Forum Replies Created
Hi Tomleslie,
If your accountant is from the ‘you can only claim when it earns an income school’ refer him/her to the Steele case.
This resulted in a ruling that you can claim expenses from the time the project started if there wasn’t an ‘unreasonable’ delay between buying the block and starting the building.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Petebell,
Based on information you have provided you are exempt from paying vendor duty.
See middle column on second page of this
http://www.osr.nsw.gov.au/pls/portal/docs/page/downloads/other/vendor_duty_factsheet.pdfIt would appear that the NSW OSR are largely relying on ATO’s definition of PPOR.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
And – to top it all off;
http://www.smh.com.au/articles/2004/10/30/1099028265970.html
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Chris,
There are a number of factors to consider in the whole equation.
Of most significance is that your parents will not incur CGT on their primary residence – therefore there are no nasties in that transaction apart from agent’s fees.
Selling the IP will, however incur CGT, and the gain will be apportioned in accordance with title ownership. However based on the information provided it may not be as severe as you imagine.
Given the length of time your parents have owned the property they can calculate CGT using the method which is more advantageous to them. A good accountant will be able to walk them through the options.
I also recommend you download the 2003/04 CGT Guidelines from the ATO website as this will provide specific information as it relates to your parents. If you have difficulty finding it email me and I’ll send you a copy by return mail.
But ……….(there is always a but) before your parents do anything I recommend they make an appointment with a Cenrelink advisor (or recommended advisor) who can see if some jigging of the structure can provide your parents with a pension or part pension.
I would also recommend your parents shift the focus from the pension – it may be possible with some expert guidance that they could live better without the pension.
People like Steve Navra have the wherewithall to assist asset rich – cash (as in income) poor people such as your parents to continue to acquire high performing assets.
Check out http://www.navra.com.au
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi All,
Could also be as simple as a PAYG Variation – need more details to be of any use.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Mig:So basically the deal isnt so viable anymore…
Based on your comments and research I believe you have covered all bases and should be ‘congratulating yourselves’ rather than feeling blue. The processes you have employed to date have identified issues with this property and thus increase your chance of long term success.
That’s a good thing, isn’t it?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Michael,
Try this link – Julia is an accountant and makes a number of comments in this thread that may be of use to you.
https://www.propertyinvesting.com/forum/topic/11683.html
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mig,
Congratulations on taking the first step – there are many people who cannot, for various reasons, make that move.
With respect to the first property – you need to ask yourself are the ‘unsatisfactory’ matters simply cold feet or more significant issues such as white ants, major maintenance or finance or………
If they are simple a case of ‘cold feet’ then you need to revisit your original reasons for selecting this particular property and if the reasons still hold then ……….
If, on the other hand, there are costs involved you need to factor these into the whole picture and see if the increased costs still make the deal viable. Bearing in mind that if you have found two properties you can always find a third and a …..and so on.
As for IP2 – it happens get over it and move on. In all honesty if that is the worst thing that is going to happen in property investing (and it won’t be) then you are home and hosed.
You’ll find that as you progress along your journey that it is not always smooth sailing and if you are going to throw your hands in the air and cry foul everytime something goes wrong then you could be in for a lot of arm waving.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Land,
Not sure who told you you couldn’t borrow anymore money – a bank employee? If so, contact a good broker (take you pick from those that regularly post here) and see what they say as they collectively and individually can/do have access to a number of lender’s loan products.
Some lending policies are a little more relaxed than others and you’ll find that if you have spare equity you can generally obtain more funds.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mark,
Minimising land tax can be accomplished by purchasing the properties under different arrangements.
Eg some in individual names, some in joint names and/or in different trusts.
Particularly in the case of different trust structures the annual running costs of a trust (among other things) would have to be matched up against the tax and security benefits of buying in a trust.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mike,
Try the following document;
http://www.sro.vic.gov.au/sro/srowebsite.nsf/taxes%20rates.htm?OpenPage&charset=iso-8859-1#duties
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kp,
I must admit I am primary school orientated where the focus is on ‘the basics’ – but in answer to your question coverage of financial matters is very scant in the curriculum although it does make some token appearances from time to time.
The curriculum is pretty crowded in most schools today but there is a drift towards offloading some stuff that is superseded and include more relevant aspects of life learning in the curriculum.
Like most of the ‘life choice’ subjects such as health issues, values education (we do teach that Mr PM), interpersonal relationships and so on – there is a question of efficacy. For example schools have been teaching sex ed, drug ed and alcohol ed for a number of years and some would say with mixed success for many children. In areas such as these the messages from some homes are so more pervasive and do make the task of getting the message home more difficult.
