Forum Replies Created
Yeah they mean basically the same thing. I just wanted to use that Chris Rock quote.
Do people want to be rich or wealthy? Chris Rock talks about being 'wealthy' – as opposed to rich – as being able to pass down wealth to future generations.
His quote: "Shaq is rich. The white man who signs his cheques is wealthy!".
number 8 wrote:I see that Steve has accomplished great things, the philosophy is great, the thought processes are impecable, nice guy and the negotiating skills are great. But what I cannot see is that this can ever be repeated. There is no strategy for Mum and Dad Australia. I hear that you can do 5 in 6 years or sub-divide several blocks or vendor finance (that is all good and I do not wish to down-play this) ….but again 0-130 (although arbitrary numbers) are they really possible in 2011 or do we play lotto given our chances of ever accomplishing this ……
http://www.birchcorp.com.auI think the philosophy in Stev's book is sound, and the philosophy can still be utilised today. However lending criteria and the availability of cash flow positive rentals make it harder. I also wouldn't get too caught up on the book's title. The aim isn't to buy 130 properties, the aim is to buy cashflow positive properties and generate passive income.
The cover is just to get people to pick up the book in bookstores (or nowadays, online). The underlying philosophy is what is important, and it still can be done today, albeit not as easily done as 7 – 10 years ago.
Hi Free,
Rules vary in each state, but the landlord is well within their rights to increase the rent every 6 months here in South Australia, even if a longer term tenancy is in place. I think this is different in other states. Month to month tenancies are also treated differently in other states.
To answer your questions.
1) I would guess the clause wouldn't work. The landlord is offering the use ofthe property to you, under his/her terms. It's up to you if you accept them or not. If you don't, then generally you can either, a) find another property, or b) negotiate. Some LL's are more likely to negotiate than others.
2) Ask other tenants in the buiding, check what similar properties in the area are going for on real estate websites.
3) I would assume the landlord is well within their rights to increase the rent.
4) Maybe, it's hard to know hearing only one side of the story.
5) There is no harm in asking. I would if I was you.It sounds likethe problem may be the agent, more than the landlord (from waht you've said). When my wife and I were renting, we had a small issue that required the agent's attention and we could not get him on the phone. My wife, who is a determined type when she gets a bee in her bonnet, rang the agent CONSTANTLY until we got some action. Sometimes the squeeky wheel gets the grease, and if you are calling about genuine concerns (like a new lease or leaking roof) then the agent should bring this to the LL's attention.
The advantage for you with being on a month to month lease is that you are free to look for another property to rent. Maybe that is another option you could pursue.
If he takes it out now, at age 59, he MAY have to pay some tax on it (depending on the amounts and the tax structure of the superannuation fund).
If he waits until 60, any withdrawals would be tax free (assuming it is not a Commonwealth govt super, which are taxed differently again)
As Scott said, it is best to see a professional about his options.
Intrigue wrote:Do we have to do things the way they have always been done just because that's what the seller wants or what the agent is familiar with?The issue here is the seller holds all the cards. You can ask for all sorts of conditions, but if the seller says no, then that's the end of it.
It is in your favour that the property has been on the market fora long time, but it doesn't necessarily mean that the vendor is anxious or desperate to sell. I'm not sure how desperate they would have to be to allow a 30 day due diligence period, and effectively hand control to the purchaser. Pretty desperate, I would think…
A unit trust doesn't offer the protection that a discretionary trust with a corporate trustee does. If your parents went bankrupt, the units would be an asset that would be available to the bankruptcy trustee.
omegapartners wrote:Dan42 wrote:You can claim back the GST IF:1) You are registered for GST
2) You are running a property development business.This can be in your own name, it does not have to be under a company structure.
The downside of claiming the GST when you are building is that you would be required to PAY GST when you sell, reducing your profits.
If you are building for your own use, or to rent out the property, then you can not claim the GST on building.
Unless the developer has used the margin scheme and in which case you cannot claim back the GST.
I understood the question to be that the OP was paying a builder to build the property, not buying a brand new, completed property from a developer.
My point was if they are paying a builder to build, they can claim GST if they are intending to develop and sell etc.
But you are right, if they have bought a completed new residential home, and the develop has used the margin scheme, then there is no claim for GST allowed.
I wouldn't advise the use of a Hybrid Trust, as the ATO have released several rulings about the uncommercial use of Hybrid Trusts, and the deductibility of interest.
If you are going to be cashflow positive, I would use a Discretionary Trust. Another reason to use a DT over a Hybrid Trust is that it is easier to borrow funds in a Discretionary Trust.
Like Scott said, I'm not sure why you need so long to do your inspections. Here in SA we only get 2 days cooling off!
If I was the vendor, there is no way I would grant a 30 day due diligence period. The vendor would be essentially turning away other prospective buyers while you did your due diligence. If, at the end of your 30 days you decide not to proceed, the vendor is back to square one and has wasted a month.
