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  • Profile photo of bickybicky
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    @bicky
    Join Date: 2007
    Post Count: 12

    hi kurnster,
    where abouts in melbourne is it?
    what suburb and address?
    and have you found someone yet?

    bicky.

    Profile photo of bickybicky
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    @bicky
    Join Date: 2007
    Post Count: 12

    hi kurnster,
    where abouts in melbourne is it?
    what suburb and address?
    and have you found someone yet?

    bicky

    Profile photo of bickybicky
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    @bicky
    Join Date: 2007
    Post Count: 12

    the 12 month period starts from the date of contract,  and i think it finishes on the date of contract for disposal, not settlement date.

    if you buy , with a buy contract on 1-oct-07 and your buy settlement is on 1-dec-07,

    and you sell with a sell contract dated 1-sep-08 and your sell settlement is dated on 1-dec-08,

    then i don't think you would qualify for the 50% cg discount.

    bicky

    Profile photo of bickybicky
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    @bicky
    Join Date: 2007
    Post Count: 12

    thanks richard,
    i was not aware that these were standard morgage terms.
    i guess this was what lia was explaining.
    how then, do i obtain some form of asset protection, reguarding other properties?
    maybe, have some properties in my name only and some in my wifes name only. would this help?
    if the property was bought in my wifes name and the morgage was in my name ,this would not help either would it?
    can you have this situation anyway?

    i dont fully understand companies and trusts and how they operate.

    any answers or comments are appreciated,

    many thanks,

    bicky.

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    @bicky
    Join Date: 2007
    Post Count: 12

    hi marc,
    thanks for your explanation. i still understand it a little different.

    lets base this senario on a wage of, lets say $60,000 with a flat tax rate of 30%. [ even though it is not right because of the sliding tax scale, but just to simplify it a bit ].

    tax to be paid would be $18,000.

    $170 p/w rent =$8,840
    this would give a new taxable income of $68,840.

    to come off this amount would be your deductions [ costs,depreciations,etc ].
    $200 p/w=$10,400.
    20% of rent for holding costs=$1,768.
    2.5% of $100,000 for depreciation=$2,500.
    total=$14,668.

    $68,840-$14,668=$54,172 
     new taxable income=$54,172.
    tax paid should have been $16,251.

    $18,000-$16,251=$1,749.

    tax return = $1,749.

    now, next step,

    property income = $8,840.
    property out of pocket costs = $12,168  being for interest & holding cost. [ depreciation is not directly ouy of pocket ].

    sub total, out of pocket expense for property = $3,328.
    take tax return $1,749 ,off  this expense $3,328 = $1,579.

    now ,total out of pocket expense for property , after tax is $1,579 = $30 p/w.

    i would now think this property is neg-cash flowed by about $30 per week.

    i would like to know if these calculations are wrong in any way.
    it would help my learning & understanding of the tax system.

    please reply marc ,or anybody else who may be able to comment.
     
    many thanks,
    bicky.

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    @bicky
    Join Date: 2007
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    hi Lia,
    thanks for your response.

    if you only borrow 80% of the value of the property,  you should be able to get a morgage without a clause in it that allows the lender to claim against non-morgaged assets if you default on your loan. [ or even other morgaged properties].
    also without having LMI to pay.

    this would also help the property be closer to cash flow positive.
    these are the lines in which i would like to continue investing in. 

    bicky.

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    @bicky
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    Richard and Terryw, thank you for your response.
    if ,i felt the property market was at the start of a boom, i would consider borrowing 100% + costs, and allow them to be neg geared.
    but, i still want to be in the market with the properties closely covering costs, [ with the right sized deposit ].
    i thought maybe with one loan i might save on monthly bank fees and application fees,etc.
    is this not a good idea because it would be harder to see what each property is doing reguarding tax?
    what problems might i have if the lenders terms changed?
    any other reasons?
    excuse my ignorance, i'm still learning.
    thanks again
    bicky.

    Profile photo of bickybicky
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    @bicky
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    fatboy1730 wrote:
    There is a lot that can be said about making rather than buying a cashflow positive deal. All of that has been well covered in many posts. The burning question that doesn't get answered is "are there cashflow positive deals available of the sort outlined in Steve's books?".  We have found a place in reasonable proximity to Melbourne where you can buy lettable property on a good enough yield to make a purchase with up to 95% financing either cashflow neutral or positive. We have two houses there. Here are the numbers on one of them. We bought this in February. We paid $85,000 and the tenant was pating $115 per week in rent. He left and we spent a few weekends and about $2000 on paint and materials. Result $140 per week. A one and only? No we did the same thing down the road about 500 metres. Bought $84,000, untouched apart from new flyscreen mesh on a door this rents for $125 per week. These properties are two bedroomed and are on subdivisible sites. Friends have done the same 3 times in the last month.
    Hopefully this will show it can be done with a bit of research. We are going to build on the subdivided land which will make the deals all the sweeter.
    Have a look at Morwell. Have a look at Morwell. Have a look at Morwell.
    There I've said it three times so you can't miss it.

    hi fatboy,
    these houses in morwell, are they in a commission area? 
    and if so , do you think  there will be much capital growth there?

    would it really be worth building new in a commission area?
    you would have the best house in the worst street, so to speak, (after subdividing).

    bicky

    bicky

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    @bicky
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    hi  LA Aussie,
    to your reply back on april 19 -2007
    if you borrow $139k (for a $150k property)  @ 7.5% interest.
    how do you get  $10 per week positive cash flow, after tax, with rent at $170 per week.?
    considering a building depreciation claim (off set) of $3750.
    have you included holding costs and have i understood the depreciation claim right or not?
    i have some experience, but very much still learning, just trying to learn more.
    thanks
    bicky.

    Profile photo of bickybicky
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    @bicky
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    hi,   my accountant charges me about $4oo for my wifes return, my return (i work for wages), some shares and two i.p.,

    my wife has everything set out clearly and neatly for him.

    Profile photo of bickybicky
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    @bicky
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    Post Count: 12

    hi;  could someone please tell me what FHOG stands for.    thanks,             jack.

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