Forum Replies Created
Hi Snapper,
API has, from time to time, a map of city areas showing rental returns. Last release was December 2004.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Giddo,
Are you saying you aim to have $300K when you retire? Or that you can access $300K now to further your retirement plans.
Don’t forget that you can (if you wish) add any spare equity into your calculations when you calculate your leveraging capacity.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Zeeke,
Yes you can use the security provided by your existing property to buy another home – be aware that any redraw or equity loan would not be deductible under the circumstances you have outlined.
I would suggest that in the main you are better off remaining in your existing home (if that is possible) and buying another IP as this will maximise your interest deductions assuming a similarly valued property is purchased as an IP.
And yes it is possible to convert your current home to an IP – any deductions and declarations needing to be made would be the same as a standard IP.
The only consideration you would need to provide would be to establish a value of your existing home so that you can enjoy some some your free Capital Gains for the period that your existing property is your home.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi D,
Woodsman has it correct – the offset account is free to be used as you see fit, the only ‘downside’ is that any withdrawals will see the balance diminish and the next months interest bill increase.
Extending upon this – if you got ‘ahead’ of your IP repayments and then took some money from the loan account to buy something personal then you will run into a tax issue as the loan now includes investment and personal expenses.
A similar (and more complex) problem exists with LOCs.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Andy,
Not trying to rain on your parade but I question the long term wisdom of buying something for $500K with a limited deposit.
Having a debt of $450K+ in a single property puts you at some degree of risk should you find yourself without a tenant.
Just a different thought for you to consider.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Bang,
Investing for gains with such a short time frame is a little optimistic in my opinion.
Certainly the fundamentals in SEQ are there but not for the timeframe you are seeking.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Asia,
If the repairs are ‘repairs’ they will be deductible in the year in which the expense is incurred. If, however they are considered improvements the costs (levies) will be taken into consideration when determining CGT liabilities down the track.
This issue is similar to strata/bbody corporates that also include a ‘sinking fund’ within the levy. The sinking fund comes into consideration when calculating CGT whereas fees paid for annual operating expenses such as gardening, insurance etc are fully deductible in the year in which they incur.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
And,
http://www.victorialaw.org.au/Body_Corporate.htm
and
http://www.mckeanpark.com.au/newsite/faq/default.asp?ID=49
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Woodsman,
It seems google is not quite up to it but
There are soome links and pages on the website listed above.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Woodsman,
Found NSW
http://www.fairtrading.nsw.gov.au/pdfs/corporate/stratancpreport.pdfStill looking for Vic
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Woodsman,
Which state?
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Jemm,
Our body corporate (Brisbane) doesn’t allow dogs. It is part of the bylaws.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Sang,
Picking up from Woodsman.
I would suggest that you do some more reading and educate yourself in some of the many and wonderous ways that people can invest in property.
Duck into the ‘heads up’ forum on this board and see what book/reference recommendations people make. A coouple of these will help you further your investment knowledge and will start to help you clarify what it is you want to achieve and which ‘style’ of property investment suits your needs and situation.
While this is all happening you can start searching out professionals (brokers, accountants etc) that can assist you in your journey. These people need to understand what it is you are trying to achieve so that they can suport you along the way.
Consult with a broker who can determine your borrowing capacity and help you set your accounts up in a most effective manner so that your investment journey is more likely to succeed.
Once all of these ‘steps’ are concluded then you are in position to start seriouosly looking for a property that meets your investment goals.
Let this one bed down and then when the time is right for you look for number two and so on.
The position you find yourself in now means that you are well placed to use the equity available in your property. This can be used to set up equity loans/redraws etc to provide the funds for deposits on each property. A lender providing the balance of the funds on each occasion.
If you borrow more than 80% for each property you will be up for lenders mortgage insurance. While this sounds nasty it can stretch your equity further – this depends on your investment beliefs and goals.
As for negative gearing or positive gearing – that is ultimately up to you. I don’t mind a bit of negative gearing as I tend to focus on property in quality locations and closer to city and/or satellite city centres where long term growth is a know quantity.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Skolka,
As you are transferring an asset from one person to another within a single relationship it is important that the transaction is very legitimate as such transactions will raise an ATO flag and they may come to audit your books.
By the way this was an option that we (the wife and I were exploring some years ago).
I would also suggest you discuss the suggestion with a savvy accountant to see what the short and long term benefits and issues are.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Andrew,
As Steven said it does like you are allowing interest to capitalise (interest on interest) on/in your second LOC and as such there may be issues with the ATO.
So – in a nutshell it would pay to get a second opinion.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Melb,
As the property was built before 17th July 1985 then there will be no building depreciation left for you to claim apart from any renovations that are considered to be part of the building.
Aside from the building depreciation you also have available to you plant depreciation which has a start up and depreciable life value at time of purchase.
For an expert opinion drop depreciator (AKA Scott) a PM and he will be willing to be of assistance.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Melb,
Land Tax is a state levied tax and as such the best place for information is the OSR (or whatever it is called by the state in which the property is located).
There are various rules for the different states and as such they are in the best position to answer the query.
For example – simple adjustments of tenants in common arrangements in some states creates a new partnership whereas in others it is treated as being the same.
Without knowing where your properties are located the answers will only be supposition.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Collie,
Check your CGT calaculations. As Westan said the net gain is added to your other income and assessed in accordance with the various income tax scales.
I have issues with your projected sale price. Turning $160K into $240K in 6 months sounds attractive (and it is) but the better question is – is it achievable? Where did the sale price come from? What evidence supports it? and so on.
Making investment decisions on best case scenarios can be fraught with danger.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Hi Brad,
Before you go jumping at shadows – do the maths.
Calculate the effect of an interest rate rise – 0.25% on every $100K is only $250/annum or $4.80/week.
Of these increased costs there are increased deductions of $117.50 (assuming top tax rate) meaning that your net shortfall is only $2.54/week per $100K.
This can easily be covered by increasing rent by $5/week and/or considering the growth that this property will have in the long term.
On balance judgement (and without knowing where the property is) would I be selling ‘no’
Bear in mind that sucessful investors are long term players.
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
Originally posted by bnag1:Because they are also doing renovations they make money from the reno also. They are very up front and say if you can find a cheaper way to do the reno then go for it. The key to them doing the reno is a fast turn around of 4 – 6 weeks.
Hi Brett,
Further to Tony’s comments – it pays to remember there are Renos and then there are renos.
I would be concerned about the quality and legalities of any work done. I mean to say – I could knock out a wall or two, build a pergola, and so but …………..
Derek
derekjones1@bigpond.comProperty investment advice and researched property in quality locations available.
