Forum Replies Created
Robert
I thought the $50K level was the point at which it was compulsory to register for GST.
All enterprises (as determined by ATO) should have an ABN, even if income is less than $50K.SMTM
All
50% liquidated damages is standard on REIWA Residential Lease Agreements where the owner terminates the agreement prior to expiration. Clause 15 from memory?
Is it different in other states?SMTM
Hi Arthur
I would suggest visiting the ATO website. Basically if you are operating an enterprise then you need an ABN.
Regards
SMTM
Hi Bonnie
Recently changed a PM. Gave a months notice in writing and had to pay 50% of the management fees that would have been due had the agreement run it’s full term.
The new agent picked up the bill for this.
This was in WARegards
SMTM
Hi Rooinek
Commercial property yields can appear tempting, especially alongside the average residential yield at the moment.
However you need to be aware that investing in commercial property is a different proposition to investing in residential real estate.
For starters your tenant will be a business and if you are a small investor then most likely the business will be a small or new business as opposed to a government or large corporation. The chances of the business failing would be high and you could be left with a vacant property, often for long periods of time if the economic conditions are poor or your property is of limited appeal.
Banks will lend you less money for a commercial property so you will need to find a larger deposit from elsewhere.
There are also other factors such as GST payable on purchase of commercial property unless it is “a going concern”.
That said, some benefits are a higher yield (generally) and also that the tenants will often pay some or all of the outgoings.
Hope I haven’t put you off the idea completely but just alerted you to do more research and don’t be tempted by yields alone.Regards
SMTMAll
Landtax what a rip off! This year our land tax bill reached over $10,000. This is due to the exponential increase in rate as the number and hence aggregate value of all properties held increases.
We cannot afford to hold any longer and so are forced to sell down. Sure the capital values have increased but the cashflow does not support this sort of financial impost.
Passing this cost onto tenants is a nice idea but not practical. The rents would need to rise about 25%!
If there really has to be a Land Tax then I believe it should be levied on a property by property basis, not aggregate value. I won’t be holding my breath waiting for that one.
Sometimes I think the government would prefer that we don’t provide for our own retirement.SMTM
waprincess
Just as the others have said, do not sign with this woman. You owe her nothing and she is not your friend.
Get a proper valuation. It will cost you a little but save you a lot.
Then find another agent. He or she should be able to substantiate their suggested listing price with comparable sales evidence.
Remember it is your money.Regards
SMTMJulia
Thanks for that.
SMTM
Hi All
My opinion of Perth residential in general is that it is not a place to invest in the next couple of years. I feel there are too many investors and too few tenants and that there will be downward pressure on sale prices in the short to medium term.
Of course there will be localised exceptions and isolated hotspots but overall I am pessimistic.
Have recently had to drop rent from $260 PW to $230 PW to get a tenant in Mt Pleasant. Why? Because there are now a bunch of newer and shinier places available asking the same rent.
This leads me to the point often raised by proponents of only CF+ about capital gains not being guaranteed, well neither is cashflow.
In my hometown (Mandurah) the market has basically split in two, with waterfront and premium properties continuing to be in demand whereas the more average properties are now not selling.
I firmly believe that to buy now with a yield of between 2% and 4% and hope for short term capital growth is a rather risky proposition.
Commuting to and from work, I pass through Darwin a fair bit and think it is worthy of consideration. The LNG plant (Conoco Philips) and Blacktip gas project (Woodside) offer some upside potential and if Sunrise ever gets the nod?!Well that’s my thoughts, back to work.
SMTM
Hi Mel
Yes getting an accountant we both feel comfortable with is a problem which causes a lot of grief at times. Hoping for a resolution sooner rather than later.
My wife’s accountant was making the point that if the kids have been to uni and done any good then they will most likely be earning good income straight away and hence would not be any value in distributing money to them.
When he suggested that the asset protection was not what it was cracked up to be I sent a quick email to Dale GG about it. Without knowing all the facts his reply was that we should have set up with the “at risk” person as secretary of the trustee company and the “not at risk” person as director. Our setup is both of us as directors.
I do suspect that my wife’s accountant was a little put out that he didn’t get the business so perhaps that had something to do with his hostility.
Anyhow what’s done is done.Regards
SMTM
Hi Mel
Yes I thought I had done my homework but as with many things the devil is in the detail.
Regards
SMTM
Hi Glenn
Thanks for the reply. Well spelled out and concurs with what I have since read minus the legal babble.
Regards
SMTM
Hi
Derek’s link will give you precise figures but for a quick estimate when out on the road I use a figure of 5% of purchase price.
Regards
SMTMHi
Yes have read all those books and many more. A discretionary trust and a “family trust” are not the same thing, although a discretionary trust will often be called a family trust. Once a family trust election has been made treatment of losses, franked dividends etc changes. The range of beneficiaries is limited also and any distribution to a person or entity outside of this range attracts a 48.5% tax.
Would be interested to hear from anyone with experience in this matter.
With respect to hybrid trusts well yes they sound attractive but it is a little late to change now.Regards
SMTM
Hi All
We recently set up a discretionary trust through my accountant with a corporate trustee, wife and I as directors.
I was feeling quite the professional until my wife’s accountant asked why we had done it. I explained about asset protection and flexibility to distribute income down the track etc. He was quite blunt and suggested we had wasted our money and created a bit of a mess. He basically believed we would have no real protection and that we would get about 3 years where we could distribute money to our children with any benefit.
Allowing for the possibility that he was a bit put out that my accountant set it up I must say it left me wondering whether we had done the right thing.
Why do we have separate accountants I hear you ask? Well I don’t like hers and she doesn’t like mine. A bit of a standoff.
Make sure it is absolutely the best structure for your situation before committing is my advice.Regards
SMTMHi
Recently paid $2200 for a house of approx 160m2 to have all the walls patched, ceilings and walls painted.
Considering how long it took the bloke I think it was good value.SMTM
Benson
I had a similar situation last year. I wanted an extra $20 pw on top of $240 pw rent for ducted evap system however we ended up agreeing on $10 pw. System cost $3399 so a 14.7% return on money spent and the tenants stayed on.
SMTM
Freedom3
Haven’t been to his workshop but met him on the Hanna Development course a few years back. Seems a genuine no frills kind of bloke so I imagine he would deal in facts and not pizzaz.
He has done his own developments, over 40 I think, so shhould be worthwhile to learn from.Regards
SMTMOne of the real benefits of OT is that you will develop magnificent thigh muscles from standing up and clapping each and every speaker. The weekend get togethers are the best, a real solid workout [
].Hello Nangunia
I am not sure whether to buy a block of land which I can build two townhouses or start with buying something under $100,000 and renting out for about $150.00.If your intention was to buy the land, build the townhouses then keep the dwellings and rent out then the answer would be that you are better off buying something already built. It will take 18 months to get them finished which will cost you money in interest and rates etc.
If you believe you can build and sell them and make a profit then yes go ahead. You will need to be fairly sure of making a good profit though to cover your risk.The fees incurred with banks application, search, stamp duty are they all tax deductable?The loan application costs are claimed over 5 years unless you take out a shorter loan. Stamp duty is added to the cost base of your property for CGT calculations.
If I buy a property do I need a quantity surveyor to list all depreciable items including the building or can your account do that for you?Engaging a quantity surveyor is a worthwhile exercise as they will prepare a full schedule for you and get all the depreciation allowances you are entitled to. Not all accountants are knowledgeable in this area.
I don’t know whether I should buy in my neighbourhood or try further afield?Depends on your neighbourhood really. If it’s a good area and you know it well then it’s probably a good place to start.
Regards
SMTM
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