Forum Replies Created
Hi JacM,
Only posted my documents to them last Thursday, and I believe they are handling the bulk of the work for me, and it takes time to setup bank accounts, share trading accounts, and register ABN and TFN
As an estimated guideline from the time signed SMSF documentation are received, they've stated that ANZ V2 Plus Bank account can take 1-2 weeks, Commsec Share Trading Account 2-3 weeks, Trustee Role and responsibilities ATO documention 3-4 weeks, and Welcome package 4-6 weeks.
Welcome package will include:
- CommSec account number and information about Commsec Share Trading Account
- ABN and TFN registration notices for SMSF
- Documentation on how to rollover your existing superannuation fund
- An employee standard choice form to enable SMSF to receive employer super contribution
Writing a letter to state the fund is a complying fund, regulated by the tax office, will accept contributions from my employer and that provides details about how contributions can be made seems pretty straight forward to me, but what I am uncertain about is how to word things if I am not the trustee of the SMSF but am the director of the company acting as trustee.
Anyhow, no big deal. I can always resort to contacting eSuper Fund for assistance once I receive and review the contents of the welcome package, or talk to an accountant.
Cheers,
Kong
Was wondering why the site was down for so long, but I guess it was well worth the wait!
Site looks fantastic and is easy to use, and its exciting to get new badges!
Thanks for sharing this Engelo
Look forward to seeing the end product!
Hi Apex_147,
The following website provides a rough outline with regards to the steps involved in purchasing a property
http://www.qccu.com.au/step-step-guide
- Try to get a pre-approval on finance
- Search for property that meet your formula / set criteria
- Inspect the property, and check what fixtures are included with real estate agent
- Make an offer in writing, and real estate agent will organise the 'Disclose to buyer' form and a 'contract of sale' document witha 'warning statement' attached, but consider adding in special conditions such as: 1) subject to building and pest inspection, 2) subject to finance, 3) subject to sale of existing property
- As soon as ontract has been accepted: a) Apply for home loan, b) Contact solicitor to organise conveyancing, c) Organise building and pest inspection, d) Organise home and content insurance
- Transfer documents will be completed by solicitor and you will need to pay Transfer duty
- Settlement – paying the rest of the purchase price
In addition to the above it may be worthwhile to speak to an accountant to see what the best structure to purchase under is, and possibly organise a depreciation schedule
The criterias you've mentioned such as demographics, employment, public amenities etc probably fall into step 2, and depend on what you want to achieve from purchasing the property:
- are you looking for capital growth, lump sum cash or income?
- will this be passive or active?
Hope that helps,
Kong
How much would it cost to install anew carpet, and how much extra rent would you receive as a result of doing so?
Would steam cleaning the carpets be an option?
Thanks, I'll bookmark it
Not an expert on this area, but from what I've read the NRAS property scheme offers investors about $10,000 in tax credits for the first 10 years (+negative gearing benefits), in exchange for the investor providing rent that is 20% lower than market rent
At first glance this appears to be a great opportunity especially on the cashflow side of things, but what happens after the 10 years is over?
#1 Don't overpay for the property
#2 Make sure you do your due diligence on the location of NRAS property, and look at projected demand/supplyTo answer your question, it depends on what is happening in the market
Are property prices likely to go up or down in the area you are looking to purchase in, within the specified timeframe it would take for you to save a 20% deposit i.e. $80,000?
If you think property prices will increase, then it might be better to borrow more money e.g. 90% LVR (provided property will increase by more than LVR paid)
If on the other hand, property prices are likely to remain the same or decline, then it would be best to wait to save for a 20% deposit, so that you can not only save on LMI but also benefit from the increase in purchasing power of your dollars (relative to property)
Hi Mr Props,
Welcome to the property forums
Hope you enjoy reading and participating in the discussions in this forum
To answer your question, I think it depends on what a person's goals are and their knowledge and skill base
Many mum and dad investors choose the negative gearing model because they would like to save tax, and/or because they believe property values will always increase. In order to succeed with this model, the property needs to increase in value more than the amount negatively geared by and inflation.
Personally I would prefer to make money, rather than lose money and save tax (in the hope that the property will increase in value)
Kong
Interesting discussion and comments here
Just wondering if there are any other options available that would allow this great deal to go through
I.e. if you could get the vendor to provide financing for 30% of the purchase price maybe as a balloon payment after 5 years, would there be any lenders happy to provide a loan for +70% of purchase price?
