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Viewing 16 posts - 1 through 16 (of 16 total)
  • Profile photo of harryandlloydharryandlloyd
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    March 15, 2014 - 12:28 am

    Thanks Benny!

    We have a Depreciation Schedule for the IP, so I'll be sure to add the WDV to my list  immediately!

    Kind Regards

    Kate

    Profile photo of harryandlloydharryandlloyd
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    July 15, 2011 - 1:23 pm

    Aaah Jamie – looks like you caught me red handed! I was going to PM you about this then thought you'd probably enjoy a few weeks reprieve from myself and Mark!!
    Does anything get past your eagle eye in these forums!?

    Thanks for all your help by the way – it would be no IP without you! 

    Cheers
    Kate

    Profile photo of harryandlloydharryandlloyd
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    July 15, 2011 - 4:00 am

    Hi Terry,

    I figured it would be the same, but thought a post would clarify.
    You can see my Investor L Plates a mile away!!!

    Cheers
    Kate

    Profile photo of harryandlloydharryandlloyd
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    June 12, 2011 - 6:06 am

    Hi EmptyVessel,

    My partner and I are about to dive head first into a purchase of our first IP(s) which coincidentally is 2 villas on one (torrens) title.
    The property is in Mudgee NSW and our stratgey is based on a buy and hold period of 10 years, after which we would consider perhaps selling one and keeping the other.
    Firstly, thanks for the information so far as well as useful links – I can see this becoming bed time reading in the near future!
    Secondly, have you found any information with regard to costs associated in changing a title from a torrens to strata? We were quoted approx $10-15K (yelp!) by the local real estate agent although I suspect she hadn't the faintest idea….
    Would this cost be a tax deduction?

    Kate
    Your

    Profile photo of harryandlloydharryandlloyd
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    May 13, 2011 - 3:46 pm

    My only regret is that I didn't find this website aaaaaaaaaages ago!
    It is such a relief to find an environment in which all oddball questions are answered with integrity and shared knowledge – regardless of  how many times those 'same old questions' have been asked!!

    Profile photo of harryandlloydharryandlloyd
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    May 12, 2011 - 8:53 pm

    Now I GET IT!! Thanks JacM for explaining this in laymans terms with examples – I'm seeing the investment light!

    May I ask another naive question?

     If one were to have a negatively geared IP, can one apply for the 221D tax variation form and place that extra weekly income in the offset account? If so, are there any implications from a  tax perspective?

    Am looking at purchasing my first IP soon which will be negatively geared for initial years – even less if I can make it possible! My wage will be able to cover the approximate $100 shortfall (IO loan repayment $400 – weekly rent $300). After paying PPOR mortgage + personal loan + $100 for Interest Only IP loan I will be left with approx $320 to cover utlities, groceries,  etc. Would a 221D application be prudent or is it horses for courses (ie. extra income weekly as opposed to tax refund at end of year?).
    Your thoughts (and examples!) would be most helpful!

    Kind Regards
    Kate

    Profile photo of harryandlloydharryandlloyd
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    May 11, 2011 - 5:10 pm

    Thank you v8ghia for your lengthy and extremely valuable reply – all this is new to me so you have answered many (and probably silly!) questions I had with regards to IPs!

    Kind Regards
    Kate

    Profile photo of harryandlloydharryandlloyd
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    May 11, 2011 - 11:10 am

    Hi v8ghia,

    The valuation was not what I was expecting for the main reason being the major renovations ($$$) that we have undertaken in the last 2yrs – new hardwood flooring, gyprock ceiling, fully integrated kitchen, miscellaneous sundries like paint, snazzy light switches, lights etc etc., new bathroom which was completely gutted and built from scratch as well as a new laundry. Recent comparative sales in our area are unfortunately much less (more like 300k) and it was noted on our bank valuation that the price was based on that fact that there were no other houses to compare it to….which I read as the best house in the worst street!?

    Wow! A major banking charging thousands less for LMI?! I never would have known! I held accounts with a CU for many years and got sick of sundry fees and high interest rates (along with the 'it's all about you' and 'we put you first' bollocks). The Greater have been…well, really great to deal with so I have never thought to look for greener pastures, thanks for the tip!

    And just to confirm…LMI is tax deductible? I assumed because it formed a part (although I'm not really sure what part exactly?) of my capital that it wouldn't be?! I am truly greatful (and SO naive!) for all this information!

    Finally, boyfriend was hoping for 300k…I went with the 'but there are no real estate fees involved here, honey' approach and 290k was the best I could get – besides I believe it's worth that amount anyway. Maybe I should give the incessant battering of eyelids approach a shot?!

