Forum Replies Created
Christopher has been putting some well scripted posts together recently – thank you for your efforts in making “accounting-speak” easy to understand [nice3]
Just as a follow up to the original question;
Let’s say you depreciated an asset (eg, $2,000 A/C) completely over, for example, a 10 year period, but then when you decide to replace it with a new one, you manage to sell the old one for $100.
Is that extra $100 (on top of a cost base of zero) considered a captial gain (and would it therefore attract the 50% reduction) or is it considered a revenue amount for the current financial year?Many thanks,
ClintSee what I mean? [confused]
Have a look at Toms Hardware Guide (tomshardware.com), they do an ok job of it.
Well said Jo [biggrin]
Whilst I too find the links a tad on the annoying side, it must be realised that web site maintenance doesn’t pay for itself.
However, perhaps some effort could be made towards making the links somewhat relevant.
That is, pick certain definite words as links, and use only those words.
Recently someone wrote a post which included the word McDonalds. The “…cD…” was underlined as a link with a reference to Steve’s CD’s etc.Now that is very annoying as it interrupts your attention towards the sentence to see bits of words highlighted.
There’s my million dollar’s worth [wiseguy]
Regards,
ClintIn NSW you have to obtain the registered owner’s permission before submitting a DA.
Most local council’s DA forms include a space for the owner’s signature where the owner is not the applicant.
A couple of years ago I asked the council I was dealing with at the time why this was necessary (I was looking after a tenancy refurbishment, the owners had no problems with it and it was very time consuming getting all three owners’ original signatures on the form – hence my enquiry).
Their response was that, apart from being a legislative requirement (in NSW), it stopped people lodging fictitious DA’s that may lead to problems for the owner.
As an example;
I could lodge a DA on someone else’s property saying that I wanted to modify the roofing line and paint the outside pink.
If that person was trying to sell their property at the time and the prospective purchasers were doing their due diligence, it might have an affect on the price they would offer if they thought they had to, for example, repaint the house in a more suitable colour.I could lodge such a DA just to be a trouble maker or I could have some other motive for making things difficult for the vendor.
Even if the DA was actually approved, you would not be able to undertake any of the “proposed” works but it could still cause some short term headaches for the real owner.
Another reason for councils requiring the owner’s signature is that they (the councils) don’t want to be caught in the middle of a tenant/landlord dispute.
This can happen when a tenant wants to do some work to their leased premises that the owner doesn’t want (a large sign that is not in keeping with the rest of the complex for example). The sign might be approved by the local council but is not allowed under the terms of the lease with the owner. There is then a dispute between landlord and tenant over the rights to erect the new sign (“But council has approved it”) and the council wants to stay right out of it all.
I know the above seems fairly obvious that the tenant doesn’t have any rights based on their lease with the landlord – but you would be surprised how unclear some leases are and how much of a grey area it becomes when some other form of approval has been obtained.
Disclaimer 1: For those people in states with less restrictive rules regarding owner’s authorities, please don’t try and use my example above for your own nefarious purposes. Apart from being highly unethical, when (not “if”) you get found out you will likely be up for some sort of damages claim.
Disclaimer 2: I have nothing against the colour pink in general, I just wouldn’t paint my house that way [biggrin]
Regards,
ClintHi there Brisbane04.
First of all, thanks for the update. It’s through people’s full experiences that others can learn too. So thank you for following this through even though I’m sure you have lots on your mind.
From what you have said it sounds like the solicitor is doing a pretty good job of keeping himself and the conveyancer out of any claims that may be brought about by yourself.
Consider this though;
– It is normally the conveyancer’s responsibilty to obtain the deposit on your behalf (I am assuming this was fairly clear in your contract with him).
– The fact is, whilst there are obviously a bunch of other factors involved, your conveyancer did not obtain the deposit.
– At no time during the period before settlement did your conveyancer or solicitor advise you that (a) he was having trouble securing the full deposit or (b) that he had not obtained the full deposit amount (is this correct?).Now, when considering whether anyone’s “negligence” contributed to yourself being in a situation that was worse than you should have expected, think about this;
– If the conveyancer or solicitor had have told you early on after exchange that there were some issues in obtaining the full deposit, and, after a number of follow-up calls with you subsequently advised that it was looking less and less likely that the deposit was going to be paid and that the sale might fall through…. would you have done anything differently as compared to doing nothing due to your enforced ignorance of the situation?The chances are that you may have acted a lot sooner to do something about your tenancy situation and maybe even proceeded to recsind the offer on the basis of no deposit and gone straight back into the market.
Please note that this is probably what I would have done (and certainly in hindsight!! [blush2]), but you may have acted differently. I don’t want to be seen to be putting words in your mouth.
At the end of the day, it appears that the solicitor is doing his best to get someone else to pay for the problem so that you are not left out of pocket – and he should be commended for following this through.
