Forum Replies Created
As the owner of a Unit you should have access to the Body Corp records and the owners of each unit.
You could then write to them directly or even go thru the Body Corp to get them to pass on the letters etc.You would need to get a loan against your current home to get access to teh equity 30K. Then borrow $270k for the rest.
So in total your loans would be $300k.Don't forget about legals and stamp duty and other fees etc.
So you will be going for 90% loan against the investment property $270k and the depost + fees from you equity.
From my understanding the quote the amount because of the fees to setup and run a SMSF.
You need that amount to get a good return to cover them as there is a yearly audit needed and it costs about $1000+ per year.I would say that the investment would have to be netural to positively geared to be able to do this thru super fund.
Seek out so advise from a certified finanical planner or accountant.
Campbelltown is no longer the outer suburbs of Sydney and the prices are more then a few years ago.
I have not looked into it recently but Sydney over all is struggling along.They changed the name to
PAYG = Pay As You Go withholding tax.http://www.ato.gov.au/individuals/default.asp?menu=1129
PAYG income tax withhoulding variation (ITWV) form for a employee
http://www.ato.gov.au/individuals/content.asp?doc=/content/00096541.htm&page=3&H3=&pc=001/002/040&mnu=1132&mfp=001/002&st=&cy=1Here is the form for 2007-2008 tax year
http://www.ato.gov.au/content/downloads/n2036-03-2007.pdfJon Chown wrote:Danish83,
On the surface of things, this appears to be a reasonable deal. At $135,000 per 80m2 2 bed unit, I am guessing that it must be in a outer or remote location or that there are problems with the Building.
Showing a 6%gross return, I would want better than that. The weekly short fall is going to be around $600 and I am thinking that there would perhaps be better individual deals around. Hopefully there will be ways to increase value to the Block.Jon
I am not sure you have the figures right.
Purchase 750k with 20% deposit
Oweing would be 600k
600k @ 7.5% PA = 45000
Rent 935pw x 52 = 48620
This is profit of $3620 PA.This does not include any fees etc so at first glance it looks okay.
runinniv wrote:What is a PPOR? – sorry, new at this. My guess is own home? if so, we rent.
PPOR = Principal Place of Residence. This is your own home.
PPOR 500k (Sydney 1999) owe 180k
1st IP 290k (Sydney 2002) owe 321k
(Bought in Sydney at height of boom)
2nd IP 350k (Cairns 2006) owe 300kLVR 1140k owe 801k = 70%
You should not have to pay for the modem as this is normal a requirement to run the account.
It’s just like a telephone. You do not have to provide a phone for them so you do not have to provide the modem.
It is up to the renter to pay for this.
ChrisAll post are IMHO.
Originally posted by arrowsmith:I am renting. My partner & I have good incomes & no dependents and I am 30 years old.
We have a very good combined disposable income. We are just starting to build savings after a long trip overseas.
Our rent is cheap (1/7 of our income) but the place is very old and run down. At this stage the only incentive to buy is emotional.
Stamp duty in Vic is ridiculous. We are looking to buy around 400 – 450k and at that price stamp duty will be $22,660. If we don’t have 20% of the value we will end up paying LMI also which could be as much as $14,000.
That’s a straight up dead cost of $36,660 for nothing.
I just can’t make it add up.
Say the capital gain on an average Melbourne property is around 7% (annual), and that’s if you’re doing well, we’ll be ahead of the game if we just continue to save and put our cash in managed funds or a high interest bank account (on which returns will increase as the official interest rate increases).
It will take us a year to save 90,000k to sink into an investment that is VERY average ie. property.
Why do people do it? Am I missing something obvious here?
If someone told you it would cost $36,000 to get into a $450,000 investment (that you don’t own) that MIGHT earn 7% and that you would have to pay 7% (and increasing) would you do it?
It sounds like a dud to me, but I may have it all wrong.
The one thing you may not be seeing is the leverage.
From you exmple you are earning 7% on $400k which is $428K after year 1.
To earn the same return on the $36,660 you would need to get 76% return in year 1.If it was you PPOR you would not be getting any tax deductions.
If it was an investment property you would get tax deductions.Rent – Interest on loan – Management fees = income
If this income is CF- then you get to take this off your taxable income
If this income is CF+ then you get to add that to your taxable income
You also get Deprecication off your taxable income.With all this if you buy at the right place and get the a good rent it may not cost you anything out of you pocket and then you get the capital growth on the value of the house.
ChrisAll post are IMHO.
IO – Interest Only is that you are paying Interest Only and none of the Principle.
This is good if you have any non deductible debt as Terry said.
Paying IO will allow all your spare funds to pay off that debt first.
If you do not any non deductible debt then paying of with P&I will allow you to get equity and with growth you can borrow for further investment.
ChrisAll post are IMHO.
Yes even tho you cannot get anything for the building there are still stuff inside and out that can be depreciated.
ChrisAll post are IMHO.
The % returns depends on the property value. Is this % from the begining or from the current value of the property?
Have you increased the rent in line with CPI?
Does the rent cover your payments?
Is the Property CF+?If you are making money from it then why sell.
If you have equity and from your posts you do then use that to invest elsewhere.
ChrisAll post are IMHO.
I would suggest you get a couple of books and read about proptery investing.
This will then help you narrow down what type of property you want, your price range etc
Then you need to search for a place and find one which is suitable for you. This seems to be the hard bit in finding a CF+ property.
ChrisAll post are IMHO.
I would pay off your PPOR as it is a non-deductable debit.
With most LOC even if you pay it off the account is still open and you can draw back on it for deposits and costs.
ChrisAll post are IMHO.
Usually costs are about 5-10% of the property you are trying to buy.
Without equity you may need to save this up.If your LVR (Loan to Value) ratio is more then 80% you usually have to have LMI (Lenders Mortgage Insurance). LMI is for the lender not you. This could add a few percent to the cost.
So your looking at about 110% of the cost of the property.
So a $300K property would cost about $330K all up.Have you purchase property before in your name or with someone else? If not you maybe able to get the FHOG
http://www.firsthome.gov.au/There are plenty of ways to get lending done so as Richard said speak to a Broker to get the ball rolling on what you can do.
ChrisAll post are IMHO.
You may have to talk to one of the brokers on here.
Depending on income you may be able to find a loan for 100% + costs.
ChrisAll post are IMHO.
I found this website with a quick http://www.goggle.com.au search
http://www.sydneycu.com.au/content/upload/files/sydney/calcs/budget.htm
ChrisAll post are IMHO.
Basically John would not have to pay tax as income less deductions for investments gives him 0.
On $100k this year 2005-2006 you only pay $32050 tax.
ChrisAll post are IMHO.
One thing is to check with your accountant but if the current LOC you have has any funds used for your PPOR or any non-tax deductable reason you may have an issue with claim the whole interest on the LOC.
See if you LOC can have multiple accounts and if that can happen you can either create account for the 20% + expenses deposit or for the 100% + expenses.
If you purchase the IP outright with funding 100% from the LOC you and the IP has settled you can use that to get another LOC/loan or increase the limit of your current LOC.
This will allow you to purchase other investments.
ChrisAll post are IMHO.
The problem is that I don’t think anyone can pick when the bottom will be.
It may be now or could be in 2 years.
It’s up to you when you buy.
As it is definitly not the top of the boom it should be fine to buy at any time so long as you can handle the payments if the market continues to go down.From the prices out there I think in some places like Sydney they are still going down but other places going up.
You need to do a lot of research and trust that.
ChrisAll post are IMHO.
(Bought in Sydney at height of boom)
