Forum Replies Created
Thanks Simon,
So if my income is $75,000 for the year and my wife’s is $30,000 and our investment property was negatively geared, earning $15072 and interest on the loan was $25374, and costs on the IP was $3300; how do I calculate what can we claim back? All the income minus all the costs, then work out the tax paid, and subtract tax owed?
I’ve spoken to an accountant and am obviously a little confussed. I’m in the process of doing some budgeting for a possible first IP.
Thanks again.
Chris
Thanks Dave,
I’m after a cashflow (buy, rent, hold) calculator. If you could post or message me the link that would be great.
Thanks
Chris
Hi,
IMO no property worth spending money on is anything close to that low. Prices like that are from the early 90s at best, though setting the time machine to the 80’s would be better. I’m not an advocate for buying in backwater towns (high risk). I would prefer to take $40K and pick a young stock with some steady +ve growth within the material’s or energy sectors.
I know Underwood very well and the property looks like it’s over sophisticated for the area, which is 20Km’s sth of Brisbane CBD. A lot of money seems to have gone into this property. It could have been bought in it’s original state for around $270K-$280K (in the last 12 months). Potential renters in this area would be families or young couples in the lower to mid middle class. This property seems more suited to the upper end of the middle class who want something nearer the city. There are a lot of these types of homes in this area (garage/storage downstairs and living upstairs) though rarely are done up to anything near this property. Most of the time the downstairs is slightly too low to be legal head height. If it were me I wouldn’t buy it as I think it would be hard to rent as it’s targetted to individuals who are looking 10Kms closer to the city.
Hi,
I work for Telstra in Business Sales and regularly come across customer’s with similar issues. A letter to the Ombudsman wouldn’t be a worthy investment of your time. Although Telstra has been a semi-privatised company, it has only been the last 12 months that we’ve operated like we have shareholders. It can be quite difficult for a company to offer key services to 100% of the population and and make every service profitable. (Duckster clearly has some frustrations with Telstra and I would be interested in hearing more about his situation in case I can offer some extra help.)
Depending on how important it is to have broadband setup in the short term, wireless broadband would be a definate possibility. Do you use a desktop or laptop pc? Given you’re so close to the Melbourne CBD it’s likely that either EvDO (run through the CDMA network) or NextG (recently launched network to replace CDMA circa 2008) will cover your suburb. If you message me your postcode I’ll have a look at some coverage maps. There are also other options outside Bigpond ADSL and cable to receive an internet connection.
Thanks Duckster,
The target tenant would probably be students or people wanting to share with others. It’s not in a yuppie area but is quite close to uni’s and tafe, about 20 mins to the CBD, 5 mins to an industrial estate, and 10 mins to a westfield. The area is quite mixed, with some young families, retirees and share accomodation.
I’m interested in this particular property as it is at a good price, even considering the main intersection, and has been on the market sometime. It’s a bit of an unusual property as at first glance it looks like a 2 unit block of units rather than a house. The RE dropped the hint that the owner may consider an offer 15% less than the already recently reduced asking price. It does need some work, but nothing too major.
Does anyone have an IP similar who could comment?
Thanks Milly,
I’m also in Bris so I guess that changes what I was planning. Is there a way to get the granny flat assessed as a separate property?
It sounds like you’ve worked out a good strategy.
The 2 living areas are quite separate, apart from the laundry which has an internal door to the “granny flat” (and an external door to the yard), though the internal door could be locked so the tenant of the main house could use the laundry without being able to get into the “granny flat”. There is a large back deck area closesly associated with the main house and a huge 2.8 car lockup garage. The yard is also shared at present. The “granny flat” is underneath the main house at legal height. I could fence off the front/bottom of the yard for the “granny flat” and put a divider in the garage and an external door to the yard of the “granny flat”. The only way into the main house is from the deck at the back, which also has a door to the garage. It’s quite an unusual setup, but with some creative thinking it could be turned into a 4 bedroom house with separate 1 bedroom self contained studio. The studio area actually has 2 rooms in it, though they’re only 2M high, so would have to advise that the tenant uses the main living area as the bedroom.
Is it expensive to have a separate power meter?
Thanks for your help.
Thanks.
I haven’t actually checked (this is our first IP). The stove in the self contained unit is electric. I will investigate though. If there isn’t will I have to have a power metre installed? I wouldn’t think water would matter too much as it would be paid on the rates, which is paid by the property owner (ie me).
Thanks. I’m guessing non-habitable means lounge room/kitchen etc or is it any room within the property to be listed as a “living area”?
Hi Damien,
Sounds like you’re on the right track. My only concern is that 100K sitting in the bank earning bugger all. A conservative managed fund would’ve returned around 10% in the last 12 months. Coupled with a margin loan you could be seeing quite a return on that 100K. Even if you hedged your investment and put 50% into a managed fund; though it depends entirely on how soon you plan on getting into the property market. I would speak to a couple of financial advisers (be careful as they will want to sell you one of their products) to see what they suggest and work out what seems the best that fits with your lifestyle and risk profile.
Your Accountant will have a copy, so will the ATO as it’s required when you submit your tax.
Whatever you decide to do – DO NOT put any of this cash into an IP loan. Use an offset as Derek suggested but don’t use it to reduce an IP loan directly!Can I ask why?
You could always tell your neighbour he’s welcome to dig out the roots that are on his side of the fence.
We’re currently getting out PPOR landscaped with retaining walls etc. I think the hardest part is finding the right person for the job. Work is underway on our place and we’re very happy with the guy we chose to do the work. Unfortunately we’re not in Adelaide, but you can still use the same method to find someone.
We went to our local landscape supplies and asked them if they could recommend anyone. They gave us 5 business cards and I asked them to rate them from who they thought were best. We called the first 3 and had them quote and show us their work before choosing who we went with.
Good luck with the work.
I would avoid auctions. They’re focussed on making the seller as much as possible and the buyer has no negotiation power. They’re good to visit and watch to get an idea on what interest the property has though.
Hi,
The best advice is to read as much as you can from successful investors and don’t go rushing into anything. If you want something you can just launch some money into quickly, the best option would be a managed fund. It sounds like you might be new to investing in general as high returns equals high risk. Anyone saying something is high returns and low risk is hiding something.
You’ll find plenty of useful info on these forums, but be sure to analyse what you’re reading and don’t just absorb everything as fact. Different people have different strategies and you need to form your own.
Good luck
Uni isn’t the be all and end all. Depending on what you study your degree doesn’t have to be what you do for the rest of your life. Don’t choose a degree because you think it will make you the most money, or because it sounds the most impressive, or because its what your parents want as you’ll end up hopping from one degree to another or never finish. Think about what you like and what interests you and head that way. A business degree or commerce is quite good as it will give you a taste of different things and you can explore further through choosing different subjects.
I did an IT degree and majored in artificial intelligence, I’m now in Corporate Sales for a large Telco. Uni gave me good foundations in learning how to learn, be disciplined, manage my time, write and research etc. Plus learn related IT info. But I’m not a programmer or typical IT person as I like dealing with people more than with computers. The same concept works for Business Degrees, Commerce etc. Don’t see it as putting yourself into a little box. Use it as a base and diversify into areas that interest you the most. A degree is worth doing as it seen as an achievement by employers. I have no doubt mine has been a large part of getting me where I am. But at the same time, uni isn’t the only option.
As far as paying goes. Unless you’ve got it easy and have more money than you know what to do with, use HECS, don’t pay up-front. Theres no point scratching together the money when you can pay it off as you go, when you’re earning more money.
I don’t believe so. If you’ve bought a property you can’t utilise the FHOG.