    Kind Regards
    Kate

    Profile photo of harryandlloydharryandlloyd
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    May 11, 2011 - 6:51 am

    Thanks for such swift replies!

    My boyfriend is selling the property to me for $290k, although I don't think at a 10k reduction (from 300k) that this wold greatly affect my banks LMI regulations?! And if I call the bank again today, I'm pretty sure they'll black ban me as a serial pest!!

    Angel – The thought of borrowing the shortfall had crossed my mind, but I am hoping to keep this transaction purely 'business'. The idea of borrowing money from him – or anyone for that matter – does not sit well with me and I would worry, worry, worry and spend sleepless nights about being in such a position.

    Richard – Lenders that do not charge LMI at an LVR of 85%?! Where do I find one of these? This sounds a little more enticing given my current predicament!! My PPOR is with the Greater Building Society and my application for my IP loan was through them as well with an interest rate of 6.94% which I thought was competitive given current market. I would sleep better at night with this option!

    Pascoe – I agree with you too, knuckle down and get my LVR below 80% but if only I had the patience of a saint! Given Bathurst's current population and industry growth the initial cost of LMI vs Investment property gain is another aspect I guess I need to consider! My bank told me to speak to my accountant (hmmm…a little difficult considering I do not have one at the moment!) to weigh up options – so naturally I came straight to this forum for some help!

    Thank you again for the advice and sound replies – I would be at a complete loss without this forum!! Just goes to show that there is always a Plan B….or Plan C…or Plan D if Plan A doesn't come to fruition!!

    Kind Regards
    Kate

    Profile photo of harryandlloydharryandlloyd
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    May 3, 2011 - 7:20 pm

    <font color=”#000000″>Feel compelled to add my two cents to this post given my FHC with Chan and Naylor two weeks ago at their Surry Hills office.

    I bought a copy of 'How to Legally Reduce your Tax' by C&N and was quite intrigued about trust structures and the benefits that result if one changes their mindset from a 'pawn' to a 'player' in the game of tax.

    My 2.5hr session focused on income streams, tax flexibilty, asset protection and estate planning and it took me those whole 2.5hrs, the walk back to my hotel and an additional 2 weeks of solid googling, print research and further professional advice (thankfully free!) to comprehend the pros and cons of investing via a trust structure.

    My laymans advice is this: Seriously consider your circumstance!

    ie. life stage,

    employment type and status (employee/employer? cleaner/surgeon?),

    short and long term investment goals and

    family planning before diving into the unknown purely on the advice of an industry salesman…a-hem, I mean professional!

    I am 32, single, an employee and have (due to circumstance) no children, now or in the future.

    I am purchasing my first IP – as an individual – in the coming weeks and will review my structure should I acquire more properties in the future. 

    Quite frankly, I wish I had found this site (especially the forums!) and committed myself to more diligent research before parting company with $395 clams. Oh how I live and learn!

    Regards

    Kate</font>

    Profile photo of harryandlloydharryandlloyd
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    May 2, 2011 - 6:38 am

    Hi Amy,

    Actually, I checked through your threads after my post and noticed you are in a similar situation to mine – with no accountant too! Would love to hear how your accountant in Sydney fares as I need all the (right) help I can get!
    I am heavily leaning towards the IP in my name – considering it is my first venture into investing and given my particular circumstances….I would love an IP2 and an IP3, IP4, IP5 in years to come so I will analyse my 'business strategy' at each step.

    I can't believe you friends have moved to Cowra for accomm!! That's SO FAR AWAY!! I will keep you as a contact and will let you know if partner decides in Blayney/Millthorpe!

    Thank you for your advice and assistance!
    Much appreciated from a first time novice!!

    Kate

    Profile photo of harryandlloydharryandlloyd
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    May 2, 2011 - 2:54 am

    Thank you all for such sound and well researched advice! I'm so glad I found this website!

    I agree with amyhunz, I think to fly soley on the coat tails of the mining industry cuts out many other well paid professions that also reside in this area, so I'm in a quandry as to whether I buy and furnish or buy and lease (btw am looking at buying boyfriend's house in Bathurst – from his profit he is looking at houses in Blayney/Millthorpe to cater to mining market and 'McPhillamy's mine'….if that ever goes ahead?!

    Now that I have some extremely well qualified people in this forum post, now might be the opportune time to ask some naive questions considering I'm a first time investor!

    Road to first IP so far….

