Forum Replies Created
Hi Mike. Thanks again for the requested report (sorry for the delayed reply!)
Much appreciated.
CrownOfGold.Hi Mike
Thanks heaps for the report, it was extremely useful for us. Thanks also for the very prompt response – we needed it today and we got it today!
Much appreciated.
CrownofgoldHi Kenny
Thanks for your well considered and excellent response. It was exactly the kind of advice we wanted to hear.Thanks bjsaust for passing on your experiences.
Unfortunately we were contacted by the agent today who said that she was still chasing up the Section 32. I told her that we were going to proceed in giving her a written offer today to pass on to the owners without the Section 32. She said that she couldn’t accept it because it wasn’t on the contract and it was company policy. We might walk away after submitting the offer and there would be nothing legally binding us.
Is she correct? Can she not accept our offer just because it’s not on the contract?
Crownofgold
Thanks everyone for your input! It was good advice we decided to take.
The whole job is done now. We ended up doing as much work as we thought we could – removing old fittings, drilling holes for lights…then called in an electrician to wire the new lights up. We also ended up installing a new switchboard and fitting RCDs (Residual Current Devices). The total cost for one day’s work was $2000 (including new switchboard and all wiring). I thought that was a bit exe, but they had the best quote. That’s Darwin for you.
In the end, the electrician said that we could have wired the lights up ourselves and he would have been happy to simply inspect and issue a certificate. Funny how when we asked each of them that question prior to doing the work they all refused….[eh] We’ll have to keep that in mind next time….
Thanks again for all your help.
Thanks for all your input. It has given me a direction and some confidence in carring it out.
We’ll be getting a plumber in to inspect this week to estimate the cost to fix. If it’s minor, I’ll get my conveyancer to send a letter requesting the vendor for a reduced sale price. If it’s major and they don’t accept a new offer, we will probably just walk away…we don’t want a property that could potentially have lots of other problems to fix in the future. [blink]
Hi. I’ve just turned 25. My background is this:
– I spent 4 years in Uni studying Engineering, straight after school. I started Uni at 16. A bit young I guess…so I had 4 years to mature[cap]
– I then got a full time job at 20 earning about 45k. While working, I also studied IT part-time, tutored high school students, lectured one unit at Uni and saved like mad. I bought a second hand corolla for 10k with my savings within a month and my first IP within 3 months. I stopped tutoring & lecturing because I was heading for a mental breakdown![blink]
– My first IP was a CF +ve fluke because I was clueless about investing. My parents went guarantor for me (bless their souls) or else I couldn’t have done it. It was a one bedroom unit in downtown Darwin. Fantastic returns, zero vacancy, great depreciation.
– I bought another new 2 b/r unit in Darwin a year later. Again, my parents were guarantor and my savings as a deposit. Very good returns, good depreciation.
– I bought a 3 b/r townhouse 2 years later on the outskirts of Brisbane, 5 mins from the sea. CF -ve. Probably not the best move in hindsight, but it’s possibly neutral now and should experience nice gains. With this purchase, I put down a huge deposit and removed my parents as guarantors for all my properties.
– I sold the first unit this year because they are building a monstrous 33 story apartment right next door, replacing my harbour views with a concrete wall. I made a reasonable profit from the sale which I’m now sitting on.
– I’ve enjoyed dabbling in shares along the way, just for fun. I treat it more as a learning experience more than anything, but I’ve probably made better returns from it than property.
– I’ve also thrown in a healthy dose of ‘life’. Although I am a bit scroogey, I really enjoy travelling and have done long trips to Canada, USA, Asia and all around Australia. Mostly to attend church camps and do the work of God.
– Now, I’m about to get married and am focusing on moving out of home and paying down the ppor by consolidating assets. It will give me time to bake cakes, dress our home, think about babies and on the more important things in life…. We will probably invest again when the market’s down and we’re in a good position to reap the deals.That would be fantastic if it were possible! We would purchase the new home in the name of a hybrid/discretionary trust, rent it from the trust, claim deductions against the higher income earner and give the rental earnings to the lower income earner.
Is this possible??
Hi Terry
Thanks for your response. I thought it would be a good idea to move as much funds into my offset account when the time comes into moving into the unit.
Why would I have to pay CGT by moving the money from the offset account into paying off the new home loan?
Hi, maybe my experience can help. I’ve recognised that two of the best things I’ve done in my life have been to:
1) Complete my uni studies full-time straight after high school
2) Live at home for as long as possibleI got my first degree out of the way at the age of 20, which is still quite young. It was relatively easy for me to do becuase I was fresh from school.
