Hi Nicki,

The idea to invest in property is a good one, but I too would be cautious about the house/land package offered to you.    

Friends of mine did this several years ago and YES their Financial Advisor did make commission out of it (they found out later). The problems they have come across are these… If it is a large development, many many people are being fed the same lines as you and so there will be many new houses completed at around the same time all looking for new tenants at the same time as you as well – this will instantly cause the rents to decrease as you all compete for the same middle class/working tenants and so investors will drop rents to attract the tenants & you will have no choice but to follow suit. Your rental will probably now be something like $320 per week or less.  No where near as good!

To add to this there is a good chance that there may be more Housing developments built in the area in the next few years & then your investment becomes "old hat" and not as interesting as the newer developments. When you try to sell it you might  not get the $370,000 you paid for it (have a look at what other older local housing estate prices are at the moment to compare against) because buyers will just go for the new House & land packages themselves. The tenants you are trying to attract will also opt for the newer house if the rents are about the same.  (All this has happened to my friend)  – Oh and also there was no bus route nearby  or shops within walking distance which was also a turnoff for tenants.

My advise would be – look around and spend the $370,000 on a couple of ready built properties (or one – depending on the location) that brings in better rent – or find your own land in a good location around already established houses (older) & build on that – hire a project manager if you prefer to leave a lot of the work up to someone else. 

Good luck

Shnook

Hi Joner,

I also saw that ad & will be attending the seminar on Saturday in Sydney.

I considered all angles before parting with my cash, but in the long run there was nothing in the itinery that I wouldn’t be interested in & given the extra bits of information you are given I thought that it would be well worth it. I am sure that given the relatively low fee that there will be some kind sales pitch or it wouldn’t be worth their while to run it. But as long as your prepared for that aspect I can’t see the harm in attending!

cheers

shnook

Yes I did as well.

Sold in an area that has had great cap gains, but the rental incomes are quite low.

Have paid out my debts (so now I have more CF+ props ) & have enough money left over to put back into several more deals that are CF+.

Looking forward to several more purchases this year – all going well

cheers

Shnook

Hi,

Also do a search on the Land Tax topic on this forum – there was a discussion on it not that long ago.

I’m not sure what the IPAC site says (couldn’t connect to it for some reason) but just wanted to make sure you realise that Land Tax is similar to your own tax & that it is up to you to submit the return for your investment properties (including strata units)- they do not follow you up for it (normally until you go to sell) – If you do not do this annually you could end up with a nasty shock & owing a lot of money.

cheers

shnooks

Another reason for not putting your PPoR into a trust is as others have said – Trusts attract Land Tax from $1,- this will include your PPoR. In NSW, as an individual, your PPoR is exempt from Land Tax (unless land is valued over $1.68m)and you only pay Land Tax on the IP’s

Also, from an accounting point of view (unless you were actually going to turn your PPoR into an IP) I suppose it would be better tax wise to keep your investments seperated from your domestic home expenditure, but I could stand to be corrected on this aspect.

Living in Wollongong NSW

Grew up in the southern suburbs of Sydney – family are all still there (only 35 minutes away)

Shnook

Rugbyfan

Is it too late to ask you to email me a copy of the Land Tax/Land rates info also please

brookenbrett.at(symbol).ozemail.com.au

Also, for those of you who are unfamiliar with Land Tax (as I was when I first purchased property) Land tax (in NSW) is done from your investment land holding as at December each year and like normal tax it is up to you to lodge the return. You are not sent any kind of notification or warning that it needs to be done and anything you owe will just keep accumulating until you finally put in a return (I personally did not find out about it until I went to sell an IP & the purchasers solicitor asked for proof that the Land Tax had been paid) I was then hit with 3 years land tax to pay prior to settlement. (Also note this also applies to owners of individual Strata Title Apartments as you own a certain % of the land)

Needless to say I immediatley changed my Solicitor & Accountant as neither of them (who had both been consulted prior to my original property purchase) ever mentioned a word about this thing called “Land Tax”
Just proves that you need a good team about you because “You don’t know what you don’t know![]

cheers
Shnooks

Ooops – sorry about that one my first post didn’t exactly work too well.[]

What I meant to say was Oh my god! your losses were just under 1/2 of my husbands total annual wage.

I am no expert, but I would suggest sacrificing one of your properties to pay back the other debts in an effort to create +c/f in the remaining props. You should then easily be able to use this +c/f to fund more purchases.

I have invested in neg geared property for the past couple of years but only so that I could sell of what I needed to create a +c/f, which is what I have just done.

The accountants on the forum might suggest that you sacrifice the one that creates the least CGT -but covers a large portion of your debt. See what they think

good luck

Brooke