Forum Replies Created
You asked how long would it take to be able to live off your investments? That depends on how much you own and what the rental returns are and what you consider a good figure to be living off per annum.
So for 10 houses if you owned them 100% and were making $12k per annum after expenses on each you’d be making $120k which would be satisfactory for a lot of people. You might own the same 10 properties and only have 10% equity in them and be heavily negetively geared and be paying out this amount, it all depends on so many factors, step one is set your goal like Steve and Dave did in book #1An interesting point you raise there, if you are environmentally aware it is a great idea but at the same time are your tenants likely to be? My perception is that renters are less likely to do the garden and lawn as it is not their house and don’t have that attachment to make it look perfect as they may move on in a couple of years. I think if you are selling it adds value however so could always be worth putting in for when the time comes to sell.
Short term I think for a rental money could be spent in other areas but when it’s time to sell it is a good addition!Thanks Troy and Bec, I’ll be there! You’re expecting interstate visitors? what all those sydney and west coast supporters are coming to the quest as well!!
Just something to add to Daves Opt 2 or 3 is the fact if you do have a HECS debt and make early repayments you get 10% off reducing the debt more quickly
Good question, hope this can help the understanding for a few people.
From a cashflow perspective it would be better to use the HECS system and put into savings/property. Although the 20% discount is quite attractive the HECS loan is only 2.8% which is the cheapest loan you’ll ever get. You dopn’t pay the debt back until you earn over $35k roughly in whuch case you then pay back the 4% and upwards on a scale. so for example if you earnt 35k in a tax year you’d pay $1,400 as a HECS repayment. the good news is your employee would withhold this based on your salary and so it would effectively be $27 a week less in your pay packet. A small sacrafice I think to have your money available to you.Buying the development without building might not be the best use of your money, is the site just land or has it got an existing dwelling? if it is land only it might not be the best option, at least an existing house gives a few more options. Remember there are always lots of options out there so don’t necessarily rush in, if the numbers work and it looks a goer then go for it!
I’d talk to them about your plans and strategies and ask your friends “so what sort of return do you want for your money?” make them give a figure so they are happy. Maybe 15-25% would be good range, really depends on what you are doing and what you afford to give away.
Don’t profit share, if you are the expert on the project take full control and make the decisions, you don’t want interference from the investor so make sure the contracts are in place to distiguish all this.
Best of luck
ChrisYou can do an ammended tax return for the period that it relates to by simply including a copy of the original tax return and writing a note such as.
Dear ATO,
On review of my 2004/05 income tax return I have become aware that I made an error. Section D5 should read Stationery $150 not Stationery $20 as stated. Could this please be ammended to reduce my taxable income to $47,587 $130 less to correct my error,
Thanks
Joe BloggsI have done this before and it works, just include photo copies of receipts, original return, ect just to ensure that it gies through as easily as possible or it may confuse the person processing it. As mentioned see whether it is worth the hassle first!
If you want to fast track your investing and get out of a 9-5 scenario you have to not buy your own home. saving and pouring money into your residence is much more difficult maonly due to lack of tax benfits in different areas. Could be different if you are only planning on living there a short time and taking advantage of the FHBG
I suppose if it were me I’d base my decision on how much equity I have in the house. If you live in it you will no longer be able to claim interest costs etc as tax deductions. Also be careful of capital gains implications. It all comes down to what are your life and financial goals?
Hi guys,
I PM’d to this originally so thought I’d share my contact for anyone interested.Graeme Johns 0421 837 743
I’ve known Graeme for 13 years and found him to be very reliable always. He lives in Nunawading and has recently gone out on his own and formed a partnership with another chippy so it is a great time to get him and form a relationship as he is in the establishing phase of his business. Any questions lwt me know or better still give him a call!