However, just keep in mind that if these avenues do not bring the results that you are after, from what has been posted to date your conveyancer and solicitor should not be left entirely off the hook.Finally, whilst it is ultimately up to the purchaser to pay the deposit (which they did not do), there seemed to be some insinuation in your last post that there was a bit of a matey-matey relationship between some of the parties in between the purchaser and you as vendor that didn’t help your cause.
On this point (a) be very careful what you say/write unless you have some particular evidence as it could come back to bite you and (b) if there was a failing on those other parties to fulfil their duties then they could be seen to be almost as culpable as your conveyancer in this matter.Thanks for reading and I hope this helps somewhat.
Regards,
ClintI’ve used a DIY kit for each of the 3 properties I have purchased (QLD and NSW).
I bought my first when I had plenty of time on my hands between finishing uni and starting my first full time job.
I’m glad that this was my first because, whilst it is not difficult for anyone with half a brain, it can take a good deal of time running around to the various departments and making sure everything is stamped properly etc and that things have been done in the correct order.For the other 2 I knew what was going on so, even though I was working full time, I could get the jobs done either on the internet or during lunch breaks etc.
As David said, lawyers etc don’t always know everything. I had to point out a couple of things that had been missed by the vendor’s solicitor of the 2nd property I purchased.
If I was buying another property right now, I would probably do it myself again (there’s a certain amount of satisfaction), but I would consider how much time I have available and whether I could be doing something more productive.
Regards,
ClintGood on you collie for taking the time to review the deal properly.
The other point I was going to add was;
Check other 4 bedroom houses in the area. Whilst $100 per room might not sound like much, if there are other 4 bedroom houses renting for less than $400/wk, you are not going to get many tenants other than those who can’t do math [biggrin]Regards,
ClintThat’s really interesting Bibra.
I just had a bit of a play around on Excel to see how things work etc.
For anyone who is interested, I came up with the following (applies to only two possible outcomes like in Bibra’s example);
– Subtract 1 from each of the odds (eg 1.5 becomes 0.5 and 3.3 becomes 2.3).
– Multiply the two new numbers together.
– If the total is greater than 1, then you are onto a winner. If it equals 1 then you break even, if it is less than 1, you lose (unless of course you bet all your money on the winner – but then that is not arbitrage).Off to look through the form guide
Regards,
ClintHi aussierogue – no, I’m not an agent.
You may have got the wrong idea from my post. I’m not advocating vendor or dummy bids, just acknowledging that they exist and that whether it’s the vendor you are bidding against or someone else, the principals are similar, ie have a top price, and bluff as well as you can [biggrin]
I work in the building industry and deal a lot with negotiations between various parties to contracts etc. so I see many tricks come out of the woodwork.
Buying a property in anything other than a completely open manner (which is very rare) can require a bit of a poker face at times
BTW, before anyone re-opens that recently locked thread, I am not trying to screw anyone or advocating same [wink4]
I certainly wouldn’t keep bidding if I knew the vendor was the only bidder left. At that point you meet and see if you can agree a price as you would in a private sale.
My thoughts only. I’m sure others have many (even better!) ideas.
Regards,
ClintIn aussierogue’s example the guy (the market in this case) was obviously prepared to pay $515k. He was simply more prepared to pay a higher figure than anyone else (rightly or wrongly).
At the end of the day, if the vendor ups the anti, you can simply say “no more”. It’s just like competing against another bidder. Once you reach your limit, there’s no more bidding to be done.
What the vendors are doing in these examples is seeing whether your current bid is your maximum or not – it’s a bit of a bluffing game bewteen you saying “I’ve got no more to give” and the Vendor saying “I won’t let it go at this price”.
Regards,
ClintI think FireCaesar is getting P and I crossed over a bit.
Let’s try this one for a different way of looking at the issue;
When you pay interest (eg at 10%), what you are really saying is “10% per annum”, or in other words, 10% of the total amount is paid back every single year.
Therefore, on $200,000 you would pay 10% of this ($20,000) every year on an interest only loan.Theoretically, you could keep paying this amount idefinitely. For example, if you had the loan for 100 years then you would pay $20,000 per year for every one of those 100 years.
Think of it as a “rental” amount on being able to use someone else’s (the bank’s) $200,000.
If you compare the $200,000 to something more “solid” like a boat. You can go to a charter company and hire a boat for $200 per day. At the end of the day you have paid $200, used the boat but ultimately don’t own anything. You could hire the boat for 100 days, pay $200 each day and still not own it at the end, because you are just renting it.
What the P&I does is it makes you pay back the interest component as well as a portion of the Principal as well, thus you get to “own” the $200,000 at the end of the loan term.
What it means is that for an IO loan you would pay back $20,000 per year and have nothing left to show for it and the end of 25 years, but with a P&I you would pay back the $20,000 + some principal each year and would own the full principal ($200,000) at the end of the 25 year loan period.
