Forum Replies Created
Hi everyone,
We have a trust, too.
Just to clarify, the eligibility to the 50% CGT discount is dependant on who receives the trust distribution. eg a person would receive the 50% discount if the trust held a property for more than a year, but if the funds were distributed to a company, the company would not be eligible.
Does that help a bit, or have I muddied the waters?
Cheers,
Kerryn.
Hi Clintjs,
Would love to have someone to play with. So hard to find people to play with!
Keep me updated.
Cheers,
E.
Hi Clintjs,
Very interested in cashflow. It's hard to find ppl to play it with.
Keep me updated!
Cheers,
E.
Hi Richard, Terry & Brett,
Thank you all for your information. The pmi site will be particularly useful!
The problem is that we are self-employed so we are waiting on our accountant for financials. Just looking at our options, as we've hit a bit of a rut. We've been trying to put our business under management for the last 6-9 months, but actually GETTING a manager over here (WA) is almost impossible. (Businesses are actually going out of business over here because they can't ge the staff they need to operate!) We want to get jobs again for the borrowing ability to give ourselves a better kick along.
Any suggestions here? It's hard to save up the 50k+ required for these sorts of loans.
Cheers,
E.
Valuations (read valuers) can be a real problem at times. Most are ok.
We had one valuation done on an IP. At the time the valuer came through we actually had a plumber ON SITE installing a dishwasher. The valuer informed me that even though the installation would be completed that day, he WOULD NOT take into account the dishwasher in the valuation as it had not been completed!!! How's that for harsh!
Another option which I have used before successfully is to contact the valuer yourself & put your case forward. Maybe their comparable sales are not telling the whole story. Do you know anything about any of the recent sales that you could shed light on? Did one have termites? Or water damage? etc, etc.
Good luck.
Cheers,
E.
Hi Emmajames,
We'd be in for it with a bit of notice.
Keep us informed.
Cheers,
E.
Hi Debden,
Have a quick look at this link. By no means comprehensive, but it might help your friend with some ideas.
https://www.propertyinvesting.com/strategies/creativefinancing
I've used the vendor finance & delayed settlement a few times with good results.
Cheers,
E.
Hi Psychiatrist,
A PM is definately the way to go. I agree that tenant insurance is also a must. Check out the policy as much as you check out the PM, though. A lot of policies won't cover you for rent if the tenant is not up to date & IN ADVANCE at the commencement of the policy. Check what they cover for malicious damage. It can be really hard to prove! Is there an excess? What rent period do they cover if the tenant defaults? ie. 6 weeks, 8 weeks, 12 weeks. Keep your eyes open! Get 3 quotes (Terri Sheer & MGA Insurance are both good from my experience).
And as everyone else has said, get her out ASAP. The sooner you can get her out, the less time she has to do any real damage. If you (or your PM) are allowed under the lease, do an inspection 2 or 3 weeks before she moves out (ie. has enough time lapsed since the last one?).
Also, some PMs are trained & some aren't. See what qualifications your prospective PM holds & ask for references from some of their larger clients. Chances are that if they have some larger clients, these people won't put up with much mucking around. Most landlords who are happy with the service they receive are happy to speak to a prospective client. Remember to ask how long they've known the PM, & whether they're related, etc.
Good luck. The more you know about your rights the better your chances will be.
Have a great day!
E.
Very interesting posts here. I'm learning a lot – thanks!
I've never actually thought about a trust this way before. When we set ours up it was recommended by our accountant. I did a bit of research to satisfy myself that this was a good way to go, then went ahead & did it.
Are there any other big potential issues to be aware of? I might go back & do some 'light reading' of our trust deeds tonight.
Thanks.
E.
Thanks Cata & Raddles. Your information is appreciated!
Raddles, you obviously know a lot about this sort of thing. Is there a particular wording that you suggest Cameron should look for in the trust deeds to make the situation as workable as possible? I must admit that I hadn't even considered this situation when we had our trust set up. I might go & check the deeds for our trust, too.
Oh, Cameron is in WA (as are we) if that makes any difference.
And can anyone suggest a good solicitor who knows trusts? Preferably in WA.
Thanks a bunch!
E.
Hi Raddles,
Thanks for that. I suggested to him to go the whole way too. I can, though, understand his concerns as it's something he hasn't done before. As a friend I would rather him give it a go by putting a toe in than not have a go at all.
I will suggest he check with his solicitor.
E.
Originally posted by Terryw:Yearly, and its free!!!!
Terryw
Discover Home Loans
[email protected]
Send an email to get my newsletter.Hi Terryw,
So how do you get a free valuation? [blink] Do you mean by a licenced valuer or a RE agent?
Have a great day!
E.
Hi Ryan,
Putting the money towards a PPOR is DEFINATELY worth considering. You can use the money now to improve your position, then simply borrow against it later when you find an IP. We did this when purchasing some of our IPs. We simply spoke to our mortgage broker (hint – ALWAYS use a mortgage broker unless you have specific contacts in a bank) & arranged a LOC which we used to fund the IP deposit. It means that the loans are kept completely separate, but you can still draw on your equity for funds while still making these interest payments tax deductable as it is for investment purposes.
This is a simplified version, but worked quite well for us. All properties were ‘stand-alone’ but we still accessed equity & usually avoided LMI!
Good luck with your journey! Asking LOTS of questions is a great place to start, & there are loads of experienced ppl here who are more than happy to share their knowledge! [biggrin]
Regards,
E.
