Forum Replies Created
Hi Joe,
Real Estate Agents in WA are now supervised by Department of Commerce.
Fact Sheets http://www.commerce.wa.gov.au/consumerProtection/Content/Licences/Real_Estate_Industry/Licensing.html
Try David Linco at Davlin Finance.
Website – http://davlin.biz/
T:8843 8999
David is qualified in many areas and he has set up a business with all complementary services under one roof but excluding property 'finding' services.
HI Marie,
Wot numbers Terry said.
For some reason people seem to think CGT is a major issue. After allowing for 50% CGT discount the max anyone pays (rough, back of the envelope maths) is around 25% of total profit. Even this can be reduced by sellign in low and no income years, pre-paying interest on other properties etc.
But in answer to your depreciation question – from ATO Landlords Guide 2010/2011 on page 23
"Zoran acquired a rental property on 1 July 1997 for $200,000. Before disposing of the property on 30 June 2011, he had claimed $10,000 in capital works deductions. At the time of disposal, the cost base of the property was $210,250. Zoran must reduce the cost base of the property by $10,000 to $200,250."
In your case the $30K claimed in capital works deductions (not plant and equipment) is used to reduce your cost base. In other words your taxable profit increases by $30K (assuming it is all for capital works – which it probably isn't)
Link to Landlords Guide 2010 – 11 http://www.ato.gov.au/download.asp?file=/content/downloads/IND00270214N17290611.pdf
Reaffirming Terry's comment – check with an accountant.
Have you considered leveraging off this property? If the reasons for selling are to move into another property somewhere else you may not have to sell.
Hope this helps
Need a lot more information to give you some more detailed feedback.
How long have you owned this property?
What capital gain have you had?
Taxable income levels?
Any carry over losses you can offset this gain with?
Are you buying another property?
Any other investment properties?And so on……………………………………
There are some strategies but just remember if you owe tax you have made a profit so it is not all bad news.
Hi Jonesy,
Really difficult to give you concrete answers without knowing the name of the company involved. Many people come on here and ask 'Has anyone had any dealings with (insert company name here)" to see what sort of feedback they will receive.
Off the plan and new house and home suggest a marketing company of some description who will be receiving commissions from the vendor.
You need to work out what attracted you to this particular company and what services they provide which you couldn't do yourself.
Whatever area you look at you will also need to do your own checks and balances too. After all it could be (is) your money on the table.
Whatever Harry Dent said was good.
The guy was brought to Australia for a series of speaking engagments and sell hi new book. There is absolutley no doubt in my mind that the negative messages generated by Dent's publicists were purely about book sales.
Mark Bouris has a lot to say about Harry Dent in this articlehttp://tinyurl.com/3sz69vg
No doubt Mark's comments will be considered as 'vested interests' and Dents given more credibility because they are negative.
For the record and in my opnion I believe property prices will remain stagnant in many markets across Australia for a while longer – the key is finding those areas where rent returns and capital profits can be made even in todays market.
It doesn't matter which asset you invest in no-one is going to ring a bell telling everyone the top/bottom has been reached.
Need to make informed decision based on research undertaken. As Jamie said having time up your sleeve is always advantageous. Consider time available, with your family situation, employment security, long term plans and end goals. The answers to these (and many other questions) really dictate what you should do.
Focus on the journey and not the property.
Like most of the wider 'Gold Coast' Coomera is struggling at the moment.
Rents have been relatively stagnant for sometime as have property prices. The Gold Coast is heavily reliant upon the constructionm industry and this is struggling big time. Sure there are big plans for the future and when this all comes off Coomera should be OK.
But………………………………….it all depends upon your objectives, timeframe, the numbers and your personal circumstances..
For more detailed comment the forum will need to see purchase price and exoected rental income as minium.
Not at all – just highlighting how ambiguous conditions can be.
Hi Scott,
You are right – unfortunately many people involved in the purchase of real estate think they can 'do it themselves' and the consequences can be significant.
Even a simple white ant or buidling inspection clause can be poorly worded.
