I definitely think you should be focusing on neg gearing properties that will show good cap gains for 2 reasons.
Firstly, being on a high tax bracket will bring you some tax relief, and secondly because cash flow +ive properties will further increase the amount of tax you already have to pay.
I think this is pretty obvious, so i’m not sure why AD…[Read more]

Leigh, great thread to start as i’m sure many people wonder about this when they start to invest in property.

From what i understand, the 2 main reasons for a trust are asset protection and tax bonuses.
As you’ve pointed out, a trust is especially beneficial if you are in a litigious career and you’re seeking asset protection. If someone sues you…[Read more]

First thing you need to do is write down your goals for the future.
Break it down to short term (12 months), medium term (3-5 years) and long term (10 years plus) goals. Under each of these goals and time frames, write down what action is required to achieve these goals.

Perhaps if you told us more specific details such as what your property is…[Read more]

$175 x 52 weeks = $9,100 p.a.
$9,100 / $205,000 x 100 = 4.43%

That’s a pretty average gross yield so i’d expect the property to be in a great location, probably within a few km’s of the city centre and with expectations of high cap gains.

Unless you have a big deposit, this property will mst likely be neg geared depending on how you finance it.

Hi walkernick,
Yes i think you’re better off investing for cap gains than cashflow when you’re young.
However if you’re in a situation where you don’t have the cashflow to service the debt, you’d be better off with something cashflow +ive or neutrally geared.
The main thing is at least you’ve made the decision to invest in propery which i believe…[Read more]

As Peter Parker has mentioned, cash flow +ive properties are good for those nearing retirement age who need the income. There’s not much point investing for cap gains if you’re gonna be dead and not be able to realise those gains.

Those who are younger would be better off with low yield/high cap gain properties.

As i’ve also mentioned, the basis…[Read more]

Scott,
I will answer your questions even though i am cynical about your reasons and some of this info has already been mentioned in this post and others.
Perhaps it will give some credence to the information i offer.

As i mentioned, i bought my first IP at age 19 in 1990 – a “renovator’s delight” in the form of a Victorian cottage in…[Read more]

Relax Hilary, [8D]
My point was that you must remember that people rent in a certain area because they are usually employed nearby. When the economy slows and people don’t spend as much, small towns will usually feel it first when local industries cut back and/or close down. This leads to a higher than normal vacancy rate with a transient…[Read more]

I.O. rates are the best as interest is the only component of your repayments that can be deducted from your taxable income.

Repayments on a P&I loan are 99.99% interest anyway in the first 10 years or so of the loan. It’s only towards the end of the loan that you actually start to repay any principle.

If you want to reduce the principle, you are…[Read more]

I’m not sure what Hilary is on about either re “because there are too many people like us who have done the research, and are now aware of how to access our existing equity to leverage to more and more properties.”

I’ve been investing in property since 1990 when i bought my first IP at age 19, and I have also seen my parents doing this since the…[Read more]

Is it a unit or a house?
First you say it’s a unit, then a house, then a unit again?
Not that it really matters re your loan, but if you intend to renovate it, be aware that you cannot add as much value to a unit than a house for obvious reasons.

You can buy this unit/house if you have enough equity or cash for a deposit, AND you can also service…[Read more]

Hi Susie,
Firstly, i wouldn’t recommend managing your own property unless you have the time and can deal with tenants without being too soft. I’d rather pay my Property Manager a small commission (4% in Melbourne and 6.5% in Queensland) to do this for me as my time is too valuable.

But if you do, i’d recommend reading some books on it first.…[Read more]

Some tips for an improved forum:
1) I agree, the ability to post PM’s (Private Messages) to other members would be excellent.
Not sure why you can’t do it with this forum because it’s a standard feature on heaps of other forums i’ve visited.
Maybe Snitz don’t have that function or it’s been disabled for some reason?

2) Under member’s profile, it…[Read more]

Hurricane, so…what is the best structure to use according to the “Wealth Guardian?”
And what will you be telling your accountant?

It would be great if you could share with us forumites this tit bit of information about what the “Wealth Guardian” recommends as the best structure to invest in property.

After all, the whole idea of this forum is…[Read more]

Yes, settlement is when the title has been transferred into your name and ownership takes place.

However as Steve pointed out, the purchaser has a legal obligation to insure the property from the date of contract, not settlement date. This is also the case in QLD.

Capital gains is worked out from contract date of purchase and sale, not settlement date.

I agree with Stonewall and darren b.
Forget about it. It’s a small amount of money that you should’t waste energy on and lose sleep over.

Consider it a learning experience and move on…don’t look back in anger. You’ve also gained 20% in equity so why complain?
I’m sure he did a runner for a good reason if he lost equity in the deal. Let’s just…[Read more]

As far as i can tell, the 11 second solution is a 10.4% gross yield.
If you have a property worth $x and the weekly rent of $x is “double” this figure, it always works out at 10.4%. Examples:

$262,000 = $524 pw = 10.4
$185,000 = $370 pw = 10.4%
$148,000 = $296 pw = 10.4%
$130,000 = $260 pw = 10.4%
$67,500 = $135 pw = 10.4%

etc, etc, etc.

This…[Read more]

It sounds like a typical case of the house being half built by a family before someone went psycho and killed everyone, burying their bodies in the backyard.

Happens all the time.

Have you checked the kids room for the moving rocking horse and jewellery box that plays music?

As far as i can tell, the 11 second solution is a 10.4% gross yield.
If you have a property worth $x and the weekly rent of $x is “double” this figure, it always works out at 10.4%. Examples:

$262,000 = $524 pw = 10.4
$185,000 = $370 pw = 10.4%
$148,000 = $296 pw = 10.4%
$130,000 = $260 pw = 10.4%
$67,500 = $135 pw = 10.4%

etc, etc, etc.

This…[Read more]

I concur.