No, not at all, Russ. I agree that someone looking for JV’s is probably not a charlatan- I didn’t mean to imply such a thing. Re people being burnt, well, I have never been burnt financially, so I was not being personal about it.

Trust is a good thing, indeed. But I think you’d agree that money is incredibly important, and for those who don’t have much, it may mean the difference between no food and some food on the table. My main message was for people to choose carefully what they do with their money. I hope you’d agree with that fundamental message.

I like safeguards when dealing with money. People are asking all the time about financial planners being registered, and being worried about losing their money. That doesn’t mean they mistrust people- it’s just about due diligence.

I don’t think reminding people to exercise due caution is cynical. Nor were my messages to you trying to deny you financial success. I think we are all on here because we have an interest in investing. To me, that also means discussing the pro’s and cons of what is available to us. I know that people disagree with many things I have to say, and that’s good- I welcome it, because it means I may see a different perspective.

kay henry

Bruce,

Thanks for your reply I am not sure what other people’s politics are really, unless they declare them. As for me, I do enjoy discussion on a variey of topics, real estate investment being merely one of them. I know that I am not an “intellectual elite” and nor are my firends and family, but we do have discussions on the things you’ve mentioned all the time. People usually discuss things that are important to them. I don’t see that those topics are in the intellectual domain. I just see they’re topics of value to us all.

Regarding lifestyle, yes, every individual on the planet has one and they do vary. I am always just pleased to see people enjoying their lives- beingin good relationships, having a calm and peaceful mind. If you’re happy with your lifestyle, Bruce, then I’m happy for you )

kay henry

Robo,

Very good advice from PurpleKiss (as usual) It’s a real pity ythat the former owners didn;t reno it by including a bath- particularly given that there are 2 showers! [jealous]

When going to buy a place, it is probably the first questoin I ask- “does it have a bath?” For me, it’s an emotional thing. I lived in a (rented) house for 12 years with no bath, and we all felt a bit sad about it. Moving to my new place, one of the best things about it was the bath! Not that I ever have one, but it’s still there Renters, will, of course, take your house with no bath probably as easily as they would take one with a bath, if the features of the house are nice. But it might be worthwhile you chucking a bath into one of the shower rooms, just to appease yourself.

kay henry

Cil,

I think we’re looking at it differently than some. I’m like you- strive to be a good person (but don’t strive so hard that it becomes boring!!) For me, financial goal-setting etc is not so much the way my head works. I don’t see life as an accumulation of wealth. I just think that’s another fun part of life. But so is love, and work, and golf, and having a picnic [blush2]
And I don’t have to write those things down to do them. I live life day to day, mosey along, and always try to have fun. And writing down goals doesn’t assist serviceability. I could write down about having the ferrari and living on the north shore. But really, what I want is what I have mentioned above- simple things, happy things.

Oh, and Bruce, you said:

“I like to walk a middle ground between being tolerant, but aware of the benefits of a well considered morality. To me, there are many loud voices pushing open slather, extreme lefties often condemn traditional morality and values”

That doesn’t sound very “tolerant” hehe. I believe, for example, that looking up children of assylum-seekers is not hugely moral- and the legality of it- well, it only happens in Australia, and is not legal anywhere else in the world. I don’t really use the word “moral” but I do believe I have very strong “principles”. I go further than the word “tolerance” and believe in “acceptance”. On this board, one sees a variety of opinions and choices and lifestyles. Your goal-setting might be very different to mine, but you’re entitled to it, and I acept that

kay henry

ok Monopoly, I’ll go there

It depends on so many variables. Whilst there might be a couple with a child, both parents could be working (3 of my colleagues have young babies and work full-time in professional jobs as do their husbands). I don’t know of that many women who are staying at home looking after babies these days, so I guess if it wee me watching the couple, I would probably assume that both partners were working. It depends on the house too, and if it was in an urban area (city) during the boom. Then, I would think if they were at such an auction, that both of them probably had professional jobs. Of course, I would only be making assumptions about this. Just as you have painted them as possibly being financially disadvantaged, I might see them as financially advantaged- as I said, it depends on so many variables. Using my colleagues as an example, between them and their hubbies, they’d be on at least 140k- that is much more than I am on!!

So if it were me bidding at an auction (which I’d never do because I’d freak out and lose control and make my bids at 100k intervals because I’d lose control [withstupid] I would position myself in relation to them. I work my finances on my own. I have no financial help (maybe they do? with their parents or something? Many people have that kind of support) and so I am completely responsible for the choices I make. I would not necessarily imagine that I am better off financially than they are. As such, I wouldn;t necessarily allow them to get the house.

But if you think that the baby and wife thing DO get a sympathy vote, then maybe I should go to an auction with my teddybear wrapped in swaddling clothes, and put him in a pram, and go for that “single mother with a baby(bear)” look, and knock out all the other potential purchasers :o)))

It’s a really different world than the 1950’s. Women are working now, and I don’t see a young family as necessarily financially disadvantaged. Even if the mum is home with the child now, I believe she would have the ability to return to work some time or resume her old job when the little one is a bit older.

Again, it all depends on how you see the world.

kay henry

I’d like to refer back to my original question, about the il/legality of having in one’s possession the work of an author that one has not paid for.

The Copyright act of Australia states that one is able to copy 10 percent or 1 chapter of a book- legally. Having in one’s possession the work of another is not illegal. People may gift books to another, may loan, or may drop it on the street! I remember when I moved to sydney, I had to give away hundreds of books, and I put them in a dumpster charity site. I gave away heaps of records too. Am I in breach of copyright or is the recipient? Absolutely not! God, who hasn;t roamed a second-hand book or record store? would say if you haven’t, that you are the poorer for not having done so- they’re fun [biggrin]

So the question is not a moral one- it’s a legal one. I stand by saying that Naive_metal has not done anything wrong by having Steve’s document in his hands. It was obvoiusly a gift from a friend. People might also note that Native’s original post was very respectful. Fact is, he is not in breach of copyright.

