Forum Replies Created
Hello jdchcn
If I where you I would first go into student accomodation instead of buying something straight away.
This is for 2 reasons.
Firstly because this would be a good way to make friends quickly with students from all over.
Secondly it would give you time to find out where you would like to live in Sydney and how much you should have to pay for it.
Good luck next year at Tafe. [smiling]
ElkaHello Barts78
I’m happy to tell you what I supply my accountant.
He does not need any original documents but you need to have them, neatly filed [rolleyesanim] , so that you can supply proof if asked to by the ATO.
I do the “adding up” myself and just send him the yearly totals for each property seperatly which looks something like this.
Income : total annual rent
Expenses: agents fees, commissions and advertising costs
insurance
landlords insurance
water
council rates
repairs and maintenance
Interest on loan(s)
legal fees (if any)He fills in his own accounting fees [biggrin]
The only time I split out repairs is if I belive that some of them may not qualify as repairs but will need to be treated as improvements. This way he gets the chance to do some creative thinking (just kidding)
If you’ve bought or sold an IP in the year you will naturally need to supply all those costs as well as buying selling price for CGT purposes.
It may be simple but it works for me as I am OS.
Hope this helps [smiling]
Elka
Hello
Terry, in Vict. only for land acquired by a DT on or before 31 Dec. 2005 were you able to nominate someone to pay the land tax and so not incur the surcharge. For land bought by a DT after that date a surcharge always applies.
For a unit trust the land tax is charged to the unit holders (if they are named, otherwise surcharge applies) in proportion to their unit holdings. This is naturally aggregated to their other land holdings.
I asked help about this problem some time ago and there were a few good posts there.
igrapleu if you are interested here is a link to it .
https://www.propertyinvesting.com/forum/topic/23233.html
Cheers [smiling]
Elka
Hello Callander
Basically you can rent out your PPOR for up to 6 years and not have to pay CGT when you sell as long as you don’t declare any other place as your PPOR during that time.
The best thing would be to go and speak with your accountant about this. Here is a link about this subject on the ATO site.
http://www.ato.gov.au/individuals/content.asp?doc=/content/36888.htm
Hope this helps
ElkaArt
How many student places does the property that you are looking at have.
Simon mentioned his council not considering anything less than 10 to be a boarding house. That’s the same number that the person I know said his council used and this is in another state to Simon so this may be pretty standard.
The person I know has 9 rooms.
Elka
Hello Artaud
I don’t own such a property but I know someone who does. Since no one has answered so far I will tell you the little I know. [smiling]
As you say unusual costs include internet and common area cleaning but also electricity, water and gas. The person I know supplies cleaning products (dishwashing liquids etc) and such things as toilet paper etc as it costs relatively little and saves a lot of hassles between the occupents. This all has to be factored into the rent and the utilities need careful monitoring to make sure they stay reasonable.
I believe you should check with the relevant coucil to see how many occupants your allowed to have per house before it’s classified as a boarding house. I think you want to stay under this as this brings on a whole new set of rules and regulations I believe.
I don’t know if all agents will manage such a property. The guy I know does it himself and is there very regularly (at least a couple of times a week).
I know his tenants are on 12 month leases but I don’t know if there is anything special about the leases. I could ask if no on else on the forum can give you an answer.
Hope this is of some help.
Cheers
ElkaHello pkchan76
Have been thinking of using this method myself and wondered whether you would be prepared to disclose approximatly what such a service costs.
Don’t worry if you would rather not. [smiling]
Cheers
ElkaHello Delboy
crj is right. It looks like it’s worth investingating further.
The things I would be looking at are:-
Are all 3 shops let to the one tenant.
What sort of business is it.
How long have they been there and how long is the lease/renewal options/ rental increases in lease/who is resposible for repairs. etc.I would also:-
Spend time in there to see if it’s a thriving shopping centre or pretty quiet.
Maybe ring another agent in the area and inquire about renting a shop in the centre. The point is to find out if there is regular turnover of shops or not. My concern would be that in a “bad” shopping area if the current tenant leaves you may be stuck with empty premises for a long time.
I would be also interested to see if there was a chance to split the 3 shops out onto seperate titles and how expensive this would be and whether this woulds add value. You may at some stage want to sell one to get some funds. This would not work well naturally if all three are rented out to the one tenant.
Just some of my thoughts.
Hope this helps [smiling]
ElkaHello all
As I am leaning towards buying a commercial property as my next IP I am also trying to educate myself in this area.
In the ad. that delboy posted it states that no GST applies as it’s being sold as a going concern.
