Forum Replies Created
Try discussing it with your accountant before deciding whether to move in.
May cost a couple of hundred bucks.
May save up to tens of thousands.After your accountant"s advice, you'll be in a better position to decide which way to go.
quickchick
I perceive that Brisbane has somewhat of an over supply of rentals. (Due to massive amounts of development in recent years.)
If you want to invest, always a good idea to check rental demand (eg vacancies) in that area before buying.
Plus, check future employment prospects to see if the long term demand looks healthy.Elsewhere in Australia, I don't think rentals have dropped at all. Many areas have gone up.
quickchick
Hi Wonderland,
If when you have your family, there will be less family income, definitely better to buy an IP before then. (Bank may not want to lend.)
6% is often seen as a good return on investment in a capital city. More often found in 'average' areas and at lower prices.
But then again, maybe less capital growth expected. But more affordable when your income drops.Waiting for the ideal time or property leads to never buying. And if you're not in the market, you can't profit from it.
quickchick
In my opinion, I don't ever want pools in my IP's.
Cost of upkeep, especially if tenant has lost interest, becomes a problem.
No-one wants to pay for a new filter for an IP pool! Vacancies of IP's with a pool means you have to pay someone to maintain it.If you want a pool in your PPOR, I strongly recommend to buy the house with the pool!
Unless you want to stay in your current house.
We enjoyed a pool when our boys were late primary aged to late high school aged.
Then our experience was, once they started driving, the pool was no longer used much or at all.
Which was a good time to sell, and buy without a pool.If you put in a pool in your PPOR, consider making it above ground. Look at buying second hand if possible!
Can be dismantled and resold when interest dwindles. And you don't have to move house.
Costs of inground pool, solar heating, tiling, etc could cost $50K!quickchick
Buying an unappealling place and doing a reno is a quick way to add value, and add to your rental income.
Everyoine else wants to buy the clean modern place too.
So maybe the one which needs new carpets may be a better investment.Trick of success will be, getting a quality tenant. I'd be screening agents carefully, before asking them to manage any property.
Especially in a lower socio-economic area. (Which usually gives better returns, so can be worth it.)quickchick
Or buy a 2 bed apartment, in a suburb a bit further out. ie similar price.
Ask your bank about their policy on lending for 1 bed apartments.
Banks are geneally conservative about lending for 1 bed apartments esp if less than 50 sq m.
Which caps your eventual sales price, and hence may limit your eventual capital gain.That may be right, Greg.
Us property taxes cover schools etc, not just like our council rates, hence a lot more expensive than our council rates.My question to you would be, can you buy USA houses with cash?
If not, you need to be able to open an account in USA, to be able to borrow.
Maybe also set up a company to protect youself, to buy property in (must be a US company of course).All of the above quite difficult to do from Aus.
quickchick
A buyers agent is a good idea if you don't have the time or the knowledge to make a good IP purchase.
If you want more than a couple of IP's, may I suggest you spend the money on your financial education rather than paying someone else with more skill than you.I personally would recommend Steve's RESULTS programme if you really want to be a property investor, rather than just owning a few IP's.
quickchick
I doubt that you can BUY one.
But maybe you can MAKE one cahflow+ eg with above ideas.
Or maybe buy a block which you can subdivide, and use payment to pay down your loan.
(Check with council; don't presume this will be possible!)I'd steer away from apartments unless you count in the body corp expenses.
Maybe a small block of units which you buy in one line, not strata titled, may work.
quickchickHi Scott,
Best approach to this deal would have been to see an accountant BEFORE you bought the property, set up a trust if advised (only takes your accountant about a week), then buy the property in the desired entity. Now, if you plan to change ownership, I believe that you will have to pay the full stamp duty price. Again!
(Unless you are in a position to be exempt from stamp duty, but I don't think a trust can be.)
I'm not clear whether you plan to move into the new house or not.
quickchick
http://sn130w.snt130.mail.live.com/default.aspx?wa=wsignin1.0
is the link to the article, see for yourself.quickchick
On a slightly different note, has anyone seen the new RPData review that it might be time to look into investing in mining towns?
Due to prices and demand improving, they suggest jobs will increase and hence there will be a squeeze for rental property availability. At current prices and rents, they say they are a very good return. They discuss the risks of mining town property investing, but feel prospects are promising.
(My summary, not in their words.)
Moranbah, Dysart and Clermont all mentioned.I'm not an accountant, or a solicitor.
