Forum Replies Created
Commission on sales range from 2-3%. It is all negotiable. It can be a lower % up to your reserve price and much higher on above your reseve price to motivate agent. Advertising fee etc are normally payable extra but as every thing else, it is also negotiable.
I was buying a property and seller was not prepared to come down on price. And I was not prepared to go up. No body wanted to give in and eventually agent dropped his commission by 25% to make the deal so that I was happy and seller was happy too. It is better to have one bird in hand rather than two in bushes.
It also depends upon how easy it is to sell or buy property in your area.
Sam Kumar
Trusts are good from asset protection point of view. Therefore many people have gone down that path including myself. But now Victorian State government has dexcided to close the loophole of minimising Land Tax by keeping properties in diffrent Trust names. Now they plan to tax trusts at much higher rate compared to individuals or companies. Based upon this, I have decided to keep my latest purchased property in individual name rather than a Trust.
With regards to asset protection, I hope Land lord insurance should cover you up. Please correct me, if I am wrong.
Sam Kumar
Hi Dazzling,
I like your replies and decided to give you a different perspective to your problem. In life one has to set priorities and rank them in order. These priorities are different from person to person. It even changes with time for same person. For example, if you did not have enough money and then you were presented with this opportunity to make more money away from family. You are more likely to take it.
But after a while you tend to cater for lower degree requirement, which are nice to have or do. Best solution would be to discuss this with your own family, what do they want. It may be possible that they are happy to miss you for a while in exchange for better economic comfort and life later. More ever, kids attitude will also change towards you and they may not like the idea of you spending too much time with them, which happens with teenagers.
You may like to imagine yourself in a scenario, where you are not making as much income and spending more time with family but not able to afford all that, which you can do now.
Your family may like to sacrifice few years while you accumulate wealth, which may give good life in future for not only you but also for your kids.
If you have set a goal then follow that through and do not leave in the middle. In my opinion, most critical years for kids future is grade 11 and 12, when they are preparing for future.
If you give them a house, or pay full fee to get them admission in university in the course of their choice, it would be remembered by them for ever and give you more satisfaction then playing few games of chess with them.
It may sound bit too materialistic but in my opinion emotional needs comes after material needs are satisfied.
I am also gone through similar debate in my mind and have taken materialistic path. I have now taken my work lightly to take more care of my kids till they complete VCE. But again my economic interests are towards kids future. If I am helping my kids to do achieve good carrier path then I do not have to spend fortune in setting them up in future. If they are not successful in future then at least I have a mental assurance that I can help them g financially so that they do not have to start from scratch.
I know it is a radical approach way different from other point of view expressed by others but I thought that you may need to at least think about it and discuss with your family before taking decision and grass may not be greener on the other side.
Sam
I also use MYOB which is easy to use and offers all the information I need to manage my seven properties. I had look at Property Manager Pro but this software just keeps part of information you need to keep, while still requiring you to keep other information elsewhere. In my opinion MYOB offers best value for money and flexibility.
Also this information can be understood by accountants and yourself well at the Tax time.
Sam
I can help you to write business plan or even evaluate its likely potential. I am a venture capitalist on a small scale and envolved in half a dozen business. I have been involved in property development / building / investments also.
Sam Kumar
I tend to agree with Dazzling but only disadvantage I can see with his solution is that you would have to keep servicing your negative gearing properties and you should have capacity to absorb loss of rent, while its vacant. Commercial properties are difficult to rent out unless you are able to find a property already rented with positive cash flow.
Alternatively, you sell your original house after unit completion and subdivision. I say that because capital gains from the house you have lived in for period of more than a year are capital gains tax exempt, if never rented. Once you start renting, ATO would like to take part of capital gain, therefore leave less money in your hand. You may get the new unit completed and move in to that. Sell first house and sell the second after you have lived in for a year and again pocket the profit from unit development. Then you may keep on repeating this formula. One disadvantage with my solution is that you have to sell to release the profits but advantage is “without paying tax on Capital gains”.
A friend of mine has decided to rent his original principle place of residence after having got its valuation from an approved valuer. This certificate would enable him to pay capital gains only on the difference between the valuation done before he started using it as investment property and actual sell price at later point of time. Therefore enjoying keeping his property and using it as IP. However you may only be eligible on claiming Interest costs on Investment Property on the lowest loan amount you have had on the property. If you have toped up that amount for unit constructions etc, may not be eligible for interest cost deduction in your Tax return.
I am not an expert or professional to give any advice, therefore It would be better to check with your accountant or even calling Tax Department and they will tell you exactly, what you are allowed or not allowed. I am giving you few options, you may like to explore.
Keep me posted on your investigations or as we are all learning here and adopting to new creative solutions people are coming up. If my thinking is incorrect, i would like to listen from others so that i can learn further from others experience.
Regards,
Sam Kumar
Sam
Hi,
Although I am not an expert in property inverstments but I can say one thing that If i was in your situation, I would start building process as soon as possible as you have already invested in land, you have equity / funds / loan available to build unit. Therefore, you must develop right now. Time is money. Sooner you are in the position to finish one project, you can start next.
If your rent does not cover the loan repayment, sell your Principle place of residence after subdividing land and pay no tax on Capital gains. New unit should then become cash positive or very close to it. You should not rent front / origional property out as you would be required to pay Capital Gains Tax.
If you feel like talking to me send me email or telephone me.
Sam Kumar
0403170099Sam
Hi Dr.X,
I am a full time investor having invested in various business and recently started paying attention to property investing. I have done a dual occupancy development as owner builder in the past. My strategy at present is to buy and hold but buy undervalued proprtities with development potential to do some value addition. I prefer to buy properties, which have been on market for long time and vendor is looking at selling below market price. As you make profit when buying. I would use extra equity generated after development to fund further projects. Would love to talk to you and others with intrest in money making and share experiences. At present holding 7 IP’s and planning to develop 4 more. I would like to exchange notes/ experiences or do joint ventures with others.
Cheers
Sam Kumar
040317099Sam
