Forum Replies Created
Thanks for the homesales.com.au site – a nifty little site for an initial search through regions you may not have considered before…
From my search parameters, Broken Hill came up quite a few times… possibly because of the lower max price I entered…
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
mmm, didn't know this one, will have to give it a try
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Yes, I do like the ability to watch posts on PI.com, great way to keep up with topics of interest!
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Brilliant, forgot that little trick!
Many thanks JacM
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi Derek
Great points. Your point about the 60 days reminded me about why we couldn't increase the rent – yep, sign a new agreement (short term!) on the current rent, work out what's happening and increase the rent as I can.
From some background checks, I dare say a lazy PM and landlord.
Anyone know of a good PM in Liverpool NSW?!? I'll have to pound the pavement.
Cheers
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Many thanks for your comments
I too was very surprised at the amount in the sinking fund vs administration fund but since the first AGM, the Administration fund has always been about 10 x the amount in the sinking fund. The amount in the administration fund is always just over the annual expenditure amount so my clumsy thinking is that the administration fund pays for the ongoing costs of maintaining the buildings and common property and the sinking fund is used purely for emergencies (ie in first year of the building's occupancy, admin fund was $200,000 (plus GST), proposed budget for the coming 12 months was $212,190 (GST incl), sinking fund of $20,000 (plus GST), second year the admin fund was $250,000 (plus GST), proposed budget was $259,620 (GST incl) and sinking fund was $25,000 (plus GST) etc etc).
If I was a prospective buyer, I wouldn't be so sure about the BC with a sinking fund so low…. I'm not sure how far $30,000 would go. Time to speak to the property manager about their approach here.
I am interested Catalyst that you do not worry about the BC when buying. Especially in a large complex, would it not take considerable time and effort to change a BC (while the building is continuing to fall into disrepair…)
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Many thanks Nathan
Yep, I thought many would raise it and good to see admin will resolve it soon.
Cheers,
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Being a stickybeak, I went onto mipsales.com.au and I kept getting a potential virus alert from my virus progam (AVG). Does anyone else get this virus alert??
I think I'll stick to the conventional 'bug the RE agents' approach if this continues….
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi all
This is a great thread, thanks for asking the question Glen, and thanks for the replies, great insight.
If I could expand/hijack this question, I would be interested in how people manage renovations 'from a distance' (eg house is hours away or in another state) where driving to the renovation each weekend/night isn't possible. Like Glen and the other replies here, my partner and I work full time (although the comments about taking some time off work to at least supervise the start/finish of the renovations appears like the go until you know and trust the tradies)
Cheers,
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
The Canberra property meetings are held at the Civic library at 7.30pm on the 3rd Tuesday of the month. As Jamie says above, search for Canberra Property Investor group on facebook (I think the link is http://www.facebook.com/#!/groups/236871996398420/ )
to keep up to date.Cheers,
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Very interesting link Terry, thank you
So it sounds as that if you have 1 or more investment properties, you may be able to claim courses etc…. must talk to my accountant!
Cheers,
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi,
I can second KeyStrategies thoughts about Steve's program. I was in the same situation as you New Starter (being overwhelmed by information and not sure where to turn). I am currently doing Steve's course and it gives me a great basis to think constructively about what others are saying (from what I understand Steve's course isn't meant to tell you what to buy but give you the foundation so you can take it the next step). If you are interested in Steve's course, email/call them today/tomorrow as there aren't many places left.
Talking with Nigel sounds also sounds like a great idea – if you are in the position to bounce your ideas off someone knowledgeable in the area grab the chance!
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi
I would also be interested in this as well (although from a renovations point of view). This was talked about at the recent conference (I am not sure if this is what you are referring to jonodick) as being sort of a 'get out of jail free' clause if the numbers didn't stack up.
I spoke with 2 local solicitors who didn't know about the clause but would be willing to look at it prior to putting it in any contract.
Cheers,
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Many thanks for your recommendations Jamie
Yes, I have heard that Kelly is good. Is she with Cosgrave Soutter in Civic? I can not find her in a Google search
I looked up Michael's details at Trinity Law – is good to have someone who specialises in property
And thanks for your other recommendations, good to have a full house of professionals!
