Forum Replies Created
I have looked at the figures as they stand the capital growth for 2007 was around 3.5% if that continues and we are able to claim all out interest then we will break even taking capital growth into account. I would think it would be about 3 years until growth returned to 5% or more in this outer suburb.
We are also considering the option of selling the property into trust to ensure we can claim the full interest deductions in my husbands name. We are looking at the Chan and Naylor property trust.
Any feedback is greatly appreciated.
natHi there,
I work in insurance and sell a landlords policy through my company though truth be told it is not great so I would reccommend the policy I use for my own properties which is through Terri Sheer a specialist landlord insurer. This and most other landlords policies will cover for landlords fixtures and fittings such as curtains, appliances, carpets etc. As long as the amount insured within these policies is enough there is no need for extra contents cover as the other items will belong to the tenant and are their responsibility. You will only need building cover of there is no strata insurance. If there is strata insurance ask your strata company for a copy to check it is adequate if not see if you can opt out and take your own building cover (not always possible but doesn't hurt to ask). If there is no strata insurance you will definately need building cover which will cover the structure.
There are many companies who do building and contents insurance that have recently jumped on the landlords bandwagon. Generally speaking their cover is cheaper and does not cover as much such as accountant expenses if the property is audited, adequate loss of rent, cover for accidental tenant damage etc. Read the PDS documents carefully as there is a huge variation in the landlord products available.
Natalie
Hi there,
Having worked in real estate in WA and currently in Insurance I thought I might put in my 2 cents worth here. Firstly the fact that it is strata titled property has no bearing on the need for landlords insurance. Landlords insurance shhould be taken as at settlement and I recommend you go through a landlord insurance specialist not one of the many quasi landlords policies that are currently available their premiums are cheaper but their coverage really sucks! (I work for one of those companies and have my landlords insurance elsewhere)
Secondly there is no need for you to take any insurance out on the property prior to settlement unless for some reason you are taking early possession and it is stated in the terms of the early possession that insurance will be your responsibility. Legally you have no responsibility for the property until settlement and any damage caused between your final inspection and settlement should be rectified by the current owner otherwise settlement can be delayed until such time as the damage is fixed. However if there has been damage and you just settle without having it fixed you may not have any leg to stand on. Perhaps have another inspection if you are realy worried on the morning of settlement before giving the green light to your settlement agent to finanlise the transaction.
I have access to a good broker , Russell Parry in WA through my work. The set up with our company is that he is paid a salary instead of being on commission from any banks which means he really does look for the best deal for his clients rather than who is giving the best commission at the time. (No offence to other ethical brokers on this forum).
My name is Natalie and I can be contacted between 9am and 2.45pm on 90211511 and I can pass you details on so our broker can make an appointment to see you.
Thanks
NatalieThe housing boom in Perth was the result of the mining boom which has in no way slowed and continues to underpin prosperity in this country. Prices no doubt will soften slightly with all the media hype but the demand is still strong and as investors with the shortage of houses in some areas there are some great positively geared deals to be had as in mining centres througout WA rental income is through the roof. I sometimes wonder if the media has more to answer for than the reserve bank when it comes to puting fear into people
I don't understand why property investors would be worried about property values dropping anyway we know it is a cycle and will eventually rise in the meantime doesn't it mean there are going to be some very cheap deals to be had as people begin to panic and sell up in a buyers market.
HI there,
In summer in Western Australia these types of clearing particularly in the south West are necessary for the huge bushfire risk. As it is the middle of summer it is likely that there needs to be a professional do the burnoff which would include the need for permits etc. probably a revenue raising exercise for the local Govt but also to ensure the safety of all the neighbouring properties. The Local councils can require people to get rid off this type of debris if it poses a significant fire risk which if left undone can result in fines or Liability should a fire be fuelled by debris of this type. $1000 is probably a small price to pay and I would guess it is illegal at this time of year to have a DYI burn.
Natalie
I am also in WA and am happy to travel the 600km to Perth if only I knew a good financial advisor or accountant to go to. So Postenterprises if you find someone who is property savvy can you also let me know.
Thanks
Natalie
I am also in WA and am happy to travel the 600km to Perth if only I knew a good financial advisor or accountant to go to. So Postenterprises if you find someone who is property savvy can you also let me know.