    *Financial Health Check with Chan and Naylor – suggested Property Investment/Hybrid trust for asset protection, estate planning etc.  Have I been suckered in?

    * I'm an electrician for a manufacturing company, do not work in a litigable environment and have no aspirations to own a company – do I need asset protection? Due to circumstances, children are not part of my future so estate planning seems somewhat futile to me?

    * Bank is currently waiting on an answer to foward approval because they need to value my PPOR either in my name or trusts name? I don't want the hold up, nor do I want to extra costs incurred in establishing a trust in the first place!

    What advice can you guys impart?

    amyhunz – do you have an accountant in this area that you'd recommend? Are you're IP's positive or negative geared?H.E.L.P!!!

    Thanks

    Kate

    Profile photo of harryandlloydharryandlloyd
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    May 1, 2011 - 9:59 pm

    Thanks for the additional post thecrest.

    I called an engineering company in Orange last week re houses for miners and was told they needed 16 homes immediately! Fully furnished, serviced weekly etc etc BUT she only wanted properties in Orange due to their clause agreement.
    Would you suggest not even bothering with a Real Estate property manager? This is my first investment property and I would be a little nervous in establishing my own contract agreement….and then hoping they pay weekly etc etc. I can't say no to the mormons, so i would be hopeless in trying to claim monies owed!!
    I was thinking of taking photos of the property along with a detailed description of the home and emailing this to the HR departments at the Uni, manufacturing companies and mining companies? Or should I try the paper as you suggest?
    Any further advice would be greatly appreciated!!

    Thanks
    Kate

    Profile photo of harryandlloydharryandlloyd
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    May 1, 2011 - 9:41 am

    Hi Patrick,

    I was hoping for a positive cash flow with corporate tenants (if I can get some more mining contacts!), will keep you posted on my progress!

    Kate

    Profile photo of harryandlloydharryandlloyd
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    May 1, 2011 - 7:18 am

    Hi folks,

    Just saw this post and thought I'd add my two cents..being a life long Bathurst resident and all!

    Patrick was correct about uni, weather, importance of insulation, heating and cooling. I can't emphasise enough that Kelso is one suburb you should avoid – personally, I would never buy a property on the Sydney side of the Macquarie River.

    Kelso is home to drugs, scrappy houses, scrappy tenants, dole bludgers and all those young 15 year old mothers you see with 3 children hanging off their hips happy that each newborn has added another $5000 for their cigarettes and playstations. Call me a snob, but i say it as I see it!

    With the creation and expansion of Newcrest gold mine in Orange, corporate mining companies have all but taken rental properties in this town (Orange) and are commanding extremely high prices for furnished dwellings eg. $750/w for a fully furnished 3br home.

    Bathurst is experiencing an influx of miners too, however we are also seeing lots of people who work in Orange NOW living in Bathurst because the mines have taken ordinary people out of the rental market. My neighbour is a teacher in Orange and could no longer afford to rent there last year so she moved to Bathurst and commutes every day.

    Bathurst just recently (and very quietly mind you!) superceded Orange in population (40'000) and the town is currently undergoing somewhat of a 'facial' reconstruction thanks by and large to a very wealthy local commercial property developer.

    I am buying my first investment property in the coming weeks and I have chosen to stay focused in Bathurst – coal mines in Lithgow, gold mines in Orange, multiple manufacturing plants (Mars Petfood, Simplot, Devro and Nestle in Blayney) are right on our doorstep and no one seems to have a problem commuting if they work outside of the town, like I do.

    The university has just opened a dental faculty and in the coming years a private hospital is also planned for the site. There are 4 public and 4 catholic primary schools, 2 public  and 4 catholic/private high schools and there is word that more will be built in the near future.

    I am more than happy to answer any questions – even if I do sound a little biased!!

    Profile photo of harryandlloydharryandlloyd
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    April 26, 2011 - 7:30 am

    Hi Madchen,

    Not sure about Vacancy Rate websites (although Domain and Real Estate sites have other handy statistics), but 'Your Investment Property' magazine has a section in the back filled with stats like vacancy rates, stock on market and property price guides for houses and units in all states and territories. I bought my first copy on Sunday and must say that as a first time investor myself, I am very impressed with data…especially for us novices!!
    BTW current vacancy rate for Kangaroo Point (4169):
    Feb 10 vacancies = 72, Feb 10 Vacancy Rate % = 1.7
    Feb 11 vacancies = 43, Feb 11 Vacancy Rate % = 1.0

    Hope this helps!!
    Kathryn :)

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