Forum Replies Created
Hi Kay,
Anyone who received Michael Yardney’s latest newsletter could have downloaded a audio of a ‘renovation discussion’ between Geoff and Paul.
Makes for interesting listening. Not sure if the link is still available.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi mcubed,
I would be inclined to wait until that piece of paper arrived.
As you expect to have this confirmed in the near future there is no need to rush. While this particular deal may not be there when/if you are appointed there will always be another and another and so on.
You do not indicated how old you are but I would suggest that you have time to build a sound foundation upon which to start your investing – advance your cause initially by ensuring you have an income to support this initial purchase.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Kay,
Go and buy the book.
Nah – the comment arises from comments that have come back to us from varous sources.
In short pursuit of cashflow+ property without other due checks and balances can be dangerous – a bit like all property investing really – and can result in an investor failing to see the long term costs that may be incurred which can then result in a property costing more than it returns, not only from a cashflow perspective but also from a sustained growth perspective.
Buying a property in an out of the way place (and we have seen the questions asked here on a number of occasions) purely because it is cf+ can be a little short sighted.
Some people may have seen a recent comment in one of the Sunday columns about someone who paid $50K for a property and now cannot sell it for $15K.
I also heard of a similar instance in Carnamah (small WA town) when a local bought a property for $6K, put $10K into it and sold it to a cashflow investor for $48 in a less than 6 month period. Is that a 300% or 800% capital gain in a short period of time?
All I can say is that knowing Carnamah (which is shrinking) the investor would have got better returns at the front bar.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Jen,
There are two aspects to depreciation.
Plant and equipment (all the goodies inside the building) – some of these may be 100% depreciable if they fall into the low asset pool. Others will have a depreciable life that extends beyond the 6 month period – I assume these will be apportioned too.
Capital depreciation (the buildings) will be apportioned over the part of the year that the property is an IP.
Will move this thread to legal and accounting.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Jen,
The FHOG passed me by many years ago so please take what I say with a grain of salt.
As the property will still qualify as an IP for the 6 months or so that it is rented you will be able to claim the costs outlined in your initial question.
Be aware that expenses such as rates, body corporate fees, insurance etc will be apportioned over the period of time that the property is an IP – you will not be able to claim a full year of rates for example.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958There are a few possibilities that you could consider.
1) Convert your loan to I/O. This will save some of the outgoings.
2) Check you current rent to ensure it is at market rate. Some PMs and/or owners lose touch with what the rest of the market is doing and this could be costing you money.
3) Is it possible to add value to the property while at the same time increasing the rent even further. For example some tenants are happy to pay rent + for items such as airconditioning and security. new carpets maybe, the list is endless and your individual circumstance will determine what can and can’t be done.
4) You haven’t indicated the age of the property but it may be possible to depreciate all/or parts of the property.
5) Have you considered the advantages of a ITWV that can assist with your pay period cashflow?
Ultimately the cashflow issue needs to considered in light of your personal finances. You also need to consider why you have the investment property – cashflow is but one part of the equation.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi K & R,
It is possible that the people that regularly referred here are swamped with would be clients and/or they have a full book and may not be in position to take on new clients.
I have a couple of other names I can throw your way if you wish. PM me for their details.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Chris,
Not an accountant so disclaimer applies.
As far as I know you will cop the lot; stamp duty, vendor duty and there will be no exemption from CGT as the property is held in a company name.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi all,
There was some discussion about effect of migration on house prices within this thread (thought there was more – maybe confusing threads [exhappy])
Caught this paragraph (or 2) in this morning’s Australian and thought it may be of interest.
Simon Tennent, the Housing Industry Association’s chief economist, said demand for housing, driven by overseas migration and new household formation, usually rode out booms and busts alike.
“Traditionally, we have an annual need for 160,000 new dwellings,” he said. “We’ve been building more than that – but only marginally – during the boom, but before that we’d been substantially below that figure.