I think one of the biggest expenses when it comes to selling is the taxes that you will need to pay and this can vary depending on how the property was purchased (individual, trust, superannuation fund, or company), what type of property it is (residential or commercial), how long you've had the property (CGT discount), and other costs (improvements, depreciation)
Other costs of selling like advertising costs, real estate agent's commissions, conveyancing or solicitor's fees, discharge of mortgage registration fee, early exit fees etc can vary quite a lot, but a good rule of thumb suggested by Steve is to allow +5% of the sale price for costs
Hi Lee,
You can download the modules as PDF or Word documents if you go to the resource section and scroll down to the bottom
For a direct link to Module 1 you can click here
For future inquiries it might be best for you to contact the dedicated Property Investor Training team via the following options:
- Phone 0388923800
- Email [email protected]
- Via the Forums
Hope that helps,
Kong
Hi Rickim,
If you don't me asking, why would you want to transfer the equity in your home to someone elses?
I'm not an expert in this field, but I believe there are a lot more fees and taxes involved when you want to transfer equity between individuals – If it were owned under a trust structure it might be easier and less costly
Cheers,
Kong
I believe the 1% rule is a guideline Steve formulated to help find positive cashflow properties
It is based on the interest you can borrow at + 1% to account for other expenses
E.g. If you can borrow at 7% interest, the 1% rule states that you should only be looking at properties yielding or with the potential of 8% or above
Thanks for the advice Freckle,
The more research I conduct the less confident I feel about investing in the property market for generic growth, and I might follow your advice and hold off.
When do you think the fireworks will start? What do you think will happen? How will this impact jobs in Australia, interest rates, and the property market? What are you doing to prepare yourself for the fireworks?
Thanks for the post possumpal,
I've had a look at 'The Chase, Alfredton' but I couldn't find many properties for sale on realestate.com.au and according to the developer's site they are 'Sold out':
"The Chase. Alfredton's most popular address!
I feel a bit nervous as well, since I have never purchased a property before, and market sentiment doesn't seem that great, but I'm thinking that in terms of exit strategy for worst case scenario I could always discount my property by up to $26,500, and many real estate agents have stated that if I were to do so, it would sell relatively quickly. Also if the property is neutrally/positively geared market swings over the next 5 years shouldn't be too big of a deal.
Anyways, I suppose the only way to combat fear is through knowledge, and have plans in place to mitigate the risks, so I'll continue to do research into this – reia.com.au and abs.gov.au seem like good places to find out information on jobs, median house price, housing finance, building approvals – are there any other sites you guys would recommend?
Cheers,
Kong
What's the purpose of the thread?
To determine if there is any correlation between the car you drive and how wealthy you are?
Personally I believe there is no correlation between the two, and that it in the end it comes to personal taste and affordability. Some wealthy individuals will buy more affordable cars, whereas others will buy more expensive luxurious cars.
The car you drive will not determine how wealthy you will become, although it will impact your finances.
How wealthy you are will determine which cars you can afford to buy, although it will not determine which car you will buy.
Steve's Market Update for April 2012 was sensational and he gave great insights about the Australian Residential market.
Amongst the indicators he mentioned are:
- Median house prices
- Jobs and employment
- Housing Finance
- Housing Approvals
- Consumer and Business Sentiments
Using the indicators above it appears that the best capital cities to invest in for Generic Growth are Brisbane and Adelaide since they have overshot to the downside below their trend channel. However, having said that, Steve emphasized that 'buy and hold' is not the best strategy in today's market, and it would be preferable to manufacture growth e.g. via renovations, subdivisions or developments. If you are going for generic growth nonetheless, it is recommended you buy <85% median house price, and <1.5km of a railway station to minimise downside risk.
Correct me if I am wrong, but isn't the yield based on the use of the property i.e. for commercial it would depend whether it is retail (4.5-8%), industrial (7.5-8.5%), or office(6.5-8%), and since the property you are considering buying/building is already at the higher end, wouldn't it be harder to improve its use, thus its yield, and ultimately its price? Seems somewhat illogical to try to lower rent, and pay a higher price for the property just for the sake of having a lower yield, as this is less attractive to many investors and yields of similar properties will likely still remain the same.
Don't mean to offend you, but I don't really see the logic behind the following statement:
"You build/buy brand new investment property at place B but you decide not to rent it out"
Why would you decide not to rent it out?
Is it better to lose more money and claim more tax deductions even though you only claim a portion of that loss?
How does a property with lower income and higher vacancy help improve capital gains?
Usually cost = rent / yield, so in theory a lower rent would equate to lower price.
From an investment and cashflow perspective it doesn't seem to make any sense at all.
On the other hand, if your intentions are to live in the IP, and charge yourself no rent, so that you can claim more tax deductions, that would make perfect sense, although I am not sure if that is legal and whether the ATO would be OK with this. My guess is that you would need to charge market rent, but would probably be best for you to talk to an accountant about this.
