Jojo i have to admit i did have some silver and gold bullion ( parent’s made me get them 0.o ) …i have to say it’s one of my better performing investment ! close to 35% return when i sold it in Dec 2010 …but it doesn’t have regular income and it’s long term.

Regards
Michael;

Note: A discretionary trust is far more superior then a unit trust in regards to tax minimisationand capital gain tax- as it provides better control and flexibility..

End of the day you can really make a company ABC pty ltd..and it’s owned by a trust ABC….
Our firm dealt with a case where the couple had a company that was owned by other company..and that 2nd company was owned by a trust who it self was a beneficiary of a different trust 0.o

Cheers
Michael

what you say is true…and i have taken that in consideration..but on a long term perspective-
1. Your buying at a higher price
2. Depreciation will eventually equalizes

I still stick to my last statement “End of the day depreciation can be “Created” by doing renovations etc if required…also if your on a average-just above average income…having a high depreciatable property for the 1st 1-3 years is pointless – just my 2 cents “

There are billions of ways to invest and of course every strategy has it’s advantages and disadvantages…but i have seen so many FHO buyers even some seasonal investors who regretted that “off the plan purchase” .

It’s not my style to see the “money” at the end of the tax year…i rather have access to the money now and some later- “Depreciation does not feed the family- especially when its tough”

Regards
Michael

what i meant was…a lot of brand new properties are hardly positive geared…you be lucky to have a neutral Gearard property.
especially if its a house.

For example:
Brand new

Existing — less then 2 year old—
Same Street
3/1 Defries Avenue Zetland
http://www.domain.com.au/Property/For-Sale/Apartment/NSW/Zetland/?adid=2008872006
$569,000 … currently getting $575 per week
depreciation – Are high as well – $11,000 next 2-3 years.

You do the math

End of the day depreciation can be “Created” by doing renovations etc if required…also if your on a average-just above average income…having a high depreciatable property for the 1st 1-3 years is pointless – just my 2 cents

For me most, if not 95% of new property are over priced and targeted for “owners” and not for investors.

Regards
Michael

I would say dont risk it…unless the price is extremely good, you have your finance in place and you choose to go with a different builder.Why?
1. Financing a half finished home is a headace and a pain! you be limited with lenders choice, rates arn’t as good as you would want it…terms aren’t any better
2. You must question WHY didn;t this guy finish the job? is there something fundamentally wrong? this is the same question the bank will ask will accessing your application.
3. You should be able to get a good price – lack of competition, because to be honest not a lot of buyers would consider this unless they are a builder themselves and have the money.

Half finished home and owners builders = a curse in term of finance!
1. The streamline bank will only take the valuation of the land…the “half built home is worthless” as it’s consider bricks and cement only and if you struggle with the repayments the banks can’t sell bricks and cement
2. if you go with private banks that can take inconsideration the “half built home” the rate is 10%+
3. If you choose owners builders -LVR will be under 65%

Regards
Michael

A catch 22…this 300k is all you have, so if you invest you risk losing some of this because of bad investment, no tenants, dmg to the property etc…but if you don’t invest you be stuck in one place….so you really need to sit down and work out where your “buffer” is…ie how much do you need to “comfortable” live off IF the investment belly flops.

If you decide to invest into the property market, just remember most high rental property have low growth…but for your purpose if your after rental return only then it may be worth while ( 10%+)
1. Rural area- Min 14% return… but can have a long vacancy rate and for mining town chances that if the mining company leaves the area your investment will be worthless..
2. Unique accommodation- student, service apartment – These are usually located in good locations, but be careful of high strata and high management fee….average return of 9-12%

If you do decide to buy, i would suggest you take out a small loan with the bank ( tax benefit and some protection) ; as Richard mentioned your insurance payment can be considered as income..also if you go for an LVR of 30% and with rental income flowing through the bank will have no problem with this loan…even if your unemployed.

End of the day, don’t go overboard…keep a nice healthy safe gap.

Regards
Michael

Jack- yesterday i had dinner with some of the excec from St George Bank – if you have a good long history in this field of work ( 5 years +) a loan can be considered for self employed after 1 full year of trading

Cheers
Michael

tylon020 – one point i must note if you have an redraw for the IP is that …some accountants can be fussy about you placing extra surplus cash into your IP redraw as the SOLO purpose of this redraw should only be for the IP…ie rent etc…
If you start transferring your salary and another incomes into the redraw it can become messy for the accountant.

Offset on the other hand is different. it does not have a set clause for the use.

So it be a good idea to pop an email to your accountant

Regards
Michael

If this is a brand new listing and the agent havn;t had any “serious” buyers…then it be hard to pull the price down…
On the another hand, if this property been listed for 40+ days i find it’s soooooo much easier to bargain and the agent tend to be more “understanding ”

If you want to see how long a property been listed for go here- http://refindhouseprices.com/

Regards

Umm im in the same boat as Ryan – only agree to half.
i would never buy brand new ..there are better ways to obtain the tax benefit then buying brand new…i rather create growth and tax benefit then “buying it”

Buy houses as a first choice for better capital growth – Personal choice, not everyone can afford to buy a house in a “established location”.. .some prefer rental yield so they can “afford” to buy their next IP faster. No point having $200,000 equity in your home if you can’t access it simply because you can’t afford to draw this equity out.

Regards.
Michael