I have no experience with covenants at all and would advise you to approach some professionals. If you can afford it, you may be able to buy the block, put a nice house that suits you onto it and sell it again. You may kill two birds with one stone (keep the views you want and make some money at the same time).
.

Reno and hold is the same strategy as buy and hold. If you can create a cashflow positive property by renovating, you do not need to sell.

The idea of cashflow positive properties is not to need the equity to fund your lifestyle costs, rather use the profits. As Steve said if you have 100 houses that make $20 a week, you have $100,000/year.…[Read more]

This is really sick.

This is about the fourth or fifth scam in the last 24 hours. They are trying to get personal information from unsuspecting members.

All have yahoo e-mails, a similar layout and their credentials cannot be found in google and they try to attract people with really low interest rates.

Daniko I made a couple of comments to your original post:
– If you decide that you want a house rather than a unit, you may look in more rural areas where houses are still cheaper.
– You seem to be concentrating on long term capital gains. While that is fine, the current climate is probably better suited to either finding a cash flow positive…[Read more]

This is a very interesting situation.

I am thinking of buying a property on a long settlement (because of subdivision) but renting the property of the owner with the permission to carry out improvements to the property. I then want to sublet the property to a normal tenant. I certainly would put this all in my offer, but according to Dr X I…[Read more]

I agree with Terry.

But I definetly recommend to talk to an accountant.

Mine gave me one page of advantages and one of disadvantages.

The main advantages are the possibility of income streaming to stay under the 30% tax and the asset protection.

The main disadvantages are the setting up and running costs as well as the inability to forward…[Read more]

“F.Y.I, my idea of a valuable property is one which is close to all amenities, in an area that has potential for future growth, is below the median house price for that suburb, has good rental demand for that area, is built after 1987, has land content and has a rent return higher than the existing variable rate of interest. As you can guess, this…[Read more]

In my case I have just started a family trust for investment purposes. But because I am the guarantor on the loan, my ABN (which is seven years old is good enough.

Argo it seems to me that your investment properties are cf-, otherwise you would not have a problem to service the debt.
The main advantage to sell the house and rent (not downsize) is that you access 100% of your equity. If you borrow against your house you will only get 80% without MI and 90-95% with MI.
Selling your house and buying a slightly…[Read more]

True, but if you have an ABN to quote you can get a lodoc loan without having to prove your income. The theorie behind that is that self employed people often cannot produce good financials. However I believe there is a two year waiting period applicable.

If you can get a lodoc (and there are lenders giving 80% LVR), you should not require more than one securtiy. That is something I would try to stay away from. It may mean that you have each property with a different lender.

If your partner only shows $30,000 on his tax return I assume he is self employed. That would allow him to get a lodoc loan if he has an ABN. But be careful, as the ATO may start asking questions down the track.
Lodoc loans normally get 80% LVR’s (loan value ratio) at about .5% higher than market interest rates. But you do not need to prove…[Read more]

“The truth was that the vendor would have accepted a lower offer, we knew it and the other agent knew it, however, that information should be kept confidential, not for purchasers to know EVER!!! ”

I think there is a fine line between keeping this information confidential and also getting the sale. If the vendor is desparate and somebody is…[Read more]

The easiest way is to just ask the real estate agent, they normally have this in their paperwork. But it is a pretty useless figure. Eg I just looked at a house yesterday that sold for $63,000 back in 1988. So I know that if I buy the property for $180,000 the previous owner made $117,000 less expenses. Good on him.

But running this as a business has many risks associated that you can avoid in a trust. Imagine something goes wrong. If you trade as an individual, you could loose everything, including your personal home.
You do not need to have one partner as an employee in a trust. At the end of the year you can just choose how you want to distribute the…[Read more]

Strata Titles are on the way out and have been replaced with community titles. My understanding is that with community titles there is much less shared property (eg you own the roof on your unit and you do not have to coordinate with other owners if you want to reroof).
Normally community titles are used because the council will not allow torrens…[Read more]

Hi Dave,

you definetly want to talk to your accountant about this one.
My understanding is, that as long as the land sale does not exceed the original buying price, no CGT is payable (as you mentioned, it is defered).
Buying as a trust is a good idea (again consult an accountant), but is not necessary for the CGT. You have to pay CGT on 100% of…[Read more]

Did Steve’s mappers actually have licenses for their bird dogging?

My accountant had my ‘family’ trust set up, but he did use a solicitor. I wanted his opinion for the best structure first and was happy to pay him to liase with the solicitor rather than trying to communicate what should be included and making a hash of it.

It will certainly be wise to talk to a professional about this, but my understanding is:
– If you have the property for 12+ month, you only pay CGT on 50% of the profit if you are an individual, partnership or trust. Companies do not get this concession.
– If you have a trust you have a lot of creative ways of splitting your income limiting you…[Read more]