But what has worked for us, is to have properties held with the same strategy, in the same trust. eg Trust 1 for positive cashflow with us as trustees.
Trust 2 is for developments, and has (our) company as its trust.We have been advised not to hold "too many" properties in the same trust. In our case, we'll limit that to about $1.5m value or max 4 properties.
If you intent to give any profits to charity, you need to name that charity as a beneficiary of your family trust, when you set it up.
This means you can give pre-tax $$ to charity. Otherwise you have to give the money to yourself, pay income tax, then give the money to charity.From my (non-professional) understanding, a Unit trust means all beneficaries must take equal profits. eg 4 trustees get 1/4 each. Then they all pay tax on their individual annual income (eg $70K job plus $20K trust to that one 0person, theypay tax on $90k total income minus any deductions.
A Family trust can be "discretionary" ie choose who gets the profits. So a husband who is on a high tax bracket from his job may not "take" any income, but his part time worker wife may take all the profits so they don't pay so much tax. If you have children, you can name them as beneficiaries but don't ever have to give them profits. (You can decide year by year.)Hope this helps, but clarify all points with your accountant first. (It is an accountant who sets it up.)
If the accountant doesn't know, change accountants!quickchick
Maybe I can help with your questions, as an investor with property who has visited there.
Dysart is maybe 2 1/2 hours from the coast, by car.
I imagine landlords will generally be OK about pets, maybe just put on the lease for you to clean carpets on leaving. Will depend. There are less houses for rent there now than have been advertised for the last year or more. Not sure how long your dogs will have to be quarantined by customs when you move.Snakes (I understand you don't have them in NZ!) generally prefer to steer clear of people and dogs. If you live on the edge of town eg backing onto open ground that is not mowed often, that could be a problem. If you live among other houses and keep you grass mowed and no junk eg old sheets of tin on the ground, you should be OK. Some Aussie dogs who live on the land are very good at killing snakes, maybe that goes with the breed of dog. (Not sure how they get the skill!)
quickchick
Hi Koiking,
I noticed that this post is now 3 months long….
Any update on how things are going? Did you approach neighbour?If not, may be time for action.
You'll never know if you don't give it a go!quickchick
We have friends who rented out their first house and moved to the country. They moved back after a few years, wanting to live in their first house, having given the required 60 days notice in writing. (NSW) The tenants didn't want to move, said they couldn't find another place, and our friends had to stay with other friends until the matter went to the Tribunal.
Seems that tenants rights are above the landlords!quickchick
RE NSW STAMP DUTY CHANGES
We have a property near Parramatta which we propose to build a new house at the rear, then split the title with a dual occupancy title. Has to be dual occ due to size of land, which council requires us to build before the new title comes into effect.
Can we take advantage of the new system by selling to an empty nester market, off the plan, pending new title?
Then we can get some benefit from the new concession, which we may then recuperate on selling the reno'd existing house. (As mentioned, the old house may be less attractive due to the concession.)quickchick
RE NSW STAMP DUTY CHANGES
We have a property near Parramatta which we propose to build a new house at the rear, then split the title with a dual occupancy title. Has to be dual occ due to size of land, which council requires us to build before the new title comes into effect.
Can we take advantage of the new system by selling to an empty nester market, off the plan, pending new title?
Then we can get some benefit from the new concession, which we may then recuperate on selling the reno'd existing house. (As mentioned, the old house may be less attractive due to the concession.)quickchick
Broad questions, Jason!
First, I don't think you'll get any First Home buyer grant as you aren't going to live in the house for 6 of the first 12 months.
Terminology wise, you will be the landlord but you will have to get an agent to manage it for you. Local agent is best. A tip, ring a local agent asking to see a house they currently have advertised. (ie pretend to be the prospective tenant.) See how keen they are to help you view the house, if they ask for references, check if they ring your referees!
I'm sure you will be negatively gearing the house, ie you will have to pay something every week to add to the tenant's rent, which may be fine for you. Look at Australian Property Investors magazine in newsagency, check suburbs in the back and look for a higher return eg 5%. (Which means you don't have to pay a fortune out of your own pocket. Your life may change eg family over that time period.) I'd suggest NOT to buy a new house. You'll be emotionally attached, upset when carpets stained etc. Look for a house with some add value potential eg reno down the track. This would improve you capital gain.
Talk to an accountant re negative gearing, how much tax you'd have to pay if eg rented 8 yrs, lived in 5 yrs, then sell. (Subject to some capital gains tax as it was a rental property.)
That's a start!
quickchick