Cheers,
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi Terry
Coming through clearer now. I am interested in your comments about the personal guarantees and understand what you are saying about having one person as a fall guy. From this, I would have thought that if one person was the trustee with all the investments under the trust,and the other partner owned the personal assets (PPOR, cars etc) then the personal assets might be protected. My accountant countered that by saying that they could go back in history, see that your share of the PPOR had been transferred to the your partner (at some point in history) and still seek the PPOR if the assets in the trust didn't repay the debt.
Could you also please provide comment on my comment above that if the deposit for the investments under the trust came from a loan that was attached to your PPOR then the PPOR is at risk due to the trust becoming linked to the PPOR through the deposit money loan.
In another thread, you wrote
"As for asset protection it is not just as simple as setting up a trust it is but how it is set up and how you use it. I can think of around 10 ways that a trust could be attacked if done incorrectly."
Which interested me, could you please expand on this more; as you can see I am looking at why my accountant is rather anti-trust but a lot of investors are pro-trust/company.
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi Coutts
You could try Nathan Birch – binvested.com.au. Do a Google search to see the renos he has done and a search through this forum will bring up a few results about him.
Cheers,
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Terryw wrote:eg. What if you set up using a discretionary trust with a company as trustee.
A tenant gets injured and sues the owner – the $2 company has no assets but the assets of the trust could be at risk. Generally the people behing the company are safe. Directors are more at risk, but shareholders of a company can only lose the value of their shares. But if a director of the company knew there was an electrical fault and didn't repair it or take any action then they could be personally at risk. So their personal assets will be available to creditors. If the house is owned jointly then this would be only their share – generally.
So this is a good reason to use a company as trustee and to have one director.
Hi Terry
Thanks for your valuable comments. From a cost/input vs. risk point of view, if an investor chose not to go down the company or trust path, are there options to protect from the situation you mention about a tenant falling over and suing the landlord – would Landlord insurance cover this? In what situations would the tenant sue the landlord for damages?
You also talk about if both parties personally guarantee the repayments then regardless of whether the property is bought under a trust or company, the bank will seek assets under both names to recoup costs. This would then make buying properties under a trust or company structure a rather pointless exercise??
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Certainly keep reading through the forum, as well as books, magazines etc so you can be prepared to actively discuss your accountant's thoughts (rather than just blindly taking advice that is given), but be prepared that your accountant may advise setting up a trust (in the early stages anyway).
I am aware that many very active investors haven't set up trusts until they had many properties (over 10 I think), so there are other options for asset protection.
If you do a search for 'trust' on this forum, you will find many pages of threads, all which talk about different angles of trusts
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi Janine
Similar to you, I researched this forum and books, magazines etc etc etc about trusts before going to my accountant for advice (who owns IPs themselves and has other clients with IPs and trusts). We have a set up similar to what Jamie is referring to above (second mortgage against our PPOR for investment deposits etc). When I talked with the accountant, I was told that since we would be using money from the second mortgage which is attached to the PPOR, that regardless of whether we bought the IPs in a trust structure or under our own names, the PPOR would be exposed to any risks associated with owning IPs, making the complex and costly setup and management of a trust not worth it.
It also depends on what type of properties (neg geared, pos geared, cash flow +ve or -ve) and how many you intend to own. My accountant advised that unless you are looking to go into a lot of debt as part of buying several -vely geared properties, again a trust structure may not be worth it.
If you have an investment property savvy accountant, run the questions by them to ensure that you are not making things more complex than they need to be (and to be sure that you are all on the same wavelength!).
My accountant's final advice was to ensure that we have our insurances up to date (income protection, landlords and PPOR house/contents, life etc etc) and go into the IP buying process with our eyes open (understanding what each IP means to our bottom line and not buying 10 over the next 6 months, getting ourselves in a mountain of debt then saying what do we do now when we can't keep up repayments??)
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
Hi G
Good question and I would also be interested in the response.
I visited my accountant the other day to enquire about establishing a trust and was advised that even though trusts may be popular, they are very complicated to manage and may not provide all the benefits that we first assume they would (ie a trust may not provide the asset protection we are looking for and that the tax benefits from -vely geared proeprties can't be passed on from a trust). He has advised to keep buying under our personal names and ensure that we have our ourselves and investment properties adequately insured.
We are also buying in the price range that you specify above.
Any experienced trustees out there who can explain the pros and cons of buying properties under a trust as opposed to under personal names?
ChrisA1
Persistence is 'to keep on keeping on, no matter how hard the going may be'
