Forum Replies Created
Hi GreatPig!
I might leave the good old tax act for another night. Thanks for the link though…
It seems that a lot of people incorrectly treat the terms ‘discretionary trust’ and ‘family trust’ as being interchangable. I had this problem when talking to my (previous) accountant. He kept dropping the term ‘family trust’ when I was talking about getting a ‘discretionary trust’.
I am pretty certain that a standard discretionary trust need make no election to carry forward a loss (in fact it is automatic).
I can’t see any reason that anyone would want to make the once off, irreversible election to make their trust a family trust. I can’t see the benefit – Can anyone shed light on this. Seems awfully restrictive.
Cheers,
GregRP Data and similar companies buy their info under contract from the relevant state department which records land sales, collects stamp duties and title info. In Vic this is the Department of Justice under the State Revenue Office, Land Titles etc.
Now these agencies will commonly take a few weeks to process things but most of the delay often comes from the banks. They can take months to make the necessary changes to a title (I mean months after settlement).
In a rapidly rising market figures from companies like these are not as useful as your own research when determining actual property prices.
Cheers,
GregHi Terryw!
I am not sure I would agree that Ed Burton charges a lot for his trusts. You could probably buy one from ebay for $39, but would you?
My point is that quality is far more important than price. You might think you are saving a hundred dollars by going to your local suburban accountant (who does not specialise) – but when you find yourself served with a subpoena you might wish you spent a little extra. The decision to save $100 might end up costing you many hundreds of thousands in accumulated assets (Not to mention stress, lost sleep and a broken marriage).
Keep in mind that while you might get a quote from an accountant for your trust it may not be all inclusive. You will probably end up paying extra when you factor in Stamp Duty (most states) and extra time costs (eg registering for ABN, GST etc)
Eds trusts are also very designed to be as flexible as possible. NOT all trust deeds are equal. As Dale mentions in his book some deeds contain restrictions either by intention or omission.
Cheers,
GregOriginally posted by GreatPig:Profiteer,
losses incurred by property owned by the trust could not be offset against our personal income but can be offset against any future income made by the trustYes, but there are issues with trust losses. To carry forward trust losses the trust has to make a family trust election, which has certain consequences in relation to who the trust can distribute to at concessional tax rates.
Hi GreatPig!
You lost me when you mentioned family trust elections. If I have a standard discretionary trust (which is not a family trust) is there anything I have to do in order to carry forward a loss into a future financial year?
Cheers,
GregNice work Foundation and its good to see this thread has progressed despite nearly being chopped off at the knees early by the regular hardhitters.
I have to agree with Foundation that there has been many more forces at work than the infinetly measurable population flows which so many research firms earn big money by producing.
The items in my list aren’t all as sexy as pretty maps with arrows showing population flows, nor can you charge large fees for observing such obvious things – but in my opinion these following factors have all contributed to the recent rise in property prices.
1. The 1999 CGT discount for assets held longer than 12 months.
2. Bracket creep forcing more and more ordinary PAYG employees into paying taxes at higher marginal rates and thereby encouraging them to seek tax relief through negative gearing.
3. The $7000 Federal Governments First Home Owner Grant scheme.
4. Near record levels of employment.
5. The ill fated stock market Tech Wreck.
6. September 11 had a profound impact around the world and left many seeking security – of which property has long been regarded the highest form.
7a. The good old baby boomers seeking security in retirement and investing heavily in all asset classes.
7b. Many baby boomers having surplus income after finally paying off there PPOR mortgage and choosing to invest part of it in property.
8. More aggressive lending policies from banks.
9. The widespread introduction of mortgage brokers – which alowed people to more accurately ascertain the maximum amount they could borrow.
10. Last in my list, but certainly not least, very low interest rates.I am sure I have missed a few. But these forces all combined over the recent boom to push house prices further and faster than most anticipated.
Now if only I had a crystal ball to see them coming.
Hi Domo!
Ring up a few PM in your town and tell them you are thinking of moving out there soon due work oppurtunities and tell you need a 4 bedroom house with garage etc (Whatever your house has) and then ask them what they think that you will have to pay in rent for a house like that…
Do the same thing for all the agents and you should have a fairly unbiased idea of what rent you can expect…
I have found that when RE agencies provide rent valuations for lenders they more often than not under quote – as they do not want to put anything in writing that they can not easily achieve and justify should something hit the fan later on.
My brother rang me the other day to ask me about a deal an agent had told him about.
A builder had two display homes that he had built and was now selling. The headline on the deal was the builder wanted to lease them back for 3 years and pay a whopping $30,000 pa rent. This area averages more like $12,000pa.
Sounds good until you looked at the purchase price which was about $100,000 more than a comparable house in the suburb. But hey if you want +ve cashflow I can give you the number! [biggrin]
Cheers,
GregHi Piper!
Tony Cordato is a lawyer in Sydney who understands lease options and wraps. I got this number out of the white pages so it should do the trick…(02) 9290 2773
Cheers,
GregHi frodob!