Another example a little closer to home – my eldest daughter (16) has just left home to attend boarding school in Perth and hasn’t a financial bone in her body. She just isn’t ready to learn yet – we keep dropping hints but they haven’t been picked up yet. For her it is a case of ‘when the student is ready’ – I suspect for many teenagers this will be common.
Having said all of that there are moves in some states for a review of the curriculum with a view to incuding something along these lines in future years. For example Paul Clitheroe is currently heading (involved in?) a national committee looking at these sorts of issues and the Queensland State Government is implementing an anti-gambling component to the curriculum.
A concern I would have is that for many teacher there work contracts are a little removed from reality and the security of employment and certainty of income offered in many states means that some (many(?)) teachers do not have a good financial knowledge themselves and any teaching be lacking the passion to engage many of the kids.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Ronulas,
I certainly wouldn’t sell unless you have a much better use of the money (in investment terms)
It seems to me you have made a sizable capital gain and the ‘cost’ of this profit is a reduction in the cashflow. So what – the property is still paying for itself and if, as you suggest, it continues to grow everything is good – isn’t it?
It seems to me that the better option is to do a rent review. If your PM isn’t talking or hasn’t talked to you about this side of your investment then they (and you) need to control your investment, rather than letting things drift along as they seem to be at the moment.
You may well find that the rental market is undersupplied and a rent increase is due. Don’t forget your costs have just gone up – increased rates, interest rates rose 0.5% ~12 months ago and so on. You are now in a business and some active management is required.
For me option 1 and then 2.
Option 3 is not relevant – the tenant shouldn’t pay for increased borrowings because you are drawing upon your increased equity. Certainly not option 4 unless the first paragraph is the case and 5 – I’ll leave to some of the more creative investors.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
If I didn’t scare you off last time, then BE AFRAID, because yes (your worse nightmares have come true) I’m a school teacher!!So pretty please with a jellybean on top, concentrate on your exams and then GO FOR IT. Good luck with your PI RESEARCH, SAVINGA AND action. Spend some money to link with Rick Otten, maybe if you become a spotter he’ll give you a discount to come to his Boot Camp!!
Hi Chris,
Be even more afraid – I am a school principal.
But in all seriousness I am in full agreement with your parents and Greg here.
Focus your energy on finishing school first so that you achieve as well as you possibly can do – at the age of 17 your sentence is nearly complete and then you will have time to pursue your PI interests.
Completing school as well as you possibly can do will also provide you with the best ‘fall back’ position you can should you ever need to mark time or change tack at some stage in the future.
And finally there is no need to rush – a rushed and hasty decision now could be costly in the long term. Good investment properties come along more frequently than some people imagine and especially so if you are networking effectively and have a sound research base behind you.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Cana,
A SMSF cannot own the house that you are residing in and as such it will always be out of the reach of your SMSF. Nor can a SMSF purchase investment property from you that you currently own – which is what G7 was explaining.
By way of comparison a SMSF can own the commercial premises that you operate a business out of.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by AusProp:has anyone else not received their newsletter or is it just me? I am wondering if this may be why there aren’t many posts.
It is probably just a West Australian thing John – I am still waiting too.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Xquis,
I would be very concerned if you were buying a unit that small as an investment. Lenders have a great aversion to financing such small places and therefore you would be using more of your cash and/or equity as a deposit than is typically required.
Because of this you could well experience difficulties selling the property later on if ever that was an option/need. Such difficulties tend to restrict growth potential as savvy investors tend to steer clear of such property.
For me you are better off investing in something a little more standard and something that is bigger than 50 sqm.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Cana,
It depends on what you are trying to achieve via property investment.
There are people here who would spend their $300K on a couple/few cashflow positive properties. Generally speaking these people are pursuing a ‘cashflow’ investment vehicle based on rental income.
Equally there are people who would be happy to put in some cash in pursuit of a growth focussed investment portfolio. In some instances this may amoount to a single property selected in a growth locality.
So back to you – what is/are your investment beliefs? timelines? income level? adversity to risk? resources? exit strategy? and so on – the answers to these will determine what is best for you.
The property you choose has to suit you.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Greenjoy,
Not sure of your exact situation but you certainly can wait until later on in the year.
Be aware that QS do get busy towards the end of the financial year and you may get caught in the rush and incur small delays.
The second point is that the depreciation report can be used to complete a more ‘aggressive’ PAYG variation (if appropriate) and this could result in an increased cashflow which could then be harnessed to help pay your home loan down faster.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hehehehehe
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