Chris
Being a former accountant I can confirm that what was said above is true. Each hour is worth 10 units so effectively we charged in 6 minute blocks! So if you called a partner for say 12 minutes on a chargeout rate of $250p/h the call can cost $50. It can depend on the questions you ask and even the mood of the accountant whether it goes on the clock. Something to be aware of though. If the question is easier and you feel a more junior accountant could answer ask to speak to them instead! Better to pay $90p/h for the same answer. It is part of the game I suppose just be aware and accept this is a cost.
Personally wouldn’t bother moving in for the $7k if you have a good situation living rent free for the minute. Depends on if you are planning on moving in at all or even buying another house in which (as long as they keep extending the FHBG) gives you time to get another and claim it then instead.
It is interesting to note that in VIC you need to occupy the house for 6 months whilst Qld doesn’t have a set time, sould have to reasonable I’d assume, eg get your address changed for bills licenses etc to show you are making an effort.
Yeah I know what you are saying, I’m still a bit sketchy on the whole thing. I’d imagine that you have access to the $8k otherwise as your calcs show why would you do it? It is just like giving your capital gains to the bank.
This is something I wrote and have been meaning to post so a perfect opportunity!!
Hi guys, I went to a seminar last month titled “Masters of Cashflow Super Conferenceâ€. Very interesting with the speakers being Bill Zheng, Rick Otton and Mal Emery. The seminar was cheap at $55 and the trade off was that they tried to sell their products, they all had different styles and were brilliant with their information and sales techniques, very interesting to watch. What may interest people will be a new positive cashflow loan product which has been created for investors. This is how it works to make your investment +ve cashflow
Say loan purchase price is $100k and you put down a 20% deposit ( I think this is a requirement) so your loan is 80k. The interest rate works on a sliding scale starting at 4% year 1, 5% year 2, 6% year 3, etc up to 8% I think. You can refinance after 2 years and put the rate back to 4%. So the rent you receive should yield above 4% making this a +ve cashflow investment.
Yr Rate Outstanding Loan Interest Rental Income Cash In
1 4% 80,000 3,200 5,200 2,000
2 5% 88,000 4,400 5,200 800
3 6% 96,800 6,400 5,200 (1,200)
4 7% 106,480 7,500 5,200 (2,300)
5 8% 117,128 9,400 5,200 (4,200)You can see that after a couple of years that your +ve cashflow dries up and it is time to refinance. So if the value doesn’t go up you would be disadvantaging yourself to refinance hence the reason it goes up to 8% gradually to be above the market rate.
Please don’t ask me what is the catch as I don’t know this is all the info that was released and I suggest keeping an eye on http://www.investorsdirect.com.au the product will be available from June 15 and demand is supposed to be high so may be a waiting period initially.
When Mum and Dad got a reno done on our house I asked them to borrow an extra $50k to help get me started. Advantages are that it is a cheap loan that can be used for the deposit. If you have 20% of the purchase price you shouldn’t have a problem borrowing the rest, may have to say the money is a gift so it all comes down to trust. At the end of the deal reward I reward my parents with a few extra thousand dollars.
Other ways are to get friends in on deals through personal loans maybe and then repay the loans for them plus a little extra each month. Lots of ways to fo about it just need a very good relationship and people who know the risksThe underpass alone cost $60m to construct, there are going to be approx 1500 houses with waterfront selling at 1.8m. It is absolutely stunning and well worth a look through the martha cove site sales office to see the detail and visuals of the completed project. I have invested in a project about 1km down the road at Saftey Beach which is looking more promising all the time as the Marina takes shape
If the deal is good and you can present it to family and friends with a share of the profit the money will come. Depends on how much you beleive in it, prior experience and the people you approach
Have you been to any seminars (eg Masterclass), great for networking and you will people who could give you better soutions than Oh really, keep reading and educating, trust me there is no hurry at your age
I suppose you have to ask yourself can you get the best price for the house? If an agent can get you an extra $10k then that may cover their fees and therefore a job best left to the expert
If you do go ahead and sell yourself I’d be doing research on the area and what they tend to put on advertisements and then the final selling price. Target some now and follow up when sold you know how they went.
Depending on who your target market is there are lots of creative options available
