Main issue with lowering rent is it will lower the value of the property

This is the formula provided in some of Steve's seminars:

Price = Annual Rent / Yield

Instead of offering a lower rent, it was suggested to offer a rent free period

Main issue I can see is how 'Capital Gains Tax' will be calculated when it comes time to selling

Usually with PPR you can claim 50% CGT if you have held the property for at least 1 year

However, renting out spare bedrooms, may mean that the property is no longer considered 100% PPR

And this could mean you may not be able to claim 50% CGT on the full value of the property

Best to speak to an accountant about this, and about other issues like whether you can claim certain costs and depreciation

Hi Bullet46,

When it comes to renting out a property it is essential to get it right from the start

Once a tenant moves into a property it can be quite difficult to evict them as the Residential Tenancy Act works more in the favor of tenants

Definitely! Without one it will be very difficult to establish or enforce your rights.

The tenant, as they are the one using the water and electricity (But landlord has to pay council rates)

As stated earlier, you need to ensure you get the right tenant from the start

You want a tenant that…

• Will pay the rent on time
• That will be considerate of neighbors
• And that that will look after a property

Hope that helps,

Kong

It depends on what property you are looking at buying.

Residential properties usually require you to be able to service the loan, and thus will place more emphasis on your income and expenses. Some things to note:

• If the entity you are purchasing it is not making sufficient income, you may be able to go as guarantor
• Some lenders will consider rent as income, but only to a certain extent E.g. 80%
• Buying a property outright and then refinancing it to buy other properties will incur financing costs and reduce cashflow, and will not necessarily increase your chances of having a loan approved in comparison to having cash as deposit

With commercial properties, more emphasis is placed on the the income and expenses of the property itself, rather than the individual purchasing it, but in general you need a much higher deposit i.e. 20-30% and interest rates can be higher

• If you had $300,000 in Cash, you could use this as a 20% deposit to buy a $1.5m apartment complex, provided it had good cashflow, and you had the supporting financial documents

InfoChoice has a Online Calculator that you to determine how much money you can borrow, and allows you to alter variables such as the loan term, interest rate, income, and expenses

Agree with Perry there

The AUS$ is not increasing in value or purchasing power, but relative to the US$ appears to be strengthening due to the US$ weakening

I believe the concept many need to grasp is that all fiat currencies are designed to lose purchasing power over time, but the rate at which these currencies depreciate will vary

From what I've read so far on these forums, you should be able to continue to claim the usual deductions associated with owning an Investment Property, provided you charge yourself market rent for use of the property and declare this as income.

This is the email I received on 27/11/12

"Hi David,

Thanks again for your interest in the Passive Income (USA Commercial Property) Fund.

I'm writing with a quick reminder about this Friday's (30th November) 5pm cut off. This is the deadline you need to meet to completed your Fund paperwork and / or payment and still receive the 50% contribution fee discount.

After this date you can still complete your pending application provided I receive the missing information and / or payment by 5pm on 31 December 2012. Please note though, the normal application fee of 3.96% (GST included) applies to applications completed after the 30th November.

Please contact me if you have any questions.

Sincerely,

– Steve McKnight"