Forum Replies Created
Hi Redwing,
Absolutely – but keep some claims up my sleeve for the end of the financial year so that I don’t upset the ATO.
Staying very busy at the moment – which the wife thinks is a good thing. Just got back from a SMSF workshop that may interest you – check out http://www.onlinesuper.com.au – there is an office in Perth.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Leigh,
If you have bought an IP after 13th May 1997 the ATO will deduct any eligible depreciation claims/costs from the cost price of the property when calculating CGT irrespective of whether or not you claim them.
Might as well get today’s dollars today rather than waiting to get them tomorrow when they are worth less.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Karyn,
You are better off talkign to a broker who has a good understanding of the needs of a property investor. A bank manager is restricted by his/her lender’s lending policies rather than having the flexibility afforded by having access to a number of different lending institutions.
To give you a rough idea of where you stand – your available equity is determined by 80% of the value of your house – any existing mortgage. Eg $200 (house value) X 80% = $160K – $40K existing mortgage = $120K available equity.
When buying your IP a lender will typically require you to supply 20% of the value of the property + a further 5% for purchasing costs. If you were buying a $200K IP you would require $40K deposit and a further $10K for purchasing costs.
In both cases you can go over the 80% mark if you are prepared to pay lenders or loan mortgage insurance. In which case you could possibly go above 90% depending upon where you live or the IP is located.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Elika,
If you are wanting the quick gains of the last couple of years then don’t invest now – if however you are a long term investor, don’t overgear, research your market and have the capacity to ride a couple of small interest rate rises then a quality investment purchase should be considered.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kay,
Its like most ‘legal crackdowns’ from any law enforcement agency – the only ones who somethign to fear are those who are operating outside the law. Unfortunately in some cases the ‘law is an ass’ – in this case methinks not – if someone is doing as you explain then they are clearly not playing by the at least one set of rules.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Wayne,
Government Policy has a lot to do with it – they are concerned with the exploding infrastructure costs associated with urban sprawl and as such have adopted such strategies as smaller blocks, new building legislations allowing houses to built closer to the boundary line, narrow streets, and so on.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Cafall,
The best source of information is at the following website.
http://www.firb.gov.au/content/real_estate.asp
As Castledreamer said you will also need to look at the ATO website for tax related matters.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kay,
My advice to you now is to step back and analyse what people have said as it relates to you, your situation, your aspirations, your risk factors, your financial position, your time frame etc
For every sound, well structured case for investment strategy ‘A’ there will be an equally sound, well structured case for investment strategy ‘B’ and so on. Ultimately you need to know what is right for you with respect to the aforementioned matters.
A ‘time out’ from more information is important as you sound as if you need some time to digest what you have read, seen, heard and believe. A discussion with a property savvy accountant and broker will be invaluable to you at this stage of proceedings.
Once you have sorted yourself out then you may gain something from finding other investors with whom you can network. Likeminded people can be invaluable to you as you move along your journey.
Hope this helps.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Peter Spann:I’m not a cash flow investor (and that comment is likely to get me thrown out of this forum immediately!), and I explain why in my book, so that doesn’t bother me either.
[/quote]Now, where is that ‘block Peter’ button[exhappy]?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Penne,
There are a few (couple?) of situations when an investor is allowed two PPOR for a period of six months.
For details I suggest a search of the ATO website using ‘CGT’ – if you ave any difficulty locating it email or PM your email address and I’ll forward through the PDF.
My thoughts about selling assets are – if they are moving in the right direction and still meetin your goals then hang onto them for as long as possible – this way it reduces any buying/selling cost as a proportion of the profit/asset.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Marisa,
My guess and in a single word ‘technology’ – when your return is processed by the ATO and numbers entered into the computer a series of red flags will come up when the numbers are ‘unreasonable’ – these will be followed up on and if necessary an audit conducted.
Technology will also cross reference financial institutions (who use your TFN) to ensure there is consistency between what you say and they say.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by ActToday:His last rental was managed by Raine & Horne Burswood who have given both him and the property owner appalling service.
Hi ActToday,
Tis interesting your sons experience with R & H (Burswood) was very different to mine. Makes you wonder how can that be? Property investiong would be so much easier if we all had the same recommendations for ‘services’.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Desk Top:no garantee that the it will go UP!!!
Hi desktop,
As I understand it there is no guarantee the rent won’t go down either.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by MarkyMark:If I have a personal Credit Card and I am using that to pay expenses for investment property owned by the trust. Then is this mixing it up too much for accounting and is there a tax hit? Particularly if I put income into an offset account?
Hi Mark,
Not an accountant.
If you have mainatined a good paper trail there shouldn’t be a problem with mixing personal and investment expenses as the purpose of the expenses determines deductibility.
If there is interest incurred on the credit card due to a late payment you will then get into ‘messy maths’ working how much of the interest is deductible and how much isn’t. For the dollars involved I wouldn’t worry about even trying to work this out.
The downside of having an ‘investment’ credit card is that it will impact on your borrowing capacity – something to consider depending upon your situation.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Desktop,
If it is a good enough investment it should be able to stand on its own two feet – without a guarantee.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Ko_Starr,
In your quest for a tenanted property – be aware you do not inherit someone else’s problem and their reason for selling.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Geeez Westan – why didn’t you press the pause button? Its simply not good enough.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Penne,
Not an accountant but for what it is worth.
A broad brushed statement but – a PPOR is CGT exempt (bearing in mind the various restrictions and conditions) and as such your biggest grower should where possible, be your PPOR for as long as possible – even to the extent that you do not move into your unit but rent elsewhere and use your two properties as IPs. Your current home will retain CGT free status for 6 years if you only have one PPOR.
Certainly go and see a savvy accountant and take the before and after values with you.
Be aware that holiday lettings do have specific issues and can be less productive than first envisaged.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mark,
Very similar process to that used by a few others.
An account offset against home loan into which we deposit all income. Electronic transfers to the various loan accounts and institutions at the appropriate time and other bills (rates, taxes, insurance, body corporate etc) paid by credit card and paid out at the end of the month.
This way transaction fees are minimised, offset account has maximum funds in it for as long as possible, credit card posints are maximised and everything gets paid on time.
Accounts and receipts are filed in a single lever arch file (with sections for each property) when they come in and are banked/paid. A excel sheet maintains an overview record for my accountant at the end of the financial year. He only has to refer to the file if he needs additional detail.
I also maintain a lever arch file for all other documents for each property. Sectioned off into finance, rental, body corporate, purchasing and misc.
This process works for me – provided I am disciplined enough to attend to the paperwork in a timely manner.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jars,
I have used Raine & Horne in Burswood (9355 0822) and Laurie Kelly RE in Belmont (9277 8826) to manage our Victoria Park property and International students.
Both have done a serviceable job but………they are a little removed for the immediate Bentley area.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