Which one you go for depends a whole lot on your individual circumstances.
Anyway, let us know how you go with these concepts.
regards,
ClintDo a search on the word “derivex”.
There is a thread here that discusses the PO loans and one of the early messages in the thread links to the SS forum which has a bit more detail.I won’t bother with the description of how they make money because;
a) It is covered on the threads I mentioned above
and more importantly
b) I still don’t really understand it [blush2]Regards,
ClintAs long as the other party agrees to it, you can put whatever clause you like into the Lease.
My suggestion (for what it is worth) is to have a “30 day notification period” so that you only have to give 1 month’s notice of your intention to leave without penalties.
Of course, your Landlord may not agree to this – but you can ask.
You could mention to them (PM or Landlord) that if they kick you out now, they will have to find a new tenant straight away. At least if you stay a few more months then that’s a few more months they have of rent coming in.
Clint
Yesterday I was speaking to a landscape architect about a job I am working on.
We were discussing the various types of palm trees and what they would be worth (the ones in questions are about 7m high).
He said that cocos palms were worth virtually nothing and that they are technically considered to be a “weed” these days [blink]
Clint
Hi there,
earlier in this thread someone briefly mentioned DA’s for running a business from a residential property.There can be some issues if your tenant simply moves in and starts operating a business. Some of these are real issues (parking, noise etc) and others are “techincal” issues (where the local council says “It’s not in the rules, therefore lodge a DA to have it approved”).
My concern for you is that if Council doesn’t like what your tenant is doing, you could be implicated by the fact that your lease now has a clause in it which acknowledges your awareness of the type of tenant and the fact they will be running a business.
My suggestion to you would be that you include another clause stating that all legal matters including obtaining the necessary approvals to allow the tenant to operate a business are the tenant’s repsonsibility. That way;
a) You are not implicated in any “illegal” use, and
b) The tenant can’t come back later and try to break the lease on the basis that they couldn’t run a business from the premises like they told you about (and put in the lease).Regards,
ClintHere’s a great tip that I have employed quite effectively in the past.
I try not to be rude when someone interrupts my down time at home – they are just trying to earn a living and I did answer the phone after all.
But…. if they continue to try to pester me after I say I am not interested then, rather than hang up, I ask them if they could just hold on a second.
I then put the phone down on the desk and go about my business – making dinner, watching TV, reading a book, whatever.
I don’t usually get a call back from that company again. [biggrin]
Clint
Most (not all) physiotherapists are a member of the Australian Physiotherapy Association (APA).
Go to http://www.physiotherapy.asn.au and click on “Find a Physio” at the top right of the screen.
Try each state and see if his name is listed – you can then follow up through the workplace he is listed under.
This will only work if his details have been updated, but if he is a member of the APA then you have a good chance of finding him.
BTW, my wife’s a physio (Shameless plug http://www.physiowise.com.au), that’s how I know these sorts of things [biggrin]
Clint
Acoustic movable walls can be very (very)expensive – if they’re done properly.
Standard stackables, bifolds etc are not much more than a normal wall, but you get no acoustic separation.
Regards,
ClintIt will be good to keep a close eye on this as there are a number of different possible opportunites.
Allthough, I heard Frank Sartor on the radio this morning greatly downplaying the proposal that was written about in the papers. He seems to be very politically aware of the possibility of a huge fuss from the residents of The Block which may utlimately temper the extent of any development, if it gets up at all.
Clint
Rather than get caught up in the mathematics of it all, another option instead of using the “11 second rule” is to do the following;
1) Work out all the costs of owning the property and convert to a weekly basis.
2) Work out all the income from the property and convert to a weekly basis.
If (2) is more than (1) then it is positive cashflow (+cf). If it is the other way around then it is negative cashflow.
Item (2) is usually pretty easy, it is simply the rental that you have already provided in your posts. All you have to do is make sure you are comfortable that they are accurate figures (an actual lease in place for that amount, or follow the suggestions of some of the other responses to this thread).
(1) is a little more detailed. You need to factor in the cost of loan repayments, property insurance, leasing agent fees, council rates and perhaps something for repairs and maintenance depending on the age of the property. Also, as I prompted in my first post here (and Drewbie also mentioned), are there any other special or unusual costs; strata fees, regional taxes etc?
Once you have all of the above, convert them into a weekly rate (eg, $520 worth of annual insurance equates to $10 per week) and then compare the figure to your rental income.
What the “11 second rule” does is give you a very quick approximation of the costs. It takes the purchase price and says “Typically, if you divide this number by 1000 and then multiply by 2, this gives you an idea of what your costs will be each week”.
Obviously, if this estimated number is BELOW the rent you receive, you have +cf.It’s simply a good test to see if your property is in the ballpark. If it is, then you go and work out the “real” numbers as I have illustrated above.
Regards,
Clint
