Forum Replies Created
- Originally posted by Nat R:
[brOK lets say you borrow 100% of $100,000 and a month later the property market has fallen by 5% so your house is worth $95,000.SO WHAT…its not like you are forced to sell at this point or your chickens will stop laying.
Think about a car lease you borrow $30,000 for a $30,000 car and the next day the car is worth $28,000 …nobody takes the car away from you.
Nat,
You are absolutely right – and totally missed the point
The aim for most investors is to not simply buy a property and sit. It’s to buy and buy and buy and buy some more – using equity to leverage purchases.
If you purchase a property & are left with no equity and no short-term prospect of gaining equity it can really slow down your purchasing cycle & significantly increase the time it takes to build wealth.
Cheers,
Aceyducey
Quote:Originally posted by Terryw:but you will also have to pay CGT as it is considered a sale.
Quote:This is true if you sell AT A PROFIT – the other approach is to sell to the trust at the price you bought it at & avoid the CGT entirely.Then refinance the property once in the Trust.
Just be cautious about setting your own comps
Cheers,
Aceyducey
No change in rates.
Tha’s fact not opinion BTW
No commentary this month til the 7th (from the RBA).
I like how the media are still pushing the ‘rate rise must be coming soon’ line. Remember it’s not so much about what is real as about creating controversy!
Cheers,
Aceyducey
Originally posted by Pisces:Beggars cannot be choosers.
If one wants to make money fast (well, as fast as possible) then one cannot avoid having to put up with the inconvenience of living in a house which is in a constant state of upheaval because of the renovations required.
Our approach always has been for one partner to live & work full time in the property & the other to be based at home with the kids during school weeks.
Then the kids come and live in the property under reno on weekends & during school holidays.
They’re pretty good at helping or at least staying out of danger & have become very creative in the stuff they make (my 4yr old daughter made me a wood duck for my last birthday)
Of course this involves having a residence separate to the property under renovation
Cheers,
Aceyducey
Originally posted by wayneL:I believe there are some interesting tax implications as well….as you are not selling an asset. Any accountants to expand on this?
Not an accountant, but have looked at it in depth.
If you’re living off equity you don’t pay tax. Simple as that. Equity is NOT taxed unless you convert it to cash by selling assets. Borrowing against assets isn’t taxed (as anyone who’s ever refinanced to buy more assets will know).
If you buy annuities, the interest on the annuity is taxable but not the rest of it (the bit you pay for from the refinance of your equity).
I wouldn’t advise this approach for people who rely neavily on negative gearing
Cheers,
Aceyducey
Look beyond Victoria
Cheers,
Aceyducey
Kay’s correct on buying well – remember you can pick the purchase price, you can’t pick the sales price.
You could add value to the IP – depending on the IP this may or may not be an option, but some of the approaches include improvements (renos) and repurposing (4 bedroom house to student accomodation, townhouse into an office).
You could also simply wait awhile….depending on the property the time it will take will vary…but you are saving money as well aren’t you
It gets progressively easier as you have more properties, so just keep the ball rolling – you’ll get there.
Cheers,
Aceyducey
Marc1,
Have you researched this concept thoroughly?
I have & am satisfied that it works in certain circumstances. I also are aware of at least ten people/couples who have employed this approach via Steve Navra over the past ten years & are doing extremely well. He’s also worked with a lot of people I don’t personally know
I seriously suggest you investigate the approach further before knocking it – at worse you’ll know it’s bunk – at best you’ll decide to do it yourself…and on average you’ll have another tool in your investment toolkit
BTW: No I’m not using it myself at present as it’s not appropriate for our investing goals. However I keep the strategy in mind for the appropriate time
Cheers,
Aceyducey
Go Mini!
It’s great to see people succeeding
Cheers,
Aceyducey
Originally posted by Fern:If you are paying tax, smile – You made a profit – If you are paying heaps of tax, smile harder, you made a BIG profit[thumbsupanim]
I agree Fern!
And besides, I like using roads & hospitals, sending my children to school & having law and order
Cheers,
Aceyducey
You gotta love that emotive journo language ‘verge of collapse’….
And of course they talk to Australian Property Monitors because they’re the only ones who are predicting this
Balance in journalism only refers to bank balances!
Cheers,
Aceyducey