Thanks
Natalie
I actually work in insurance and have gone with Terri Scheer for my landlords rather than the company I work for (and get huge discounts from). The main reason is that they are specialist landlord insurers and that they cover not only malicious damage by tenants which can be hard to prove but also accidental tenant damage which is less difficult. They obviously also cover things like rent default and professional service for a tax audit on rental expenses which I have used recently and found their claims process easy to use. Their landlords cover is not comprehensive for the building so you would need separate building cover which they also offer as a separate product . I use the company I work for for this. Some building insurers will offer a small amount of extra insurance if the property is an investment but it is really not very comprehensive. I always think you wouldn't go to a knee surgeon to fix an eye problem so go with the specialists in their field.
Hope this helps.
NatI have also recently discovered Steve Mcknights books and after spending some time trolling these boards it seems that it is the exception rather than the rule to find a "ready made" cashflow positive property. It seems that most people are buying almost cashflow +ve or cashflow neutral and making changes to either the property, marketing or investment strategy which creates a cashflow +ve property. Or simply buying and holding until the property becomes cashflow +ve. It seems the trick is to buy as high yielding as possible then either make changes or buy and hold and eventually you will be i the black.
I hope I have understood things correctly and am happy to be corrected and put on the right path if I am wrong.
Natalie
HI
Are you saying you think it is ok for the property being owned in my husbands name to be leased to the company who supply it to us as accommodation and then we can claim the tax deductions. Because this is more in our favour than getting the allowance. When we intailly set it up the company was paying $575p/w rent for our property which was market value and included utilities. However the accountant who did our tax return last year said he rang the ATO who said we couldn't do it because we as the owners were living in it.Which is why I was thinking if it was owned by a trust with my husband as a beneficiary and leased by the company we would not personally be considered the owners.
The other house they lease is too small for our family as we did originally try to live there. We now get the LAHA allowance and use it to pay the mortgage but it is less money $2000 a month and we can't claim the tax deductions.
Natalie
Thanks HG for pointing me to the magazine. I have seen them before but for some reson never thought of purchasing any. I have ordered the current and a couple of back issues to peruse.
Thanks
NatIn reply to Scotts post we already have 2 primary age children and most of our monthly income is already from a single wage my meager earnings just supplement. I would like to stop working and concentrate fulltime on investments while my husband continues his career and hopefully eventually my earnings will overtake his and he can reduce his workload. He is 42 and the toll of alifetime of long hours and hard work is starting to show. I am 35 and feel it is time to do my own thing and see what I can make of investing but as I said previously I have been wanting to do this for the last 10 years so I hope I am not still sitting here in 10 years looking back on all the coulda woulda shouldas.
Richard can you tell me more about the Benefits of selling the Perth Property into trust as We have had lots of loan increases in the past which paid for lifestyle expenses (when the property was ppor) I am concerned that the bulk of the interest is in fact not actually tax deductible after all.
Thanks
nat
Its interesting to read your perspectives. I am surprised not to have been advised to sell my house in Perth. This option is playing at the back of my mind as an easy but emotionally painful way out. I could put some of the proceeds on the Kalgoorlie house reducing the debt a possibly creating a positively geared investment for the future and have a deposit for other investments as well as freeing up a large amount of borrowing capacity.
The only down side seems to be that I had always hoped we would move back to this house and although my head tells me its just bricks and mortar my heart says something else.
My overriding desire however is to fund our lifestyle through investment and ideally I would like to be living in Queensland not Kalgoorlie. We are only here because the mining boom provides us with a much higher income but i am painfully aware this will not last forever so we really need to get set up in the next few years.
Natalie
I can't believe it if we moved out of our home and rented it out then our score is 315 and it said very good. This really is a new way of thinking I was always brought up to believe that renting is for losers as you are paying off someone elses mortgage far better to pay your own. Maybe I will have to find a good rental with a pool so as not to disappoint my kids too much.
We got -254 and can only survive today!!! I am going back to see what my score would be if we rented out the home we live in and rented ourselves as it is the plan to make it an investment property eventually although kids may be disappointed as we just put in a swimming pool!!!