For link to the whole article;
http://www.theaustralian.news.com.au/common/story_page/0,5744,12847021%255E25658,00.html
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Wilko,
Food for thought?
http://www.lifestyleonline.com.au/pdfs/Matters%20August%2003.pdf
Cheers
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Risha,
We need more information before we can be of assistance.
Are you wanting a REA to buy, sell or manage a property?
Cheers
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Hutch,
Listen well to Michael’s comments.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Please note I am assuming your are considering buying as tenants in common.
Before even considering what sort of property it would be advisable for you and your partner to sit down and work out what your individual and collective goals are. If they are out of sync then there maybe some difficulties doen the track – having said that as you are already partners this issue has probably already been canvassed.
For me – I would prefer something of quality as close to the respective cities as possible. Vacancy rates are dropping and rents are rising so any returns will be on the improve in the near future.
Obviously you will need to consider budgets etc to ensure you do not over extend yourself.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Originally posted by raficwww:WHERE ARE THESE POSITIVE CASHFLOW PROPERTIES? I HAVE BEEN LOOKING AS CLOSE TO MELBOURNE CITY AS POSSIBLE. ALTHOUGH I UNDERSTAND THAT MOST OF THESE PROPERTIES ARE USUALLY WAY OUT OF CITY AREAS. CAN ANYONE GIVE ANY IDEAS? MAYBE WE COULD EVEN CHAT IN PRIVATE & POSSIBLE A SPOTTERS FEE FOR THE RIGHT SORT OF PROPERTY. ANY IDES ANYONE PLEASE EMAIL ME
THANKS
Don’t shout – capital letters are considered to be poor netiquette.
As you indicated in your post finding cf+ close to Melbourne is a tall ask. General feedback is that they seem to have all been purchased and those that are left are poor investments.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Suggest you use the search facility as there have been previous comments about hunterhousehunters in various forums in the past.
Search can be accessed top left under forum boards.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi TBS,
The advent of technology is giving the ATO greater capacity to ‘red flag’ people and transactions. Whether or not they could identify the scenario being discussed as being outside the tax act I don’t know.
However, I will say that for the sake of a $1400/annum ($20K @ 7%) deduction – is it worth it?
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi all,
Retracing old ground and getting nowhere. FFComm has directed Learningtoinvest to a lengthy discussion which canvasses the many and varied responses.
As the matter is now in legal hands – lets leave the discussion there.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Originally posted by theBuildingSurveyor:If additional payments are made of the pricipal on an IP Loan such as a Lump sum payment of 20K etc, to reduce interest etc, then this money is redrawn for non-investment purposes, (such as a car) will the interest amount after the money being taken out again be tax-deductable, or before the money has been taken out.
Whether the interest incurred on the extra borrowings is tax deductible is determined by the purpose of the loan. Under the circumstances described – this ‘redrawn’ interest is not deductible.
The balance of the loan (for the IP) remains tax deductible.
Does this money have to go in an off set account instead.
Placing ‘windfalls’ in an offset account is much tidier and certainly makes the ‘is this deductble interest or not question easier to answer’. Bear in mind the windfall proportionally reduces the interest bill for the period of time that it is there anyway. As such the net effect is the same.
It would make it very hard for the accountant to work out the interest amount if you redraw several times on the loan. Any comments would be greatly appreciated.
Can be done – but needs an apportioning process and very good record keeping. Also bear in mind the accountant may charge ‘extra’ for long hours spent over a calculator.
Have also moved this post to ‘legal and accounting’ forum.
Cheers
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Originally posted by Dazzling:Plenty of props out there off the shelf that are +CF with 100% finance plus all acquisition costs.
Hi Dazzling,
You confuse me. [biggrin]Commercial or residential?
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Bachu,
I would recommend that you do not over extend yourself. Buying a PPOR can be a costly and long event and if you bite off too much then the pain can be significant.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.
