Forum Replies Created
Hi Monopoly,
The best deal is the one that is the best price relative to the local market and with the capacity to add value and/or meet an appropriate rental return that suits your beliefs.
Given you haven’t mentioned rent I assume rental returns are not an issue for you. If it was then rates of return and/or capacity to add to market rents is a consideration.
On the limited information given I would lean towards B on the understanding there is greater capacity to do a little R & R thereby creating some potential equity growth.
On the otherhand property A seems to have limited capacity for growth as it soounds as if it is being presented at its maximum value.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Shane,
There is no clear cut decision as each person/couple have their own reasons for doing whatever it is they are doing.
For example we, after a great many years, living in work related rental properties decided to build our home and set ourselves up with our own little piece of Australia.
Making aggressive additional loan repayments and with the recent growth experienced we have then leveraged off our equity into a stream of investment properties that suit our investment goals. There is no reason why you couldn’t do the same thing either.
Alternatively you could set your existing home up as an investment property (it conceivably could remain as your PPOR for the next six years and remain CGT free) and then rent elsewhere.
Using this approach you can have the best of both worlds – just check the economics of it all as there is little point in making tax savings in making your existing house into a rental property and then paying through the nose for a top of the range rental property.
Mind you if I suggested to the wife thet we rent out our home and renting elsewhere my world would turn a very dark shade of black – it really depends on a whoel range of factors, some of which are purely personal and can only be answered by you and your wife.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kp,
You are entitled to ameand your previous four tax returns and as such it should be financially advantageous to go back to your accountant armed with this new information and see what he/she thinks.
If they say no – find another accountant.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mike,
Thanks for that my computer wasn’t talking very nicely to the ATO last night – I have askde Jaffa to add this link to his sticky links list in help needed forum.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jaffa,
Recommend this one in legal and accounting – it is an issue few and far between accountants are aware of and as such anyone out there buying land and building property will benefit enormously.
https://www.propertyinvesting.com/forum/topic/11153.html
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi David,
If the purpose of the property was always to be an investment property then you can claim under the ‘purpose of the loan rule’ – it is possible to claim the interest on a block of land loan that was purchased to build an investment property – your situation isn’t a lot different.
Recommend (politely) your accountant do a search of the ATO and ask about the ‘Steele’ case – I am sure the same ruling will apply to your situation.
Also have a read of this link. It may be of interest. ‘Dale’ is a highly credentialled property investment accountant.
http://www.somersoft.com/forums/showthread.php?t=15843
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
The case in case in question is referred to as the ‘Steele CAse’ and there are a number of entries in the ATO website giving specific details about the hows and how nots of interest on vacant land being deductible.
As often is the case in these instances Dale Gatherum-Goss (Melbourne based IP savvy accountant) can provide the shortened version over at Somersoft.
Here is the relevant link.
http://www.somersoft.com/forums/showthread.php?t=15843Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jeff,
If you intend selling off the plan then you will need to consider that, as a generalised statement you will start to appeal more to an investor who is more focussed on rent returns and projected growth. Of lesser importance are things like layout, colours etc.
Whereas a would be home owner will generally speaking want to see the house in a more completed stage.
For me – if I were going to sell the block with or without house then you are probabaly better to sell without. Less headaches for this little black duck.
To a certain extenmt the ‘right decision’ will also be dependent upon your plans.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by FW:Well, I put a request through the “Need Finance” link a week ago, and so much for the 48 hour response promised – I haven’t heard a thing.
Not a good start.Keep smiling
Felicity
Hi Felicity,
You’re probably still in the too hard basket[biggrin]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Wayupnorth,
As G7 indicated you are ideally placed to begin your investment journey but beofre you start you do need to work out which vehicle (property, shares etc) suits you and your risk tolerance, knowledge etc. If it happens to be property then you need to work out whether or not you are a growth or income focussed (or combination thereof) investor.