I thought at first that it meant that you are buying the business(es) as well and that this is really meant for people looking to run the business rather than investors. In that case though I would have expected them to tell you what the business is. ?? [blush2]
Can anyone tell me what that means please.
Thanks
ElkaBut Simon, it’s the ANZ. As Australian as it gets …. almost. [smiling]
Elka
Hello all
I have now recieved an answer to the question I posted here from my advisor at the bank. His explination is as follows.
“A Standard Mortgage is taken over Residential Property to facilitate lending for investment purposes, for example, this can be taken over a owner occupied property when it is supporting equity to facilitate lending for a rental property.
A Consumer Mortgage is only taken for owner occupied Home Lending.”
Of cause I still don’t know the fine points of why there is a difference. I thought a mortgage was a mortgage was a mortgage. You default, they take.
Obviously I’m a novice in the world of finance it seems. [blush2]
Anyone enlighten me? Is the difference important?
Thanks
ElkaThank you Terry. Clear as always. [smiling]
Hello Greenhorn
$100k ouch!! indeed. [glum]
They built so many appartments around Melb. CBD that the oversupply also helped to drop the price unfortunatly. However, I think there will come a time when these properties will experience good capital growth. It may take some time though.
Personally I would not sell but would look for ways to try to increase the income. I don’t know how many bedrooms it has or what you are getting as rental, but have you thought about turning it into student accommodation for example. There are plenty of overseas students studying in and around the city looking for furnished rooms I think. You could maybe also turn some of the living area into a bedroom or even 2 dependiong on the size. Also depends on how many bathrooms you have. I think 1 bathroom with seperate toilet is good for 3 rooms. Naturally a room with ensuite rents for more.
RMIT has a departments to help OS students find accommodation. Maybe talk to them and find out what the needs are and what the rental per room is etc.
Here is a link to RMIT to get your search started.
http://www.rmit.edu.au/browse;ID=wm0mg88wcg4y;STATUS=A?QRY=accommodation&STYPE=ENTIRE
The other end of the scale is OS executive accommodation but I belive only some buildings are popular for that and you are expected to have it furnished to a very high standard.
Good luck
Elka
Hello Josh
Thank you for the offer of help. We are leaving for the coast today (it’s summer here in Europe) but will gladly take up your offer when we get back in a week.
cheers
ElkaHello Andy
You may want to read through the thread at the link below. Someone was just asking the same sort of question a few days ago. There might be some information there you can use.
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=24430
Cheers
ElkaHello Josh
I should have explained further. After reading the post about cross securitisation I emailed my advisor at the bank to ask about the mortgages on my 3 properties.
His answer was that 2 of the properties had “consumer and standard mortgages” and 1 had a “standard only mortgage”.
The property that is cross security for the other two is one that has a “consumer and standard mortgage”. The property I bought last has the “standard only mortgage”.
I wondered what the difference was.
This is not a structure that I would repeat after having spent the last few months educating myself. I am still in the process of asking for answers from the bank but I assume it will cost me heaps to get this untangled. I don’t know if it’s worth doing until I find my next IP and see that I can do better elsewhere.
Thanks
Elka
Missed both of those points in your post Richard. Sorry.
My only excuse is that I am busy balancing on my head. [wink2] [wha]
Elka [smiling]
Hello Stuart
A good read. Thanks. It has prompted me to take some action that I have been ignoring for awhile. [blush2]
Cheers
ElkaThe big disadvantage with buying property in a company is that you don’t get the 50% CGT deduction if you sell.
A disadvantage in buying investment property in a trust is the extra land tax.
More to consider. [smiling]
Good luck
ElkaIt’s true Terry that as an non resident you get to pay more income tax. As you say, no $6k tax free limit and you get to pay 29% from the 1st dollar. At around $21k and up your on the same scale as a resident. That’s roughly $4k extra tax per year. [grrr]
So it depends on your situation whether a non resident status is the best for you if you’re only leaving for a couple of years.
As at the time my main income was being earned in Singapore and the structure that the accountants set up meant that a big portion of my contracted fee was being earned in a tax free place leaving only a small portion to be taxed in Singapore, that was a small penalty to pay. This was also before CGT was introduced so I didn’t have to take that into consideration.
Re CGT on property in Oz today. I would love it if you could tell me how to avoid this. I am a non resident. I live in Belgium and have for many years since I met my husband here on a “temporary” job contract.
My accountant in Oz and the information I have read on the ATO site both indicate that I will need to pay CGT in Oz if I sell any of my IPs there.
I would be very grateful if you could show me that I am wrong. [smiling]
Cheers
Elka
