Forum Replies Created
HI,
Prior to entering any agreements I would suggest that you get a Pre-Approval from a lender for the SMSF, and make sure that they will accept your Trust Deeds and the Security. Many people do not understand the "Single Acquirable Asset" that a SMSF needs to invest in and what the lender will accept as well. Getting a pre-approval will let you know what you need to achieve to get the funding and save you a lot of time and money. There are companies out there who have pre-approved Trust Deeds.
Cheers Grant
Hi Wilko1,
The ATO is forever changing the legislation and policies. The last amendment was on the 20 th June 2013. I have noted two useful links into the ATO website which will explain a few different scenario's and also the 2013 Property Investment Guide.
A little research upfront is always advisable because if the ATO start looking into your Property Investment transactions, it is very likely that it will not stop there!
http://www.ato.gov.au/uploadedFiles/Content/MEI/downloads/ind00342353n17290613.pdf
Cheers Grant
Hi,
Received the book today, looks to be a great marketing tool with get this for free and that for free. I am always cautious and look for the motive from all marketing approaches, in saying this I will look into investing my next $100 into buying my next 100 properties, hopefully after reading furthermore in the book I can learn how to do so. I am sure there will be some tried and proven examples from the past, if legally they are possible today may be a question, but as I said, I need to read the book. Keep your mind open to new concepts but move forward with caution.
Cheers Grant
HI,
I would consider looking in some regional areas in medium size towns for Duplex options. There are opportunities in some areas where you can get a 3 Bedroom, 2 Bathroom, Single Garage for under $250 k with a $300 per week rental, and vacancy rates under 1%!!
Look abroad in various markets, if you struggle, look for a company that can provide a solution such as a Buyers Advocacy as they will do the research, find property options and complete an Analysis on the investment.
Cheers Grant
HI,
I note past Blogs refer to selling, costs, performance and looking for a better deal. If you sell you must consider further losses such as Real Estate Agents commissions. Have you done a full Property Investment Cash flow Analysis, identified your losses and considered an Income Tax Variation if you are losing cash. I am not saying to not look at selling the property if it is under performing, but I do recommend completing a full analysis from an external company that has the skills to do so and give you an Educated overview.
Cheers Grant
HI,
Setting up a Trust Fund can come in many forms, Family Trust, Unit Trusts and a SMSF is also set up on a Trust basis, Definitely seek Financial Advice, but one thing I must note as I always do, "What is your strategy and what are you trying to achieve", remember the vehicle is the property which is what assists you to achieve your goals within your strategy! Advice is one thing but knowledge will "Empower you to Achieve".
Cheers Grant
Thanks Spongy for your kind comments
HI,
I would be a little concerned about the Cross – Collaterilisation and also the lenders All Money Policy. This is where the lender can call in all borrowings if the client has issues somewhere within the Portfolio. There will be also additional costs for the Accountant to work through the Interest Splits and Costs etc. through the Portfolio which could be potentially hundreds of dollars.
I would be thinking about lender diversification to make the Portfolio stand alone on each security, and I cannot stress that getting the right education and financial grounding early in a Portfolio is high on the list of things to consider.
Cheers Grant
HI,
First thing is to talk with your Accountant, but I am very sure that if you can demonstrate to the ATO that your intention from day one was that the property is for Investment, you can claim the interest and costs. How do you do this, get a Property Investment Cash Flow Analysis report by an external company, get Rental Appraisals from a local Real Estate Agents, I suggest at least two for your own reference, and make sure your loan documents and accounts state that the loan is for Investment.
Cheers Grant
HI,
I think you will get a number of options to consider around your current Financial Position, I would suggest that you look for a neutral company that is not selling Investment Property, get some education across all aspects of property and I would also suggest Diversification. Property is one thing, there are also a number of other options as well that just may complement your current position as well as your future strategy. If you were a client that I was talking to I would be strongly suggesting a Financial Planning consideration to your strategy, by the way I am not a Financial Planner!
In saying this, my portfolio is and has been diverse, with this income and your potential lending opportunity, you could look at various strategies from Negative Gearing turning to Positive, or look at areas where there is a little more risk such as Mining where you can get up to 10%+ on Residential.