Hi Terryw,
Thanks for your reply.[biggrin]
The main attraction for this proposition is not really financial. My husband & I have been property investors for several years. We had ourselves on the way to financial freedom, when our son was diagnosed with an illness which required expensive treatment. We were forced to sell our home & several other properties. Thankfully, the treatment was successful. We have since moved interstate & are re-building our lives again. Our current property portfolio is healthy, but not enough to be able to purchase another home ourselves. Although we have been exemplary tenants, we have had a string of bad landlords, 1 which evicted us because we asked to have illegal dangerous wiring fixed! [comp]
Our current landlords have notified us that they will be moving back from the country, & will not be renewing our lease as they’re moving back in themselves.
Our preference would be to buy a PPOR through the business (company), then buy it off the company when we can obtain finance ourselves. This will probably end up being a more expensive option, but it will mean we don’t have landlords looking over the fence regularly (the last landlords knew the neighbours!), or refusing to fix reasonable maintenance.
It just seemed like a possible solution. The government would get their fair share, while we get to get on with our lives & raise our kids in a safe, clean environment while investing in our future.
Cheers,
E.
Hi Munno,
You are ususally best to keep the two loans separate. It makes it easier to distinguish which expenses are attributable to which loans (properties) & therefore which can be claimed on your tax & which can’t. You might save yourself monthly fees by having the loans combined, but you would probably end up paying your accountant more than you would save when they prepare your tax return!
As Terryw said, an interest only loan on your current property would be advantageous, as you can make the minimum repayments on the IP & therefore sink any extra funds into your own mortgage, which is not claimable on your tax.
Some people would advocate drawing any equity down from your current property to use as a cash deposit for your new place. This would have the advantage of possibly eliminating lenders mortgage insurance by lowering you LVR. You may want to check this with your accountant & finance broker, though, because I’m not sure what the tax implications are since the second loan (& property) is going to be your PPR not an IP.
Recommendation: find good advisers. There are lots of really experienced ppl on this site, so see if someone can suggest an accountant etc in your area.
You would be best to sit down & crunch the numbers. Get an adviser (a REPUTABLE ONE!) to help you if you’re not sure how to get everything right. You may be better off in the long term to sell, pump all funds into the new PPR, & then borrow against this to finance the new IP. The money you save in interest could be substantial, depending on the loan amounts, interest, pay-out fees (don’t forget loan break fees if you’re fixed, etc) & the price of each property.
Consider consulting a broker. There are some really good brokers on this forum who might be able to help you or point you in the direction of someone they know. Again, chose a broker carefully. There are good ones & bad ones. A broker might be able to suggest a financier or product to you that you may not have even considered. And a good broker should not charge you for their services! I’m not one myself, so there’s no bias there, but I’ve used both methods before, & a broker is less hassle & usually a better outcome.
Finally, be VERY cautious in putting a friend into one of your IPs. I’ve seen many fabulous friendships end in tatters because of disagreements on what is reasonable & what isn’t. If it was me, I would definately ‘invest’ in the services of a property manager. It’s an extra degree of separation.
Most of all, have fun along the way! [biggrin]
Sorry for the long post, but I hope that has been a bit of help.
Cheers,
E.
Hi Frank,
Just remember that all states have different laws regarding strata titling. For example, SA abolished strata titles a few years back & they were replaced by community titles. Most of the rules are still the same, but a few changed dramatically (particularly regarding ownership rights!). I believe that NSW, Vic & QLD all have different rules, albeit slightly, & WA I’m told has a completely different system.
Simon’s information was a fabulous start, but make sure you know the querks for your local area & your state. Even some local councils will have separate rules, sometimes a lot harsher than the state-based ones!
Costs can vary considerably between states, & also between local council areas. It’s usually best to check with council what their fees are, & shop around to a few solicitors etc to see what the going rate is in your area.
I’ve seen a lot of people get burnt from the assumption that the laws & by-laws are the same everywhere. Good to see you doing some homework before getting in too deep.[exhappy]
Hope that helps a bit.
E.
Hi,
What happens in the situation where you run a seasonal business, say maybe an ice cream shop or a beach kiosk, & you expect your taxable income to be higher than it actually is? Is there a general rule of thumb that the ATO works on, maybe a %? It would seem to me that there would be heaps of people who would find themselves in this situation.
We run a business in it’s 2nd year, so it is quite hard to predict what will happen season to season. We keep all the records & run all the reports, but we have no idea whether this year will bring a 50% growth or a more normal 20% growth. (Last year’s growth was well above 50%!).
Any info or suggestions would be great!
E.
You might want to check about being able to withdraw voluntary superannuation payments. I checked this with both of our super funds earlier this year, & was told that ALL super contributions are now protected (preserved). This includes voluntary.
We were particularly keen to check this, as we planned to (& currently do) pay our staff their bonuses into voluntary super. We have agreements with all our staff to do this. Atleast it makes them save a bit more for the future, & some of them are eligible for the co-contribution or other benefits too.
E.
Hi all,
For those of you who are brokers or those of you who already have trusts, how hard is it to get finance for a property to be purchased in a trust? We already have a number of properties but due to poor accounting advice (by a qualified accountant, too!) they are in our names.
I see that someone suggested to have a separate trust for each property. How much does it usually cost to set one up? How much work is it to ‘maintain’ a trust? Do you do it yourself, or does your accountant or solicitor do it for you? Does it affect your borrowing capacity or LVR to have them in separate trusts?
Thanks.
E.