Living at home has been my strength and stay. It made it easier for my studying, saving, coping and just plain growing up. I didn’t have to struggle like those who had to work part-time and study.
I was able to save heaps when I started my first job because:
– I was living at home and able to save most of my earnings
– I was in the highest tzx bracket immediately because of my degree and didn’t have to work my way up the ladder.I bought my first IP after 3 months of working. Now I have 3 IPs within 3 years. It really doesn’t take long when you have the right beginnings and a little patience.
Hope that helps.
I would sell the property, use the cash to purchase the new home, then borrow against the equity of the new home to buy investment properties. This means you won’t have to pay capital gains tax on the proceeds of the sale (assuming it is currently your PPOR) and the interest from the IP’s will be tax deductible.
I hope that makes sense.
Hi vtxdevo,
Like others have been saying, it certainly can be done. I’m 24 and still living at home (my reasons are more traditional than financial as I don’t belive in moving out till I’m married). But this has the added bonus of helping me heaps financially.When I first started working, within 2 months I was able to save for a $10,000 car and pay for it in cash. Within another two months I had purchased my first IP. Thankfully, my parents agreed to go guarantor for me. I couldn’t have done it without them.
I now have 3 IPs and a good share portfolio within 4 years of working. It can be done. (Not drinking, smoking and spending too much also helps).
It depends where your priorities lie.
If I’m boasting, my father used this to cut me down fast:
“In the kingdom of the blind, the one-eyed man is king…”To describe a share trend that is going down, then goes up a little, only to go down again is a called “dead cat bounce”.
What a great thread! For a newbie like me, it’s inspirational to hear from people with so much experience.
Sooo, here’s my humble contribution:
At what age did you start investing in property?
21 (I’m now 24). I started my first job 3 months prior and saved 10k for a deposit for a $155k inner city, brand new, 1b/r unit. Happened to be CF +ve, just by fluke rather than intention. Also ended up with fantastic depreciation.What difficulties did you have in doing this?
None. Financing was easy thanks to my parents who went guarantor for me. Couldn’t have done it without them. Living at home has been the biggest blessing, it’s allowed me to continue saving for deposits.Was your first property an IP or PPOR?
This unit was my PPOR for a few months because I got the FHOG. Then I moved back home and made it an IP. I guess that if I had been married soon after, it would have continued being my PPOR. But I didn’t…How long did it take you to back up your first purchase with another?
I bought another brand new, inner city unit one year later for $220k. Rented at $300p/w, CF -ve. At the time, I was of the thinking that -ve gearing was the way to go to offset my increasing income…silly, silly me…How long did it take to acquire 10, 20, 30 or more properties?
I bought a 3 b/r townhouse a year after that (last year) in Brisbane for $239k. Again CF -ve. At the time I thought “I’m into this for CG. I don’t care about the yield. Besides, I want to negatively gear it….” Ahhhh, hindsight is so sweet…What are your plans for the future, ie. how many properties will get you to where you want to be financially?
Joining this forum of late and reading about CF +ve properties has really opened my eyes. I wouldn’t be able to sustain many more CF-ve properties the way I’m going. I’m intending on reading and learning more.I just sold my first IP (yes, the CF +ve one) for reasons other than financial. With the $100k cash in hand, I’m thinking about purchasing one, maybe two CF +ve IPs. Possibly NZ or WA? I’d like to continue buying at least one IP a year from then on. If I get married, move out of home, resign and become a baby machine, hopefully my husband would support me in coninuing to buy more IPs. At the moment, my future is a bit hazy.
Hope that’s worth something to someone.[nice]
Yeah, as far as I know, QS Services do depreciation schedules for Alice Springs as well as Darwin.
Hi
I’m from Darwin and bought 2 IP’s in the past (brand new units). I used QS Services, who were great with my depreciation schedule. Ph: 08 89410116.Thanks for your replies. I’ve never tried working out cashflow separate from capital gains…it makes a lot of sense.
In terms of my cash flow, I managed the property myself (just for fun), so I didn’t have any management fees. The property was also bought brand new, so I had negligible expenses and excellent depreciaiton. In adding all that up, the cash flow works out to be about $8,000 positive.
Overall, excluding income tax, depreciation and inflation, the gain/yr is then 9.4%. I’m pretty happy with that, considering I’m selling out of necessity rather than desire.
Thanks for your reply Steve.
Well, I haven’t declared another PPOR elsewhere since I’ve been living with my parents, so point 2 doesn’t apply to me.
I guess I’ve been a bit confused because I heard that I had to have stayed in the unit for a minimum of 6 months to be exempt from CGT.