Council checks and title searches have to be handed over before cooling off is entered into here in South Australia. I'm not sure of the procedures in other states. So if you don't like what yoiu see in the searches, you can always cool off under normal terms.
taogofers wrote:After setting up a Trust Company-what is the procedure from transfering real property to the trust?
do you need to officially transfer through lands titles office.
are you require to pay stamp duty on a realistic valie of the propertyTao
Yes and yes. The legal owner needs to change on the title, and you will pay stamp duty at market value on the transfer.
AussieHousePrices wrote:Hi All, If you’re not yet tired of reading about the Aussie Housing Bubble, check out my new blog: http://aussiehouseprices.blogspot.com/ Cheers. Andy.Great first post Andy, plugging your own website without adding anything to the conversation. (Please note the sarcasm).
Please forgive me if I won't be clicking on your link. The thought of reading about the 'impending property crash', from some anonymous blogger with no discernable credentials makes me so nervous that I won't be able to sleep at night. I'll just keep my head in the sand, if that's ok with you.
By the way, this 'impending crash' has been impending now for at least three years. Any chance you may be able to narrow down the date for me, so I can sell up and get some sleep?
mattnz wrote:Here is an article in which the chief economist at BNZ, fully owned by NAB advise that they recognised the NZ market was 30% overvalued in 2008 when the ratio of house price to wages were at a multiple of 6 in NZ.In Australia they are much higher now, Sydney has a multiple of 9 and Melbourne 8.
House price to average (or median) wage is a useless statistic that means nothing. It looks good in scary newspaper articles, but that's about all the good it does. If you are going to argue house prices are too high, then go right ahead, but don't waste our time or insult our intelligence with 'house price to wage' rubbish.
Thanks.
bb8 wrote:2. However by having a "business line of credit", which would pay my PSI trust expenses (deductible), the business LOC can pay the interest on the PPOR loan which then make this interest payment tax deductible.
It's not that simple. Interest deductibility is determined by the use of the funds. In the transaction of the trust LOC paying your PPOR interest, it MAY be deductible, depending on whether the trust owes you money or not.
We have set up loans for clients in the past, where the trust / company owes the individual money. This interest is deductible, as the company is borrowing to repay a shareholder / director loan.
But it depends on whether the trust owes you money or not. Most times in the smaller PSI type businesses run through trusts, the individual owes the trust, not the other way around. This is something your financial planner would not know, unless they have seen your financial accounts.
As others have said, be careful when taking tax advice from financial planners. And if your financial planner is charging for this tax advice, they could be breaking the law.
No. The 'increase' on the rental loan would be used to pay down your PPOR, and would not be deductible.
Interest deductibility is determined by the purpose of the loan. If the money is used to pay down another (non-deductible) loan, then the interest on this portion would not be deductible.
eilatan28 wrote:so is it just the portion i use that wont be tax deductible or the whole loan ???
i dont expect to claim the interest on the part i use for personal use, i just want to be able to access funds without having to have to sell my original PPOR .
is that were the split loan thing comes in handy ? so it keeps the loans separate so i (and my accountant) can easily see what is tax deductible and what is not ??sorry this is still all new to me. thanks
Sorry, I have misinterpreted what you are trying to do.
The original loan will be tax deductible still, as it retains it's original purpose. It's only the new borrowings that would not be deductible. I thought you wanted to have the new loan tax deductible.
The best way to do this would be to get a separate loan with the current PPOR as security. This way the current loan is untouched and unaffected, and the new loan is totally for private use.
You can access funds for the deposit on your new PPOR, it just won't be deductible.
Even if you were able to convince the ATO that you redrawing offset money, rather than borrowing to buy a new PPOR, I can't see how you would avoid the anti-avoidance rules. The only reason that you would borrow in this fashion is to avoid tax.
There have also been a couple of cases where the funds in the offset account were deemed to be new loans, so offset accounts don't always work when redrawing the money.
There may be some here who think you would be able to do it, but in my professional opinion, it wouldn't pass Part IVA (the anti-avoidance provisions) and if you got caught, you would face interest and penalties.
Hi Natalie,
No, the interest would not be deductible, as the purpose of the borrowing determines deductibility. The purpose in this case would be to buy a new PPOR.
You can claim back the GST IF:
1) You are registered for GST
2) You are running a property development business.This can be in your own name, it does not have to be under a company structure.
The downside of claiming the GST when you are building is that you would be required to PAY GST when you sell, reducing your profits.
If you are building for your own use, or to rent out the property, then you can not claim the GST on building.
The flip side Jac is that the sale of your current PPOR will be tax free. You can then use the cash from the sale to reduce your non-deductible debt.
The offset account is a beautiful thing, though.
