Forum Replies Created
Was your friend self managing and were the bills in tenants or your friends name?
Water accounts for my properties are all in my name – I pay and then get reimbursement from tenants via property manager. If tenant vacates PM does a water reading and retains portion of bond money pending arrival of water authority bill.
I pay the bill to make sure there is no harm done to my credit rating. If it means I am out of pocket a little (never happened yet) then that is but a small price to pay for good credit.
Wow – reading that list of what is achieveable through PIT I am sure your phones will be ringing hot.
Use the search button to find out what others have written over the years about each of your five listed towns. The search button is at the top right corner of the page.
If you are seriously looking at mining towns make sure you are extra careful – a few mining projects are 'staggering at the moment'
How old are the kids?
Smaller kids can be moved around a bit but by about 10 or so they do need to start establishing friendship bases.
Hi Mrs Bee,
If you do hang onto your current place and turn it into an IP this means you will be borrowing 100%+ for your PPOR, add to this the possibility your new home loan debt will be significantly larger than your existing debt means that your cashflow will take a hit.
Given you now have a family of three kids you will need to consider carefully the impact of any decision you make has on your cash flow. Make sure you also consider interest rates at long term averages – currently rates are very low (against long term averages) and will not remain there forever.
You can convert your old loan to interest only and this will result in a lower payment than the one you are currently paying. Even so careful maths is required.
Hi Steve,
At the moment quoted posts appear immediately underneath the original comment whereas the old forum the last post was the last post irrespective of whether or not it quoted someone else.
New format now means I have to try and find the new post in amongst the whole thread rather than just going directly to the bottom of the thread.
For example Freckle was listed as the last post in this thread (prior to this one) and it seems the only way I can find out what he said was to look at the time stamps and scroll through the whole thread rather than simply going to the bottom of the thread.
Me likes the previous process with quoted posts appearing at the bottom.
Miam wrote:I think we will hold out and just see what happens.Don't wait – get control of your own destiny.
Write a letter to the agent advising them that your offer will be withdrawn on (insert your own date here).
Put the pressure back on the vendor.
Compare this property to other similar ones in the area. Look at asking price if you don;t want to buy a suburb report from RP Data etc. Bear in mind these are only asking prices so don't make the whole decision based on this information.
Consider normal current selling times in the local area – this will give you an indication of how much you may be able to negotiate.
Try and ascertain why the vendors are selling. The agent might not be the best source of this information so a bit of detective work may be required.
If you do pace an offer put a deadline for the vendors to accept (or reject) your offer.
Get a solicitor to help you with conditions such as finance clauses, inspections, and timelines.
Try and look at the property at different times of the day to see what sort of noise might be in the area which isn't always noticeable at other times of the week.
Check local government to see if there are major upgrades planned for the area. Pay particular attention to those that may negatively impact on your property value.
Try and keep emotions out of your deliberations.
Must be a bit of money in the scheme. We were offered an 8% marketing fee to sell some.
For a number of reasons we elected not to get involved.
JDKirkman wrote:my boyfriend thinks the idea of selling my car to buy a house is stupid but since I don't know what is in my best interest .Buying an asset is often in your best interests.
With all due respect to your boyfriend – sometimes those closest to you are not the best source of advice.
When doing all of your planning do not forget to factor in FHOG and Stamp Duty discounts. I know a number of people who have used available grants to buy their first home, make sure the fulfilled their obligations and then moved out to change the property into an investment property.
Having said that it has been a while since I looked at the Qld FHOG conditions and benefits.
You got a loan on the car?
If you do then it would be in your interest to get rid of the loan asap. Your transport needs (not wants) will determine whether or not you should attack the loan as quickly as possible or sell the car.
If you paid cash then this indicates you have good money management strategies to save a good sum of money at a relatively early age. Repeat the process to save yoursellf a deposit – and this time purchase an asset rather than a liability.
By the way congrats on wanting to get into property at your age – that places you ahead of many, many others in society.
Is Joe buying Lostos' property?
I don't see a major problem with selling the lot and setting yourself up with a new PPOR – should mean your debt level would be lower.
There are occasions when people upgrade their own home and therefore increase their share of non-deductible debt. This continues to act as a handbrake on forward investment momentum.
Key issue for me is if you sell the lot will your debt levels be lower/higher/similar?
And second to that – does your overall equity position decrease/increase/remain similar?
Your post mentions you have equity in your IP at the moment and that you would be reluctant to give this up – it is possible that, with careful selection and sound decision making, your equity remains intact and can still be used to continue your investing.
Having said all of that – buying and selling real estate does incur signifcant costs and this will need to be factored into any decision you make.
Online is better – ad is viewable for a longer period of time. Place an ad in the newspaper and it disappears when the paper hits the bin. Online is there for as long as you need – albeit the ad drops down the pages over time.
