Forum Replies Created
Yes, I’ve read the book too, and Ollie’s other ones ie “Lost Property”, and “The Rascal’s Guide to Real Estate”.
The Day the Bubble Burst is a follow on from “The Rascal’s Guide…”.
Both could be described as: Humorous, with a few gems, but rather lacking in substance. Ollie is own biggest fan, and it shows.
Julian2
Don’t forget stamp duty and cgt when working out for yourself which way is the best way to go. Personally I would develop the block of land. Borrow against the land to build on it, and if nec keep borrowing against the improved value as you go. The learning experience alone will make it all worthwhile.
If you sell the land you will have to pay cgt on the sale and then stamp duty on the next purchase.
Develop and rent out and you won’t have either.
Julian.Hi Coast,
Many thanks for your comprehensive response. I’ve bought an executive lakeside place in a tourist town in New Zealand. It lends itself to home-and-income and I am figuring on holiday letting for the perceived higher returns. I think I will give it a go. Being on hand I can self manage most it of the time (when I’m there), so that may aleviate some of the issues you mentioned.
It seems strange that this method of extracting more income from investments doesn’t receive more air time.
JulianBig Rob,
Oops, I must have been tired.
Julian2Obiwan,
Interesting ramblings, but what point are you trying to make? And what the %@#& are “exogenous limits”? Sounds to me like you should cut back on the late nights and introspective belly-button gazing.
Julian2Crusader1,
It is important that you familiarise yourself with the Deed of Lease as that spells out all the rules as they apply to your contract.
Generally the tenant has to give a minimum of three months notice if they are going to renew their lease (well that’s the case in NZ). Get that in writing from the tenant, and don’t have them use words such as “intend to renew” which is unenforceable. Have them put in writing something to the effect of, “Under the terms of the Deed of Lease xyz exercises its right of renewal”, and have it dated and signed by all the signatories to the lease.
Then conduct the rent review.
Best wishes
Julian2I don’t think anyone should be concerned. Kiwis have been coming to Australia for years and take Aussie jobs in large numbers so pushing up prices in NZ is pay-back!!!Mortgage Adviser
No-one is concerned!!! Australia and NZ have had reciprical agreements for years – it’s great!
But as for foreign people taking jobs, would you suggest that all the non-Aboriginal inhabitants of Australia have taken something from Australia …or have they added something to it?Australia (and New Zealand) are richer for their cultural diversity – socially and economically.
We are great neighbours and we have more in common with each other than with most other nations. The idea that there are only so many jobs and that any new arrivals are likely to take them off the locals is a theory that has been discredited years ago. Economies grow as populations grow.
Julian2This is one of the reasons I stick with commercial property. Both parties sign a lease and both parties treat the lease as binding. Personally I think any landlord that wants to change a lease should be shot in the eye – and the same should apply to tenants. What is the point of having a lease if no-one wants to stick to it if their circumstances change? That is the point of having an agreement. I don’t care if either party is dying – if it’s an agreement it’s an agreement. Death should be the only excuse for breaking it.
Julian2I’ve spent quite a few thousands on seminars over the years and I am of the opinion that generally they advance the cause of the person(s) conducting the seminar a lot more than the attendee. The exception can be when you are attnding a seminar to learn about a specific specialised skill. Mind you there are lots of good books out there, and there are lots of good organisations worth joining.
Don’t even consider attending a seminar unless there are some specific tools or knowledge you expect to pick up.
Keep reading this forum, and keep asking lots of questions and before you fork out a good chunk of a deposit on a seminar remember that, well …it is a good chunk of a deposit.
Julian2Jenny,
I recommend you pick up a copy of Steve’s latest book and read it from cover to cover.
No-one can say whether you are likely to continue with your capital gains or not – that is up to Mr Market.
Mr Market might decide that your property is going to keep on going up or he might decide you’re in for a 20% dip.
At the end of the day it’s up to you. Do you take the profit and put it to work, or do you leave the investment alone and hope it keeps going up.
As the property isn’t putting cash in your pocket, and as 50%pa gains aren’t sustainable I would be tempted to take the money and run. But then again I don’t know the property.
Julian2Anne,
The question is not whether anyone else thinks this to be a good deal, but rather, do you think it to be a good deal?
How does it work for you? Does it put you ahead or behind? What are the costs of taking on this deal? How much deposit are you putting in? What is likely to happen after the three year period? Is the current yield sustainable? What is the area like? Is it growing?
These questions you should answer to yourself.
