x 400mm wide X 211 high pantry, 2x 600mm wide wall cabinets, 2 x 1200x600mm solid wood bench-tops, 1 x fan cabinet, hinges, knobs, stainless steel legs all up costing approx. $1500.
I'm just a novice to all this property investing game, but just though I'd put my 2 cents in by roughly itemising the 4k+ that I spent before arriving at a property investment deal that is surpassing my expecttions with regard to growth from outset and future growth due to property characteristics. Bought within my budget and am feeling comfortable with regard to my strategy and goals.
TafeSA – The Property School -Sydney Course $2500
(7 full day sessions with lecturers being practicing Accountants,lawyers,renovators, brokers, prop managers,property investors one and all)
3 return flights sydney- brisbane at $200 each = $600
1 day day Rental car each time @ $100 each = $300
0.25% penalty for canceling contract during Cooling off period $575
(well worth it – almost fooled by real estate agent tactics)
8 months worth of Property Investor magazine = $81
7 day Round trip Sydney-Brisbane-Adelaide-Melbourne-Sydney flights $500
Rental car for above round trip 4 days $400
Sydney-Melbourne-Adelaide-sydney flight $400
Melbourne rental car and accomodation $200
Building and pest inspection of sydney property I didnt buy =$700
Use of Sydney solicitor to get cooling off waiver of property I didnt buy = $350
RPdata reports for 10 properties @60 each = $600
Building inspection of Brisbane property I didn't buy = $500
Surfing this forum and Somersoft forum = free (interactive) (found a good broker)
Steve's one day seminar $700
One day seminar with Pickering and Bill Zheng $59
One Day seminar with Michael Yardney $60
Patrick Bright, Chris Gray seminar $50
Other seminars with element of good education but also an element of marketing of product involved =free
Investment expo entry $20
Books (I saved money buy reading books in bookstores in weekends and Thursday nights, (Only bought the ones I thought worth buying) bought 5 books at $30 each = $150
Various Software for analysis $200
5 reams of paper for printing out properties of interest but unsure of potential $30
Compact Street directories for Syndey,Brisbane,Melbourne,Adelaide @16 each =$64Rough total $9000
(..bit shocked myself to calc this figure for first time, but still smiling because of the inner city property deal (house/land) I just acquired at discount (multiples of above figure) relative to recent comparable sales in area.Was guzumped a couple of times and booked inspections on properties, I should never have even looked twice at. Put offers in on properties that, now I am glad I missed out on. Missed out on properties that were so right, but was too slow to act and also lost to dodgy agents favouring certain buyers and not passing on my offers.
Now I am hooked! looking for my next deal and any sources of equity. Can't walk past a book store without spending an hour browsing/reading investment and property books. Always keeping an eye on the various markets.
Hopefully a useful insight. (whether it leads to success, I guess in the end, it's up to me)
Abbruzzi
Brilliant!! thanks for the advice Richard and Philip. So glad to see I have options.
Philip, just a quick question. Will the broker think it is worth their while getting involved if the LOC facility is already set up?
I'll try it out anyway.
Regards
AbbruzziRichard,
Thanks so much for your reply.
Yes I intend to use all redrawn funds for Investment.
So you are saying, there is no need to redraw the 50k before getting a LOC. Because I will incur interest anyway by it not contributing to pay off debt, wheather it is in homeloan or IP.
I was thinking that in my situation I could just keep my existing home loan and redraw up to 50k for a deposit and fees. And get an interest only loan for any investment property I find. Then I wouldn’t need a LOC for the investment. But that would leave me with no surplus funds for anything that may eventuate, (personal or investment wise)
With a LOC I would feel safer that I have all the equity in my PPOR avaliable. And I wouldn’t be paying interest if I don’t use the LOC.
For future IPs the Line of credit would be advantageous though, yes?
Any thoughts?
Regards
Abbruzzi[biggrin]Thanks David,
Much apprieciated for your informed opinion.
I look forward to any other advice but I get the feeling you have hit the nail on the head.
Cheers
Abbruzzi
