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Well done. As mentioned don't over capitalise.
At this stage I would look at the wall being removed. Put in a kitchen and paint. Garages etc can be done later.Be very careful about early access.
The owner may decide he sold too cheap after looking at the reno and how much it's worth and not want to follow through with settlement. In this situation I would get everything organised first then do a quick reno after settlement. For what you want to do it's only a couple of weeks. Have the kitchen ordered and ready to go. Clean, paint, tile.
I know a few but it really depends on where you want to invest.
Just my opinion but with a "national" service do you know who you will be dealing with? Who will be sourcing your purchase?
I llike the personal touch. Speak to the BA, let them know your specifics etc.
If you live in property B it is your PPOR so you pay no CGT if you sell. Your partner however is not living there so he will pay CGT on his half. This could change if you haven't been living there the whole time. But if you liced there from the start then rented it for less than 6 yrs you still don't pay CGT.
If you sell after 12 months the CG is halved. ie take all buying costs from the sale price. That is the CG.Then it is added to your income so it depends on your tax rate.
Hope that makes sense.
I'm pretty sure this is right but check the ATO to be sure.Why? Are you going to use them? A better question may be- does anyone know a good buyers agent.
What area are you looking at? What's your criteria?
Investing in Bali can be tricky. I know of people who have lost lots of money by not having contracts drawn up properly and trusting a "friend".
The laws of ownership have recently changed for foreign ownership.You really need to do your homework on this. As mentioned the language barrier is a problem.
saurin_83 wrote:Response to Catalyst, I am 27 years old plenty of time for retirement, I have read this book from Michael Yardney (how to grow mulmillion dollar portfolia in spare time) through this book I understood that over the time when I reach to retirement age I can use my equity as living cost (which would be tax free, ofcourse more debt) compare to cashflow (which will have taxon that). I recommend you this book. it goes in very details how to live off your equity.
SaurinThanks, I am well aware of the merits (and pitfalls of Living off Equity). I'd suggest doing a lot more reading than one book before assuming this is a viable road to take.
Remember we are in a time where some properties have seen NO growth in 10 years. Hard to live off that. Also we have been in a credit squeeze. You assume the banks will lend you money. When you are retired banks may decide not to lend you money based on equity alone. Just food for thought.You don't need to go to a new bank. Just get a LOC (as you said) on IP1 and use that as a deposit. Get a separate loan for the next. Repeat with IP3 etc.
saurin_83 wrote:I am newbie in proprty investing and potentially looking forward to financial freedom through property investing. My long term goal is capital growth from property investment rather than cash flow.
SaurinHi, just curious- What are you going to live on in your financial freedom without cashflow?
There are ways, I'm just curious as to how you plan to do it.
You can claim you LOSSES. as mentioned above. Add everything up that you pay, take out the rent. You deduct what's left.
Unit LL insurance is only $300 (tax deductable). More if you don't use an agent.
You can let it yourself but do you know the rules and regulations? How to choose/get a good tenant? etc.
Speak to an accountant that has a property portfolio. They will know the best ways to claim. They will lodge the tax variation form or you can do it yourself. You need all the figures I mentioned above (and your wage).
So are you $70- just on the interest payments minus the rent?
OK add up all the ouitgoings for the year (Interest, rates, insurance, managements fees (6%- depends what state you are in) THEN take away the rent.
That's how much you are negative. This is how much you can claim on your tax.Think about getting a depreciation schedule, that will save you at least a couple of hundred dollars a year.
Definitely get Landlords insurance (about $300). That covers you for rent default and building, liability etc.
I would always choose buying.
But renting may be better for you if you want to live in a certain area.
eg if you want to live close to the city you'd be better renting as yields are low. BUT I'd still buy in an area that has better yields and rent it out. That way you are at least keeping pace with the market and can buy in your desired area down the track.
If you find a place with a good yield you may pay very little )or nothing) out of your pocket.Terry is correct. Check your rates notice.
I was actually surprised with one of mine. It's a small unit worth $280K. Land value is $100K. Small block but I was VERY surprised.I don't bother with building and pest inspections for units.
If there are any issues they will be in the strata report.
I think getting all building, pest and strata is a bit of overkill.
Yes people do buy sight unseen but they usually have:-
done their due diligence on the area, the prices, yield, CG etc.
Have you done all those things? Do you know the area is what you are looking for? Is the street a good one? Is the infrastructure there? What is planned for the future? Is the price under market value for the area? Is it desirable for tenants (vacancy rates in area)? What is the expected rent (yield)? What are the past capital growth figures? Does it need a reno? Will doing one increase equity/yield?
If I knew all those things I'd buy sight unseen.
House Call wrote:tongue in cheek, ladies. Tongue in cheek!haha. After I posted I thought that may have been the case. Haven't had a chance to check back.
You're forgiven then.Sometimes agents ring my hubby. He just tells them to ring me. He knows how many houses we own but that's about it.
He'd die if he knew how much we owe the bank.First get a new accountant that will spend more than 30 seconds explaining how it works.
Rent is an income. Take away all the costs (Management fees, Interest, rates, repairs etc) take that away from the rent. If you get a depreciation report you take that away too. If the expenses are more than the rent you claim that as a tax right off.
You can do rough figures yourself.
Maybe your broker was assuming (by increasing equity) that you meant you would pay down the loan. If you did that THEN withdrew that money for a PPOR THEN you certainly would NOT be able to claim tax benefits.
If the money was placed in an offset account then withdrawn, that's another matter.
Get it right with this or you can lose thousands.
Sounds like you are not quite ready (waiting for the RIGHT time). There are bargains in ANY market. I'm buying in Sydney and will again. Not as many bargains as in 2008 but they are still there.
I have one small LOC that pays everything.
The interest goes out of this into all the loans. All the bills are paid out of this same LOC. All the rents go into this LOC. Easier for the accountant. He only needs to look at this one LOC. The interest on this LOC comes out of itself.
Hopefully soon it will start going down and paying itself off.
House Call wrote:I have a Y chromosome, and I have sometimes found the exact opposite.
I get ignored while my wife is fussed over and shown the beautiful benches and the lovely shower or bath or the wall oven or bla bla bla which I think springs from the view held by some RE Agents that if they can get the girl to fall in love with the property then she'll convince/nag/hound her hubby to come around to her viewpoint and buy it for her (and do the Agents work for them far better than they could). Which is just another probably sometimes effective sales method I suppose.
Anyway , on those occasions I can have a proper look at all the rotting timbers and crumbling gyprock and rusted out gutters in peace. Then pour cold water all over wifey's temporary little dream.
Not exactly the opposite.
Yes the REA is giving the "wifey" attention but only because they think she is only interested in shiny new things and will need her husbands approval.
Going by your response you also support this view. I feel sorry for your poor "wifey" who is too awestruck to see past the shiny bathroom. This is the view most women are trying to get away from.
Some of us are serious investors and wouldn't care if it had a shiny bathroom. A REA once showed me a house with a lovely bathroom but that's all it had going for it. "Nice house isn't i?t" she said. "Hell no" said I and pointed out the reasons.
Stereotypes!!!You need to look at it in perspective.
If the area is a good investment then yes by all means buy. But to buy BECAUSE you can get a $1,000 a year holiday doesn't make economic sense. And remember the trip is tax deductable NOT paid for by the tax department.
Better to buy a property that will have the best financial outcome and that will pay for your holiday.