The CPD session had some other examples of 'handwritten' conditions that beggared belief.
Step carefully one and all.
mattnz wrote:I have seen a whole shopping centre with a little house in the middle of the car park.
You win:)
Keep your neighbour in the loop – two blocks will be more beneficial to the developer and also, by extension, you.
I have also seen instances on the Gold Coast Broadwater where someone didn't want to sell. His neighbours on both sides and behind did and the property is surrounded on all sides with 5 storey building. Not a good look I tell you.
Hi Mick,
While you have some time on your side – time can quickly eroded and it then becomes your enemy very quickly. Serioulsy I have lost count of the number of times people come through the door with 5 year s left to work who suddenly decided they need to buy a property becuase they plan on retiring soon. If only they had done seimthign sooner.
Anyway back to your situation……………………
Things in your favour; age, both working, solid jobs, some assets in place already, kids are relatively inexpensive (this will change), and family has some experience with developing. (?)
You haven't indciated how much experience your wife's parents have developing. Often mum and dad investors get the developing bug after property has surged in value and they also want to get in on the act. Unfortunately their inexperience and the changing market can see many fidning themselves in some distress because of a range of factors outside of their control.
On this note I would not be 'banking' on a sure thing with this possibility. There is more to be made leading into a price surge than at the end. Like you I believe the Melbourne market has had its run and its time to look elsewhere.
As a footnote you may wish to consider placing your cash savingsin an offset account linked to your own mortgage.
Off the top of my head PMs who
1. Forget they are employed by the landlord and not the tenant.
2. Are not proactive in rasing rents & attending to maintenance requirements.
3. Are not in regular touch with landlords. (LLs should also be proactive on this too)
4. Allowing tenants to go periodic
5. Being reluctant to get quotes for work to be done.……………………………………………………
What are your plans?
What are your ages?
How old are the kids? Will there be additional education expenses for them soon?
What is career stability situation?
How are you going preparing for retirement with/without this property?
I often find people focus on the property rather than considering their whole situation. Spend a little time addressing some of the questions I have posed along with a myriad of others and you'll get a better understanding of what you should do.
Property is only the vehicle for your journey. You need to know the journey.
Boy – got the full range of opinions there.
I suspect the diverse opinions may be a result of different people within the same organisation. An issue with service organisations can be who you speak too.
Hi Savannah,
Really need to know what your taxable income is before doing such an exercise. Your taxable income determines how much your deductions will be.
Simple rule.
Your gross taxable income + gross rental income = updated gross taxable income.
Eg Earn $120K income + $30K rental income = $150K
From updated gross taxable income deduct all allowable deductions = final taxable income.
Eg $150K – $50K rental expenses = $100K final taxable income.
Then compare tax you should have paid on your gross income exclude rental income with your tax payable for your final taxable income to see what you save in tax.
Tax payable on $120K = $32,349
Tax payable on $100K = $24,955
Tax saved = $7394You will need to consult income tax scales for exact figures. These are available on ATO website.
My opinion – for what it is worth.
I suspect we are in for a 1/2 year period of little or no growth across the 'market' in the broadest sense of the word. As such 'buying off the shelf' through real estate agents and marketing companies will be a slow road to success.
Those wanting to speed things up a bit will need to look at adding value/cashflow strategies.
People often buy off the plan in anticipation of growth in the intervening time period.
Clever marketing mixed with naive investors and home owners are the reason some complexes sell quickly.
But big risks involved.
You are locked into the contract as soon as finance is unconditional, banks rarely (if ever) go unconditional without seeing titles issues, doing full vals and will only grant conditional approval. Therefore, at time of settlement the bank will reassess your position and many things could have changed by then and the bank can refuse your finance despite previously providing conditional approval.
Hi Racmike,
Sounds like the property is negtaively geared (or you are using depreciation claims to improve the cashflow) – if this is the case you are better off with the ownership structure you have. It places both names on the title, maximises security and cashflow.
Increasing ownership to 100% makes stuff all difference in terms of your cashflow.
