Forum Replies Created
You have wandered down the wrong track just a little.
It is simpler than what you have described.
At the end of the FY the IP will have made a profit or a loss (pos or neg geared).
You simply add that profit or that loss to your taxable income and pay the tax on the end figure.
Sometimes the loss may drop you to a lower tax bracket or a profit may lift you to a higher one. In both cases you will pay a proportion of tax at both higher and lower rates.
If you are two people then you each use 50% of the profit/loss. Assuming 50% is the agreed split of the asset.
Hope this helps.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
You could build, move in then sell it CGT free. Hopefully for a decent profit. Not as easy as it was a few years back but still quite possible.
Or keep it and use any equity growth to fund the first IP.
Plenty of ways to skin this cat. Hasty decision to sell is one route to take but think about why you bought it and do some research into the completed valuation.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
The key really is whether he is selling you his stock for a huge markup or not. That is where people get hurt badly.
If it is just $550 for a decent financial education and plan then that seems cheap – another warning sign …
My personal belief is that you can invest time and money in your own education via these websites like this one here, books and even the odd course.
Buying IPs and renting them out really isn’t rocket science you know…..
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by [email protected]:Originally posted by arrowsmith:I am renting. My partner & I have good incomes & no dependents and I am 30 years old.
We have a very good combined disposable income. We are just starting to build savings after a long trip overseas.
Our rent is cheap (1/7 of our income) but the place is very old and run down. At this stage the only incentive to buy is emotional.
Stamp duty in Vic is ridiculous. We are looking to buy around 400 – 450k and at that price stamp duty will be $22,660. If we don’t have 20% of the value we will end up paying LMI also which could be as much as $14,000.
That’s a straight up dead cost of $36,660 for nothing.
I just can’t make it add up.
Say the capital gain on an average Melbourne property is around 7% (annual), and that’s if you’re doing well, we’ll be ahead of the game if we just continue to save and put our cash in managed funds or a high interest bank account (on which returns will increase as the official interest rate increases).
It will take us a year to save 90,000k to sink into an investment that is VERY average ie. property.
Why do people do it? Am I missing something obvious here?
If someone told you it would cost $36,000 to get into a $450,000 investment (that you don’t own) that MIGHT earn 7% and that you would have to pay 7% (and increasing) would you do it?
It sounds like a dud to me, but I may have it all wrong.
Hi Arrowsmith,
The comparison between property and shares is usually made with the exclusion of one very important factor – how much of your own money do you put in AT THE START. This is then the basis of your CASH-ON-CASH RETURN. In otherwords; how much do you get back on what you have put in?
You can buy a $100k of property with around $10k of your own money.
With shares you cannot. You may be able to get an unsecured personal loan for them, but the risk is very high – if the shares collapse where is your security? Can you insure your shares? I doubt it.A popular argument.
You do not consider some of the more sophisticated products available.
CFDs, Warrants, Options, even 100% geared and capital protected vehicles to buy shares with.
How does your strategy stand up in comparison to these?
I am not suggesting that any form of investment is better than another. I hold property, shares and even cash as part of my portfolio.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by cama20:Originally posted by Mortgage Hunter:Originally posted by arrowsmith:DLPP,
A) I would lose the 10k first home owners grant
Tragically common misconception.
Suggest you reread the legislation.
There is a link to your State’s requirments on my website.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
What do you mean by this? Is there a way to by an investment property and still get the FHOG? If so this is very interesting.
Regards
chrisChris,
Plenty of experts will tell you, perhaps at a party, that if you buy an IP then you lose the FHOG. The legislation is quite clear on this. If you buy an IP after June 2000, and not use it as your home, then you can still get the FHOG when you do buy your home.
Look it up yourself to confirm it.
Even rea lexperts get this wrong and I know Mortgage brokers and accountants who didn’t believe me until I showed them the legislation in black and white.
See for yourself. Follow the links on my website to your State’s body that oversees the grant. There you can read it for yourself.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
When your first post reads something like:
Has anyone used this company? I am looking at them and they seem great http://www.ripoff.com….
I have a super new loan product available. Email me for more detail…
What do you think of this wonderful new suburb where everyone is making a bucket of money. Check out this super property for sale http://www.offloadmydumptoanewbieinvestor.com …
If it looks like spam and smells like spam we tend to think it is spam and act accordingly. My posts get deleted but this time I tried something else.
Sandra, welcome to the forum. How about posting some useful info and advice and try to make this a better forum than it is now. Keeping it clear of unsolicited offers is a pretty big job and you got to understand that sometimes innocents get caught up in the deletions and editing.
All the best
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Don’t pay it.
There is no requirement for you to provide it. Telephone, internet and other services like that are a tenants responsibility.
Tell him that yo uwere considering the $70 modem but he acted hastily and installed a more expensive one without your approval.
Advise him that you are dissapointed by his actions and that you hope that dissapointment has faded when it comes time to consider his lease renewal.
I reckon you would be better off without this goose.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I use PIA.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by Milly:erm……….how come you two have the same email addy? Richard are you talking to your wife here??
[blink][ohno][upsidedown][wacko]Well spotted That was me[blush2]
I am so sick of deleting all this spam every day that I decided to have a bit of fun instead and changed her email addy to Richard’s. I don’t think he even knows I did it.
Hope he gets an loan enquiry or two to compensate him for the time he spends educating us all on loans etc!
Cheers,
Simon – moderator
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by redwing:
Who do I use? (Scott from the Forum and http://www.depreciator.com.au)Am I happy with the service? (Yes)
Should you use one? (How old is the Property, have you done renos?)
I must disagree mate. Regardless of the age of the property – you should talk to Scott. He will make the call on whether to do a report or not. With his guarantee that the repport cost will be recovered in year 1 from your tax refund or it is free – you cannot go wrong. My oldest place is 45 years old and I have claimed an additional $7K in the last three years for a $660 outlay.
I think this is a no brainer – call Scott. He will tell you if your place is worth doing or not and wont charge for that advice.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Sounds like you have already started.
Why not duplicate what you have already achieved?
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by salacious:Thanks guys,
BUT, what bank would not get a valuator in and servicebility is not a problem?
Dom
[biggrin]
Guess that is where a good broker proves his worth …
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Don’t forget that CGT is reduced by 50% if you held the proeprty for over 12 months.
The rate also depends on your personal tax rate. If that can be low then you will pay less tax.
I am not a fan of selling assets.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Of course you can get a higher return if you invest your money elsewhere.
Is it as secure an investment?
Will you get capital growth on top of your return?
Why don’t you think about keeping your property and invest elsewhere?
Draw the loan up as high as possible and use those funds to open a margin lending account and double it to invest in equities or managed funds?
Just some food for thought – certainly not financial advice.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
If it is just a house that has been set up then I would try for a normal residential loan – ideally with a lender who doesn’t require a formal valuation (the vlauer might point out the setup).
Thats how I did mine.
They will just use the normal rental though – will that be a snag to get serviceability through?
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Absolutely yes.
http://www.depreciator.com.au is mine.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Sleep in
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
There is no too low or too high.
If the property has potential for CG then I would be happy with that yield.
What is your overall strategy? Work that out and your answer will be clear.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Loook at the URl of this site and that may tell you why this forum is about houses.
Go to http://www.fido.gov.au and read about why these instruments offering over 8% return are high risk.
They are a yield instrument only. No CG is possible.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I do it – quite well too I must admit.
I have written about it a number of times in this forum.
If you do a search on Student accommodation I am sure you will get heaps of info.
Or ask some specific questions in this thread and I and others will try to answer them.
Is just a big ask to expect me to write all about my experiences with them ….
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