I don’t know why people have to personalise this so much. Native was not attacking or undermining Steve. He came across a resource and asked questions about it. I don’t understand the controversy.

kay henry

Cel,

A reply to your queries about depreciation. Say you have one house with depreciation of 5k. That will reduce your taxable income. So say you were earning 70k. You would be paying 47 cents in the dollar ONLY in that 5k above 62k. So your new taxable income would be now 65k. So you would get back 47 cents in the dollar for the 5k you had reduced your taxable income by (approx 2700 back)

Now if you multiply that… And you had 3 houses @ 5k depreciation each, your taxable income would be 55k. If you had ten houses @ 5k depreciation, your taxable income would be 20k. You would then fall into one of the lowest taxation categories. You would get a tax return of many many thousands.

I do not agree with Steve’s tip about being in trouble if you have to rely on depreciation/tax breaks… as a person who earns a reasonable income, I do enjoy the tax breaks I get. I would rather receive 15k back from tax than nothing. for low income earners, tax breaks might not mean much. Also, if you buy very old houses, you might not be able to receive much back in depreciation (although you can ask Chan about depreciation- he depreciates all his places- no matter what the age of them, and he says it is hugely worthwhile). Remember, that if you buy a place that is post 1987, you can receive a 2.5% depreciation allowance on the cost of the building. But depreciation (fixtures and fittings) will work even for pre-1985 0r 1987 buildings.

If you are a high income earner, you will be seeking tax breaks. It’s why RE is so incredibly popular- because we achieve huge tax breaks. It’s also why I have no issue with neg gearing, because the tenant, the tax dude and me pay for it- just like I’ve always done ))

15k tax return is a good deposit on a new place- and you can get that every year- but ya might have to get together quite a portfolio to do so [guilty] If you have a positively geared portfolio, and you were earning say $20 (clear) a week X 10 properties, you would be earning 10k from them. So you would be paying tax on the 10k each year. If you were in the top tax bracket, you would have to pay about 4k back to the tax guy. That’s presuming your houses were really old and you decided not to depreciate them (400 bucks on a QS (X 10 properties = 4000 bucks) can add up and eat into your profits.

It’s really a numbers game, and I think newer properties, with depreciation allowances, for high income earners, can absolutely provide a positive outcome.

When people talk about making a profit on RE- as in pozz gearing- it really depends on the individual’s circumstances. $20 profit a week per property can become $12 a week after tax. That’s enough to buy a gourmet sandwich and a milkshake. Using tax is an equally viable way to build wealth. I think some people see neg gearing (growth properties) as only useful when you sell- thereby realising the CG. Not so- each year you get back some of the pofits on your losses!! [happy3]

kay henry

kimcath,

The unit at toowoomba seems a pretty decent price and the rental yield isn’t too bad (from MY perspective) [snitch] 3-bedroom units will always have more of a tendency to growth than lesser sized units. And toowoomba is a big growth area right now. Sounds like a sensible deal

With regards to units I’m sure you’re aware that some people prefer to buy houses, because of the land value, whereas you just don’t get the intrinsic land value with the shared land distribution of units. Many people think that itis in fact the land which appreciates in value more so than the building, and this is probably historically true (hence people paying 700k for a house and land in sydney and then knocking down the house- because it was the land they wanted, not the building on the land).

One of the benefits in buying a unit, is that if something goes wrong with the roof, or the pipes, or some other structural area, the body corporate pays. Of course, you pay body corporate fees (tax deductible), but I remember when me and my friends first bought properties, she bought a house and I bought a unit, and then she had to pay 10k to get a new roof- that was ten years ago, and I would never have been in a similar situation having a unit. Then again, it is possible that you may at some point have to pay a “special levy” to get some major work undertaken. That can occur, but it depends on how the BC is managed. You can check out if there is some proposed special levy by checking out past BC papers. You might also want to check out how much money is in the sinking/admin fee of the BC. I have had a place where there was 3k in the funds (too low and not enough maintenance done on the block) and have a place where there is 100k sitting in the funds, so you might want to check that out.

RE fees, I always make sure that BC fees are under $1000 per annum. You will find some places where they have, for example, a pool and a lift, gym, etc. The maintenance fees on those items can be horrifying. There are some places which have about 4k annual BC fees. That’s 80 a week you’re paying so your tenant can swim around and use the lifts instead of walk- hehe. I go for very low maintenance units with no flashy stuff- basically, because they are heaper to maintain. Also, with gyms, there can be special levies to replace all the equipment every few years- so check that out too.

Best of luck with it all, kimcath.

kay henry

Bionic,

Inflation is lower than it has been for 4 years (since the inception of the GST, where inflation, as measured by CPI came in at 6%!!). The annual inflation rate came in this week at 2%. That is in the bottom range of the Reserve Bank’s target of 2-3% inflation.

Where does your prediction of rampaging inflation come from?

kay henry

Kiwi,

You said:

“If there are 6.5%(approx 887,250) of the total 70%(approx 13.65 Million) Austrailan property owners that are investors… and only 0.5% (approx 68,250) own 3 or more Investment properties…. how important do you think the 0.5% value personal education to acheive thier goals?”

That is a REALLY old statistic. I read the other day that something like 18% of australians own 3 investment properties (not .5%). I’ll try to find where I read that, but I think the overuse of that very old statistic (from the 91 or 96 census) presents a false consciousness of where we as investors are right now. Basically, it’s not as elite as it used to be to own 3 IP’s- every man and his dog does.

kay henry