I would then suggest you spend time doing some learning, read a few books from various authors (there is a list of books and reviews in ‘heads up’) ask as many questions as you feel you need to ask as you move along the knoweldge gaining path. Then you need to start your investment journey – set a date to do this so that you do not end up procrastinating ad infinitum.
A key question you will need to resolve very early in your journey is what are you doing when you leave the north in 2.5 years time?
Obviously you are movig somewhere an dif this is likely to be a permanent move then you may want to buy a property in your preferred area now and then use taxation benefits & tenant to assist with the paymentof the loan up until you move in.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
Just following up on Mel’s comments it is possible for interest on a block of land to be deductible provided you can demonstrate (and you did) intent to build an investment property on the land.
There are some restrictions about timelines and the like but it can be done.
I will endeavour to locate the relevant ruling in my quieter moments.
Interest only also frees up additional funds as your regular payments are less than P & I. For me all my IPs are I/O while I focus our energies on paying down our PPOR loan – when we get to this position then we will assess whether we convert some IP loans to P & I, or not.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Flash,
Suggest you do a search on ‘mint group’ there are a few threads around the place that may be of interest.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Apples,
As MA indicated this is an agent issue and as there was nothing in writing between you or the vendor or agent you have no recourse.
I would however suggest you put the experience ‘down to experience’ and move on – bear in mind the property was eventually sold for less than you were going to offer so there may be something to be gained.
Don’t forget there will be another ‘deal’ around the corner – it’s just that you may have to look a little more.
Keep your end goal in mind and you’ll realise that one property doesn’t make the end of a journey nor the success (or not) of that journey.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi torparn
As Mydral has said the body corporate is responsible for insuring commmon property and should include ‘building insurance’ in their coverage. They should also include satisfactory public liability insurance (especially as the complex is holiday rental).
You need to have landlords insurance to cover your belongings in the unit and also lost rental – also ensure you are covered for public liability for ‘incidents and accidents’ inside your unit.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Property9:What other areas in Perth are good and yielding a good return.
Hi Property9,
See this thread –
https://www.propertyinvesting.com/forum/topic/9746
there are a number of different comments made that you may be able to distill into something of use.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Myydral:what do you do if your IP (former PPOR, built pre-1985) is negatively geared ( very slightly ), and selling it would give 20K in the hand to buy either a new PPOR or possibly two IP’s?
I am not sure of CGT comes into play in your thoughts Mydral but a point of clarification just in case – if the property was built before 1985 but you didn’t own it until after 1985 – you would still pay CGT on the proceeds.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Rob,
If there is a single title I would agree with you – as I understand it many (most?) duplexes are sold with separate titles and as such there are generally speaking two titles involved – hence the tenor of my comments.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Geez Dan,
Give it a rest – with all those sites to visit and read how do you find time to search for investments.[biggrin]
I’d suggest that anyone here who is onctemplating spreading their investments into the US has just received one of the greatest ‘kickstarts’ available.
Thank you.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Calvin,
I am no expert on FHOG (that stage in life passed me a long time ago) but I would contend that the FHOG could only apply to the duplex half you are going to live in rather than the whole property (I stand corrected)
As such buying a duplex (in total) would require you to live in one half (and get FHOG) for this side and then have a full loan for the other side.
Given that one half of your property is an IP you would be best advised to have two loans anyway – the investment half interest only and the PPOR P & I. This will make accounting easier too.
Furthermore your PPOR Loan would be smaller because of the FHOG applying on that half of teh duplex.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Wayne,
Almost – you missed by a year. Here is teh correct link – it’s largely just the dates that are different.
http://www.ato.gov.au/content/downloads/n2036-03-2004.pdf
Not sure about a depreciation schedule as such – all I can recommend is a search on the ATO webiste – I do think (from memory) that the Rental Guide has a list of depreciable items and the length of their effective life.
As for the book – nah – writing is not a strength of mine – rather talk about it to people.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