I am not endorsing this strategy but I have 2 properties with in my personal strategy where we have had to take a fall back position on rent from $3,000 pw to $2,100 pw due to the downturn in Mining, subject to your gearing and borrowing you may look at something like this as being viable strategy to get a return that you are after, but as I did say I do not endorse this strategy as there is Risk and this should be calculated.
Bottom line is do the Research, understand the Real Potential, work through the Cash Flow and Tax Implications especially around Ownership Structures, and Diversification and Risk Analysis, and Estate Planning.
Cheers Grant
HI,
I would suggest to look at how the ATO is looking at PPR turning into Investment Properties. If you were to move into a property as your PPR and renovate, keep it for more than 12 months to offset the Capital Gains Tax, and then sell, the ATO is watching these transactions, especially if this is done on more than one occasion. If you were to keep the first PPR as an IP and purchase your next PPR all good, but be mindful of what your strategy is from there. I recommend you talk to your Accountant or at least get onto the ATO website to research any changes. The idea that has been the norm for years is to buy a house, live in it whilst you renovate and then sell after 12 months to avoid Capital Gains Tax, move on to the next house and do the same, lookout the ATO are on to this and you may find all of a sudden you are in the business of Renovating and liable for GST and Income/Business Tax!!!!
Cheers Grant
Hi,
My first call or visit would be to Council and looking at what they have on file, if and when are local utilities going to be available, if not for sometime, what are the costs to make the improvements needed for supply, look at any easements and covenants as well. Even if you are wanting to sell in the coming years, all of these costs may deter potential purchasers, but on the other hand if you were to implement these services it may add value.
Grant
HI,
Tenants in Common is noted on the Title, so when settling the land, this is where your ownership split should be noted. As far as the actual percentage is concerned (No Financial Advice Given Here on), it will really come down to your tax rates. If your wife is out of work for a few years and there is no income, another consideration may be to allocate a larger percentage to her, best person to run the scenario would be your Accountant, or a company that can complete a Portfolio Property Investment Analysis for you based on real numbers.
Also consider completing an Income Tax With Holding Variation as this will assist with your cash flow on only one income, once again a Portfolio Property Investment Analysis will be beneficial.
Grant
Hi Bricman,
The old saying, "no friends in business" comes to mind. First thing to consider is that you are not their overdraft facility, are they taking advantage of your generosity, and are you feeling guilty for what they have done for you in the past, and has their input been noted financially for work done on the improvements for the kitchen?
I always say to our clients "Are you a property manager?, if not employ one so that the law can be applied when needed, insurances such as Landlord Insurance can be claimed as the correct process has implemented by the Property Manager.
At the moment you are how much in the red due to loss of rent, interest cost and stress? I strongly suggest that you remove yourself from the relationship and hand it to a Property Manager, when you add up the cost of a PM and your loss, the numbers will stack up.
Hope this helps, no emotion, be analytical and address the numbers in your business, which is your P+ Property Portfolio.
Cheers
Grant
Hi,
I suggest that you seek legal advice and make contact to the State Revenue Office for an opinion. You may find that you will need to pay stamp duty on the total value! Recently we were contacted by a purchaser (the Son) regarding a favorable purchase from his father. The father had gifted $50k equity and the contract was written up at $50k under value, so Stamp Duty was calculated on the lessor amount. When it came time to stamp the transfer, the State Revenue Office came looking for the balance of the Stamp Duty as it should have been calculated on the Value of the property, not the sale as it is a "Favorable Purchase". Due to lack of understanding, the son was pursued for the stamp duty, the property could not transfer, a disagreement came about and it simply ended up that the State Revenue Office placed a Caveat on the property!
HI SirDangerMouse, My first port of call would be to get the Asbestos assessed and quoted for removal if in fact it is asbestos. The Bathroom is the most involved with the amount of trades needed, so I would suggest starting with the Bathroom and whilst doing this, look at the hot water service, its age and consider replacing it at the same time. The Kitchen would be my next consideration as once again, if a Kitchen renovation takes longer than anticipated, it may upset the household. The Bathroom and the Kitchen will keep a happy wife, and as we know, a happy wife a happy life!
Most importantly, make sure you have a budget and stick as close to it as you can, as costs can runaway from you very quickly and it may challenge the completion date. Regards Grant