Notwithstanding which medium you choose to use – make sure you heed Kristin's comments. If you contract an agent to find your tenant then you, by extension, will have access to the tenant's database. This should minimise the likelihood of you getting a tenant with a bad 'track record'
Slightly off topic – make sure your landlord insurance/property insurance will still cover you if you are self-managing. Some don't.
Hi LT,
I use Shreeve and Carslake in Herdsman Business Park. They suit my needs and do have a tax planning & financial planing component to their business.
$400 might be a bit light on depending upon the ins and outs of your situation.
As an aside not sure about Melbourne as your next investment location. Stuff I read suggest the unit market in Melb is somewhat wallowing at the moment.
Normally there is no CGT payable on your own home. The ATO comment in your original post highlights that CGT will be payable if you rented out part of your home.
Based on the information you have originally provided this does not seem to apply in your situation as you have only discussed capital profits and there is no mention of rooms or part of your house being let.
N.B. There may be some CGT payable if your house is located on a block of land more than 5 acres in size.
Looks good – will now see if I can find a thread or two to respond to so I can test functionality.
Would like the screen to fit my PC screen a little better. Locking the left hand side to left hand side of monitor will give more room for content.
warek wrote:Current thinking is as follows, if we buy as joint tenants, better when one of us dies. Income from lease property – all expenses including construction cost write down and depreciation of plant etc woudl be a profit per year of 500-1500 dollars, shared between both at 50-50 split, we may make a profit of 250-750 a year, excluding loan interest.Still trying to get confirmation that if my wifes borrows the loan in her name only even though we are joint tenants then the interest costs per year will be about 28000, fully deductable against her income. So to my way of thinking she then has a tax loss of 27250-27750 a year and I will have a profit of 250-750 a year. Is this correct?
Not sure what will happen in 5-8 years when we use house as our PPOR with any capital gains tax implications but expect that there will not be a lot of gain.
Kevin
Hi Kevin,
All expenses and income is apportioned according to the names on the titles.
In effect if you buy t he property as joint tenants (which defaults to 50/50 ownership) then that is how all expenses and incomes will be split. You may wish to consider tenants in common which allows you and your wife to retain shared ownership but you can weight the proportions according to your needs. For example 75% wife and 25% you (or what ever your accountant suggests).
As for CGT your Tas property will start to incur a CGT liability from the day you take ownership. This will continue until you shift PPOR status from Vic to Tas. Speak to your accountant about how this works.
You may elect to retain your Vic home as PPOR even after moving to Tas. You can do this for up to 6 years and retain CGT free status on your Vic home. This time frame would suit your 'try Tas before making a final decision' idea and allows you to move back to Vic without affecting it CGT free status.
When you move in you will be able to
warek wrote:Buying our first investment property, need help to set up in most tax effective way. Need a large loan and advice about best way to structure property.Not an accountant or broker so take what I suggest with a grain of salt.
warek wrote:My initial thought was that she should become the sole owner but now I am thinking we should be joint tenants. Am I correct that if my wife has the loan in her name she can claim all of the interest even if we become joint tenant in the property? Would joint tenants reduce her ability to borrow 520000?Deductiibility will be determined by ownership details on titles. Who takes out the loan does not affect deductibiliy. If you add your name to the title and loan then you will probably increase your borrowing capacity due to the extra income you bring to the table.
warek wrote:Thinking that is she can claim all of loan interest and we are joint tenants then we can share rental income and claim half of expenses each this must be better than my wife being the sole owner, and receiving all rental income and claiming all expenses. Is this correct?See my previous answer income and expenses will be apportioned at the same ratio as your ownership states. You may wish to consider some sort of tenants in common arrangement Eg 90/10 or 80/20 split. Your accountant will be best placed to advise you on this aspect of any ownership arrangement you enter into.
warek wrote:Secondly finding it difficult to borrow 100 percent of property and may have to use part of Victorian property as extra security, which is worth about 500000. If we take out new loan say 100000 on Victorian property and 420000 on Tasmania mortgage will have no problems with finance. Would the interest on the Victorian Mortgage be deductable against the Tasmania property as it is used to finance the Tasmania purchase?As Jamie has said you'll be able to set yourself up with a line of credit type facility for deposit and costs. This facility will be secured by your Vic property. As this loan is to buy your Tas property it interest on this loan will also be deductible while the TAs property is an investment property. It is the purpose of the loan that determines deductibility – not the security being used.
warek wrote:And if it is deductable then should that loan also be in my wife’s name only?See above about apportioning costs and income. Once again this is specific tax advice and your accountant is best placed to provide this advice.
warek wrote:Should I cash in my super get 100000 back, put that into Tasmanian and not have a loan against Victoria property?Not a financial planner either but I would prefer to retain as much of my assets (your super in this case) as possible. This is moreso the case while you continue to build a nest egg for retirement. On a similar note you see some advantages by establishing an offset account against your Tas loan and trying to build this up as quickly as possible to reduce interest costs on your Tas loan. Using an offset account also means you have flexibility over these funds when you have finalised your retirement plans.
Sounds like you may need a new solicitor – this one seems out of their depth.
