So how would the rent be deductible if you had a family trust???

Aportion of the rent could be tax deductible if you had set up a home office to manage your IP’s howver not sure you could claim all the rent.

Sunshine

I think you’ve got some great points and its always imporatnt to consider the long term view.

Although the population is aging th population is also increasing. So although a greater portion of the population will be over 50 there will still be just as many people who need to rent.

Also when you couple this with the large increases in…[Read more]

You need to consider what your return is on the cash invested. If you take out P&I loans then you are steadily increasing your cash investment in the property.

Interesting thing when you play around with the numbers is that the more equity you have the lower your return.

Probably best explained by an example:

Property $175,000
Int rate 7%
Rent…[Read more]

Thanks for all the reponses.

Agree that the bast way to ensure good returns is to get the best tennant and then keep them for as long as possible.

I’ve actually seen a couple of IP in Newcastle been turned into student accommodation. These were large homes converted into 8 or 9 bedrooms with a large kitchen and communal area. Then the room are…[Read more]

My suggestion would be to get Steve’s book read through the example and then try it for yourself. Basically your look at how much cash you get back from the cash you invest.

As for finding the properties that’s the next step. The internet is good way to find a few properties and work through the number so have a look at domain.com.au,…[Read more]

Agree with Investron – keep you investment plan to yourself.

A few suggestions
– go to a few RE’s asking what they have to rent, then go and have a look at them. That will give you the best idea of what actual rents are in the area.
– try to look like you are a local or at best that your moving into the area soon. Most RE’s eyes light up a soon…[Read more]

Anytime there is a need there is money to be made. I’m in Sydney and close to the city its quite common for people to rent garages and parking spaces. As a kicker to your rent why not think about renting the house/unit and the garage/parking space separately.

Alomg with the jist of this thread I would stay away from anything that is too packaged…[Read more]

With leasehold you are leasing the property of a third party.

Most property in NSW and QLD is freehold – you can do what you want with it.

The overrider is that the government has the legal power to take possession of any property it sees fit. Although in practice this is rarely the case. If the government decides to build a major freeway and…[Read more]

For region properties have a look at

http://www.propertyguide.com.au

I agree with Steve don’t rely on the internet, get on the ground and get dirty. This might involve some detailed research. Not sure where you are situated but a good start is to get a map and draw a circle of all the areas 1hr from where you are. Then start looking. Do one town per…[Read more]

steveod

Your spot on with your analysis. If interest rates rise many people are going to be in a lot of trouble. When problems happen thats where the opportunity are for smart investors.

With interest rates currently around 6%, a 1% rise is a 17% increase in mortgage repayments. To some people they won’t be able to afford that kind of…[Read more]

Lizzy1

My advice would be to apply the same performance criteria of a 10.4% return. The clients your looking at for the wrap would be similar to the tenants you would be considering in a buy/hold strategy. Therefore you want to make sure that the wrap clients can afford the mortgage/wrap payments.

You can effectively wrap any property but you…[Read more]

Casey

Great idea as this can really increase your rental returns dramatically. Basically you need to look at the capital gains/increased rate you gain against the cost of the renovations.

Is the house in a main street (thought maybe because of the mixed uses zoning). If it what about converting to commercial premises (doctor,lawyer, etc). Rental…[Read more]

Neill

Thanks, I think its important everyone is aware of all the risks/rewards of property investing overseas before they take the plunge. Most of this discussion so far had concentrated on finding the right property but no one had yet discussed the appropriate structures.

The right investing structure is just as importatnt as the right property.

I’d be intersted to know who’s name you bought the IP’s in; the company, yourself/spouse, family trust or another company?

Wouldn’t you want to protect any capital gains you may make from these properties from your business in case profits fall in the future.

As the IPs are after tax cash flow positive it would be benficial to have them in your…[Read more]

Andrew

Again I would stay away from shares as they can go up as easily as down.

I’m an accountant as well and have been for more years than I care to remember. Don’t be afraid of being in cash just because everyone is in shares and is boasting about great returns. You have your goal just stick to it.

Yes you can set up to make regular deposits…[Read more]

Been following this thread with interest.

A few questions for you to all think about:
– Australian CGT and income tax still applies eventhough the IP is in NZ.
– as far as I’m aware there is no CGT in NZ.
– what about setting up an investment company in NZ to buy the IP. That way the income and cap gain would be taxed under NZ law (lower tax…[Read more]

Andrew

I’d stay away from shares as the returns are too volatile for your needs. You have a specific goal and you need to be sure of what the outcome will be.

Looking back at your numbers; you said you need to save $8000 in 3 years. This equates to only $222 per month or $50 per week or $8 per day. Now I have no idea of your circumstances but…[Read more]

Bear

Don’t get me wrong, I don’t agree with the way people can rip off the system. The point is that there are always going to be inequalities and loopholes; the winners are the people that can use these loopholes to their advantage.

We all try and reduce our tax bill using what we would percieve as legal methods. If the government says you can…[Read more]

Why not turn a positive into a negative? Would you rent your property to tenants who were in that situation. Just look at it; guaranteed income and if they have a good credit history; why not?? Possibly even an opportunity for a wrap??

I know of a certain bank (which bank) that has in the past gladly lent money to people in this situation (one on…[Read more]

Jay

I think your reasoning for Steve suggesting that people use only cash savings as the deposit is spot on. Why risk the family home if you don’t need to. But you need to be aware that if you default on your IP then the bank has every right to come after your other assets.

The structure you’ve outlined is definitely the most tax effective. You…[Read more]