Tony Cordato is a lawyer in Sydney who understands lease options and wraps and I am guessing it would be worth your time talking to him about assiging contracts also – I got this number out of the white pages so it should do the trick…(02) 9290 2773
Cheers,
GregHi geo!
Yeah I forgot I had that name tag on until I arrived home! I thought it was a great night – got some valuable information and had a good chat too. Would have liked to have caught up.
I think Lewis does a great job. I have dealt with other solicitors and he is head and shoulders above the rest, in regards, to knowledge, attitude, and service.
Cheers,
GregYes they do check and the penalties are fierce! Have you read the FHOG Act? (It is quite short)
I think the investigators get most of their leads from tip offs. You never know when your brother is going to get divorced from his wife… She may want to cause the family some pain.
In my opinion I would not try and dupe the government. They make and police the rules – so they can steam roll you if they want to. (Judge, Jury and Executioner!)
Cheers,
GregWhen a friend bought his house for $600k at auction he just gave them an ATM receipt showing his account balance with the promise that he would pay on Monday!
The vendors solicitor would probably have a heart attack if he knew this – but I guess the RE agent just wants to keep things simple so the sale goes through and he gets his commission…
Hi terry.s!
The info was fairly specific to Victoria – the veiw and feedback from Vic Consumer Affairs after a few complaints. On a more national level the UCCC was also discussed. The CD was not from Lewis but from Michael Gruber – who did a presentation on his product LoanAlert. Sorry if I stepped on your toes geo…
Cheers,
Greg.J-Rock beat me to it – That is exactly what I was going to say.
All the people who run around asying put a ‘subject to finance’ clause either don’t fully know what they are talking about or are making a generalisation.
Don’t let the agent write the clause on the contract – get the clauses sent from your solicitor… Then have the agent photo copy the fax, cut out the conditions and paste them onto the contract.
Assuming you have a competent solicitor and have clearly communicated what you want to him then you will NEVER have a problem with agents giving you their legal opinion on the worth of a condition.
Cheers,
GregIsn’t BHP due to close its last mine and end all its activities in Broken Hill sometime during 2006? I am not sure of that date – but none the less this should be of concern to anyone who is considering a purchase here…
Might just have a small impact on employment levels!
Cheers,
GregHi dangermouse99!
Make sure you spend adequate time finding a good one if you intend to buy multiple properties… The first thing is make sure they return your calls promptly and also are interested in taking the time to find out what you want both now and in the future. You don’t want a loan – you want a planned borrowing strategy that dovetails with your goals and circumstances.
Too many mortgage brokers only want to sign you up and drop you like a hot potatoe when they have their commission… Also keep a record of every conversaion you have with them and get everything in writing – do NOT trust them… They are not working for you – They are working for themselves… A mortgage broker gets paid when you sign the appropriate forms – some of them will pressure you when it may not be in your best interests…
I think Confucius said it best “An unscrupulous mortgage broker will cause a thousand headaches and cost untold fortunes”
Hi dan_col!
You can have a clause added to the contracts that allows the purchaser (leasee) to have access to view your banks loan account. They are not allowed access the account – but they can request the balance etc.
Or you can just give them a copy of the loan statement every six months… I personally think you should do this even if they don’t ask for it as it shows you are upfront and honest – which should help you get the deal over the line.
Cheers,
GregHi Guys!
It is a shame our name tags did not have our PI aliases on them as well… I would have come over for a chat if I had known you were there too…
Next time!
Cheers,
GregHi geo!
Another benefit is wrap purchasers in Victoria do not need to cough up stamp duty when they move in – only when they refinance. So they can maybe borrow this from the bank as.
So for a house worth $200k you would need about $29k straight off the bat just to get in (assuming you can get a bank loan) With a wrap you can get in today for much much less.
For some people it is as much about not being a tenant rather than the money. Imagine being tipped out of your rented house twice in one year because it is being sold.
One guy I spoke to just wanted to build a cubby house and sandpit for his little girls. How do you calculate that?
Some people value other things much higher than money…
Cheers,
GregHi freedom3!
I went to a seminar by them in Nov 2002. They have stopped doing seminars now but I think you can purchase a seminar they recorded on DVD – but hurry because there are only 47 still available…. (brrrrr I hate marketing lies!) Anyway their seminar was great and they are very knowledgable. They walk the talk – being active developers and property investors – and gave specific advice not just airy fairy concepts like some (american) presenters tend to do.
Some people say seminars are a waste of money but the funny thing is I look at this one as saving me a packet… I was young and brash and about to jump head first, guns blazing, into a booming property market with absolutely no clue about anything.
They pressed very hard on education and knowledge and like Steve McKnight they are very risk adverse. They fully analyse any deal before proceeding and go to great lengths to mitigate all identified risks before making a decision.
You could do a lot worse than learn from them they were very trong on ethics too and a lot of people have gone on to use the knowledge to make big bucks all around the country.
Do a search on this site and other forums to find out more and remember to take everyones advice for what it is worth – including mine [biggrin]
Cheers,
Greg
