There are certainly legitimate reasons for using a Hybrid trust and, properly administered etc, they’re AOK and above board.

But, please, don’t take advice from a “friend”. Get a specialist to advise you. Ed Chan from Chan & Naylor Accountants in Sydney is awesome. He’s an investor and developer himself and one of countries best and most…[Read more]

I agree with Terry. You have to be very disciplined to work well with a LOC – the additional funds available at call seem to be very tempting for many people.

With your interest rate at 5.57%, I’d be staying put and follow Terry’s suggestions.

Megan

http://www.propertyhub.net

Tony

I agree with Terry re offsetting non-deductible debt and using offsets is a good strategy. As well, with our developments, we take some profit in cash (amounts that we can either offset against neg gear losses or amounts to keep our tax to a minimum and hold the rest of the profit in the properties.

Perhaps a mix of both, plus using the…[Read more]

Tony

I recommend you speak to Ed Chan of Chan & Naylor accountants. This guy really knows his stuff, he’s a developer himself and is amazing with structuring – probably one of the best experts in the country. Email me if you want his details.

I’d also have a think (and get some advice) about developing in your own name – not many developers do…[Read more]

Sorry Kay, I don’t agree with you.

If you sell a property (esp. one for around $1.3M) you lose whatever it costs you dispose of it as unrecoverable expenses i.e. money down the drain.

Even though you might replace it with another well-yielding property, the $$ it cost to sell you is money gone – whichever way you look at it -as it the stamp duty…[Read more]

Pinnie

TMA makes a good point in relation to deductibility of interest however, if you are planning to hold the property long term, or if your (or your partner’s) circumstances change this could come back to bite you.

For example, if the highest income earner retires or stops work for another reason, the losses (and deductibility) are in the…[Read more]

Don’t know that I agree with Terryw’s opinion. You don’t need to sell to get the profit out. If you do, yes, you get the cash but you also deplete the profit by the tax.

If you don’t sell but hold the development and unlock the increased equity through borrowing against it, you don’t lose the tax and still have an appreciating asset.

Yes, it’s…[Read more]

Here are my thoughts – for what they’re worth.

Firstly – I try to never sell for a couple of reasons. Every time you sell you deplete your asset base by
1. The costs of the sale (i.e. agent’s commissions, legals, etc)
2. The stamp duty to buy back into the market.
3. Any CGT or other taxes.

Currently, from what I can gather, you have an asset…[Read more]

Ed Chan from Chan & Naylor in Sydney is awesome. He’s a developer and investor himself and what he doesn’t know about property, developing and structuring you could write on a pinhead. He’s also a huge forward thinker.

I never make a move without him.

Fiona

Home

What a fabulous topic!

Unfortunately, we’re all surrounded by people who want to bring us down (ah, yes, the tall poppy syndrome is very alive and well in Australia!)

A couple of years ago, I heard Dolf de Roos say that a person’s income is typically the average of their 5 best friend’s (try it – it’s amazingly true). If you want to raise your…[Read more]

I agree with most of the people here. I had a friend that did what you’re proposing – kept renting and acquired her first property. She’s now up to no. 3 and has her own place as well – but didn’t buy it until after no. 2. The first was cashflow neutral for the first year but then positive. She found that her rent was much cheaper then a…[Read more]

Hi

I agree. An Option is probably the best way to go in the circumstances. Good luck with the subdivision. Sounds like it will be lucrative for you.

If you are keen to hold the properties, could you look at releasing some of the equity to fund the negative cashflow. I’m doing it with one of mine and it sure beats selling them as we all know…[Read more]

I’m not sure that you should be scared of debt as such, remember that property traditionally doubles (as proven over 100 years) every 10 years so you can either live from equity increases as the property increases in value or sell it to live off. I’m fairly adverse to selling real estate only because the sale of a property depletes my assets by…[Read more]

HI

Tuggernong Valley is up and coming and Canberra is predicted to be one of the best growth areas over the coming years. Try Conder (in the south) or Gordon – still some good priced properties.

I do a fair bit of business in Canberra in the property market. If you let me know what you’re looking for, I can perhaps steer you in the right…[Read more]

There are organisations that specialise in development finance (look in the weekend papers for some). Banks are notorious for giving the worst kind, some of the “specialists” in this area know what it’s all about so will give you loan with staged drawdowns and allow you to capitalise the interest and repay the lot when the project is sold at the…[Read more]