Forum Replies Created
Wonder if were missing out on this bit because of the property slump… food for thought anyway (good times always means increased sales, so they could try to keep bad news at a minimum).
Rgds.
Lucifer_auHerd it today on ABC radio, but in the end I didn’t get to hear (as it went on and on with something to do with water conservation… Grrrr…).
O’h well, hopefully we will find a way so that doing a certain way does not amount to a tax avoidencen scheme… We can only hope though….
Wonder what is going to happen to all these people who have done it!!
Rgds.
Lucifer_auIn some ways it is irrelevant wether a market is booming or busting. Those who have the knowledge will make money regardless.
Saying that though, a down market is when investors really start to make money. Buyers who are desperate are more willing to go along with concepts such as vendor finace, or willing to drop the price way down (so that you can still postitive gear even woth the higher interest rates).
Also with a bust market their are more potential renters (as those who cannot keep up withtheir mortgages are forced to sell).
Rgds.
Lucifer_auR0FL @ aussierogue.
I don’t particularly think it’s the parents. It’s the way the system has been set up. People have always wanted the latest thing – wether it be a new car or a new computer. But there has come a time where people seem to have switched off and don’t realise that they have to pay this debt off.
Perhaps the reason is because the generation which is really getting into credit cards, is the 35-27 age group have never experienced a prolonged down turn – They were still children during the recession “we had to have”, and so they can’t remember the toll it took, the dot.bomb to them was not really an economic drop, and people took a cut in pay but it wasn’t like their was mass unemployment.
This age group are walking debt time bombs, but they just don’t care, they will still go out and get their nails done, even if there credit cards are maxed out and they can barely pay off the car loan!
The only solution would to either rise interest rates or deny people credit (go back to the days when the RBA would control different loan sectors, consumer, residential, business, etc).
Rgds.
Lucifer_auI read the book: “if you want to be rich and happy, don’t go to school”, it changed my life. I knew at that point that I didn’t want to be an employee. That was the moment I commited to becomming a professional invesotr (i.e. someone who dosen’t have to rely on a wage).
Rgds.
Lucifer_auWith commercial you will have to put up a 30% deposit so go residential. With residential you can go as high as 97% lends.
Check out Steve McKnights book – ‘130 properties in 3.5yrs’, as that provides a good base.
Rgds.
Lucifer_auI guess this makes a strong case for using a company, rather than being a sole trader.
Rgds.
Lucifer_auPutting $1 for rent is kind of like red flaging yourself by walking into the ATO’s head office and yelling “I’m ripping off the government!! Look at me!!” and it will result in you being audited and at the very least having your losss denied by the ATO (Redwing was right). More details required.
Also it seems CentreLink are quite good at this sort of thing, so check them out.
Rgds.
Lucifer_auWhy not use a trust to invest in property??
They only have to pay 15% CGT and there money can flow through to the company/lowest paid person.If you invest through super, you cannot borrow funds to buy property (i.e. get a mortgage. Yes there are ways around, but why not just use a trust anyway…).
Rgds.
Lucifer_auYou might want to check out a book called ‘Money Secrets of the Rich’ by John Burley. It is an excellent book which can reduce your expenses by up to 20% without you even noticing it (for example he gives advice on different insurance (whole life insurance is horrible!), how to pay off all consumer debt within 5-7yrs (inc. your mortgage!), etc. He also teaches you how to do a no-budget, budget.
Marco’s advice comes straight out of chapter 1 of the book.
Hope this helps.
Rgds.
Lucifer_auI would be real concerned about commercial property, as if the guy disappears you could be left with large non-poerforming property. This poses problems for two reasons, the first is if you try and sell the property (as the value is determined by the tennants (how long do they have on contract, etc)), the other problem is that it can be hard finding new tennants, for example if you take over a commercial space with a warehouse, no one may want it, yet put a fence round the warehouse and a trucking company might throw money at you….
Also don’t lend out on shop fronts that aren’t in popular areas and it can be quite hard to find a long term tennant (one such place I know of has had, in less than a year, three tennants).Also make sure in the contract you can reposes the business assets if they don’t pay (this is in normal commercial leases).
Rgds.
Luicfer_auI think I would have to agree with you. One of the good things about a trust is protection of assets. It would be pointless if that protection would be removed….
Well here hopeing!
Rgds.
Lucifer_auOnly if it was a profitable concern (i.e. you sold the fruit. If it was a tennant just eating the fruit, no).
Rgds.
Lucifer_auWow!!!
This is bad news. I feel that we should get a small party together and kneecap the bloke who refused to pay the rent…
What are your thoughts on a company being trustee???
Also what are the implications of lawsuits??? (is the trustee liable for accidents (i.e. some moron trips over a carpet and sues you for six figure sum??)).Rgds.
Lucifer_auA company can be a beneficiary, so you won’t pay over 30% tax rate after it’s gone into the trust (and got spent), then into the company (and got spent) and then taxed on whats left.
You say you are thinking of setting up a company to buy properties, but why??? You don’t get any discount to any capital gains you incur… Also how will you control you investment with the other two people (who will decide what to buy? Who will decide where to invest?, etc)??? What happens if you want to sell and the other two members don’t?? Who will run the investments?? (i.e. the person who decided what to pay for repairs and any improvements?, wether to drop or increase the rent, etc).
Perhaps you need to get professional advice (with a lawyer and an accountant!), as it sounds anything but smooth…
Rgds.
Lucifer_auI give my investors 15%, so it’s not that hard to find a source.
Unfortantly you have to trust the buisness owner / investor. If you couldn’t handle letting someone manage the money for you (and you weren’t interested in buy RE or trading options), then it would probably be best handing your money over to a big company like colonial or vanguard (indexed funds), though of course your funds might not even make 2%, let alone 10%.Also $300K isn’t very much to live on….
Rgds.
Lucifer_auThere is a 1031 exchange in the US, that allows you to reinvest money after selling a property into a more expensive property, without paying CGT (all you do though is defer it).
In Australia there is no law to my knoweldge that would allow you to do that for commercial, let alone residential.
I would be interested if you found out if this guy’s accountant had figured out how to do it… (time for a new accountant!).
Rgds.
Lucifer_auBecaue bankers aren’t investors, there boring, dumb bankers.
Thats why investors tend to use Mortgage Brokers.
Rgds.
Lucifer_auAlready beat you to it…
http://propertyinvesting.com/forum/topic.asp?TOPIC_ID=10352Rgds.
Lucifer_auYou have to prove to the bank you have a savings record too. Without that the banks won’t lend you any money, unles you have a large deposit and it is gifted to you. Even then hey still want to see regular income (say from a job).
The reason why banks won’t simply lend on positive cashflow without you having a job is that what happens if the place sts empty for a while, like up to 6-7 weeks???? In rural areas this can happen.
Perhaps start up a trust with your defacto, so that they use his income, and it is quite tax effective. Gettig any part time job (with one where you can work as many or as less hours as you want is great!) can really help you get a loan.
Rgds.
Lucifer_auRgds.
Luicfer_au