Of itself an 8% nett return is deemed pretty reasonable (by many) these days – but that isn’t to say it advances your cause. Only you know what you are trying to achieve. And what you are trying to achieve is based on your own personal circumstances. What you have asked is a bit like someone asking, “Toyotas are running a special and they are all 10% off – is this a good deal, and should I buy one? Who can say, unless they know all of your personal details – and even then they might not know you, and what you want.
Good on you for asking though, and best wishes with your investing future.Julian2
PS As for the Toyota, I would recommend you save a little longer and get yourself a Porsche.
Even my Ferarri has her little foibles. I call them character traits. Mind you, if, no matter how much time and effort I put into her, I couldn’t get her fired up I think I’d be on the lookout for a Lambo.
Julian2Steve,
Native_Metal has a point. “Gross Cashflow” would have been a better term than “Gross Positive Cashflow”.
Positive Cashflow implies the money left in the backpocket after expenses like those mentioned, and this would have been of some benefit to readers as it would have indicated how close the mappers were to retiring off residual income.
The “Gross” could be interpreted as “Before Taxes”.
However you did provide a glossary of terms as you meant them.
Again, what a fantastic effort offering the MAP.
I am in awe of the mappers achievments, both personal and financial.
If ever a book has given me a good hard kick in the bum this has been it!!! Well done.
Julian2
TimTam
I’m sorry for you if you seriously think that way, and hope that your outlook will change… as ‘trading’ partners because they don’t follow you like a shadow in your thoughts in every way can lead to a lonely life later.Do you have some experience with the trading in of partners to be able to comment so authoritatively on the likely outcome?
Julian2Don’t the words “professional” and “paid” mean much the same thing? And if they don’t what would be wrong with having a professional unpaid adviser ie if one’s uncle was a tax specialist but chose not to charge his niece/nephew for the advise he rendered would it be any less worthwhile?
Julian2Hi Queenstowner,
My understanding is that you will have to pay tax on capital gains of your investment properties if they were purchased subsequent to your developing/trading activities and if sold in less than a ten year time span from purchase. The exception could be if your investment properties are held in a trust – but then you don’t really own them as they are held for the benefit of the beneficiaries. If you are one of these beneficiaries and also settlor and trustee it could be deemed to be a sham trust and the IRD is not averse to unwinding these.
An excellent book to pick up is, “A Practical Guide to Taxing Property Transactions” by Roger Thompson and Maurits van den Berg. Publishers: Staples Rodway. Cost: around $90.00 The writers have a legal/accounting/tax background. The writers cite a lot of case law to support their legal interpretations.They site an example (p.502) of a couple who are major shareholders in a development company but who don’t conduct development activities in their own name.
Subsequently they purchase in their own names an investment property for long term rental. They sell this property after seven years. They are then obliged to pay tax on the capital gains associated with this rental property because their major shareholding in a trading/development company has tainted them personally. There are some exceptions and these, I believe, include the principle place of business ie business headquarters rather than the rental properties themselves, and the private residence (PPOR).
Check this with your accountant. If you can find information to contradict this I would love to hear it.
Julian2Don’t forget that the best deals are often created rather than found. Pick up Steve’s latest book, $1m in Property in One Year” for some good ideas. In fact become an avid reader of everything and anything to do with property.
Good on you.
Julian2You all seem to go along the line of trying to make it work. That’s okay, but only for so long. If you have a car that continually doesn’t perform you trade it in. There’s thousands more “cars” out there and bound to be plenty that perform to your expectations. The days of spending all your spare time and energy trying to mend your car are over.
Julian2Many of the second tier car rental outfits have nationwide networks and are priced well below the big operators – try RentaDent. Their cars are good (about 5 years old and not dented) and you can drop off in a different location to pick-up.
You might want to try to organise something from Oz first, as this our peak time and it can be difficult getting a car.
Dunedin prices have climbed considerably, but Invercargill (Southland – bottom of the South Island) has some property showing good returns.
Enjoy your time here.
Julian2The free market is a wonderful thing, and don’t forget us Kiwi investors aren’t restricted from buying in Aussie.
Those who own property here (NZ) will mostly have benefited from rising values, but I guess the flip side of this is that those young people wanting to buy their first home have to find ways of coming up with a higher deposit or settle for lesser valued areas.
Don’t forget to have a good look around NZ when you are visiting your properties – it’s mostly tax deductable if it’s business related, and there are tons of good out out-doors activities to stimulate the mind and body. Welcome!!!
Julian2
