Forum Replies Created
Hi there cia
Just curious as to your main driver to sell it to a trust. I understand the many benefits you can get from a trust structure as have that structure myself as plan one day to move IP’s to an SMSF should super tax concessions remain as they are now.
I had started our buying IP’s in my name and now moving to buying within a trust strructure for that main reason. At my age (mid 30’s) , I did not see much of a benefit on incuring stamp duty to sell to the the trust at this point in time.
My understanding is you are still going to have to distribute that income somewhere as it cannot sit within trust. You may be able to minimise it via a company or other beneficaries.
Anyway, be interested to understand you overall strategy and ideas
Cheers
SimonSimple one. I’d pay down the mortgage and work on paying off the other $50k. At the same time I’d unlock the equity in the current property and look for an area and strategy to invest in property’s using a trust structure.
You’d use the equity loan to fund deposits by gifting it to the trust, and borrow 80% against the property you have chosen. You could also choose to use some of the funds as deposit and only pay off a portion of the loans.
I suggested the first method as you cannot claim interest deductions on a PPOR where as you can on an IP.
Nice problem
Cheers
SimonHi Karl and Rita
Ironically I am looking at the same same process also in North Ipswich with an exact same size corner block.
Your first step is to contact Ipswich City Council and discuss with a planner for you area. They will tell you if your block is subdivideable and also give you some idea on the ease based on where the sewerage is on the block and any additional requirements coucil will have. Generally they will permit blocks as small as 445sqm one a subdivision has occured, and they are quite keen to encourge to detract away from urban sprawl.
I can tell you first hand they are very helpful and appear to be a somewhat fast moving council. My block was given approval within a week of the submission. Sure, that is only the start, but a good sign. We are intending to either sell the land off , relocation a home on it, or even build. The area the block is in is not restricted to character homes or have any real limitations due to mining in the area etc, so there is good opportunity to profit.
Have a look on the web site at http://www.ipswich.qld.gov.au .Its one of the best council web sites I have come across as far as information is concerned.
If you have a look at the Online Planning and Development syster, you will be able to look up your block. I looked up my block and the block across the road (which has been subdivided and built on two years ago) and discovered the UCV total of the two blocks was 160% of my block! This by splitting the block into one of 558sqm and the other 454sqm. This was all before I out in an offer
There are a few options you have. I intend to cost the three processes and then decide which is the best option. I like the house relocation, but it can become quite costly, however I am hoping to achieve this for less than building.
Good luck what ever you decide, and please keep in contact if you are intending to go ahead in the next few month. We can possible learn from each other.
Cheers
SimonI own a property there and have been advised by a local RE agent that a group of investors from the Bunbury area swooped in October 05 and purchased 35 properties estimated at about $3m!
They were aparently well researched and possibly have contacts with a major mine company. They were aware the rental vacancy rates was around 25% at that time, but it did not deter them.
They were aparently intending to furnish some to compete with the caravan park and SPQ (Single Persons Quarters) accomodation market, as well as referb some and offer them to the already oversupplied rental market.
There may well be something going on I hope! In Kambalda there is still a lot of FIFO (fly in, fly out) personal that work on the mines. There is a lack of local labour so this is prevelant at present., but there are some moves to rectify this within the industry. It would only take 30 or 40 people to relocate the permanently for the vacancy rate to drop significantly according to my property manager.
I think there is potential if you can create the right scenario with a long term tenant. Mincor NL is a major miner of nicel in Kambalda and thing are booming at present, and its looking positive for the long term. It is possible that their success will impact on the decision of people to relocate there for a long term stint.
Kambalda remains one of my few speculative IP’s
Cheers
SimonHi Nspeed
Quantifing the reason you want to invest in these area may also help deside if its a good idea or not. I personally think they provide income opportunities for investors more so than capital gains as do own investments in some mining towns that return healthy yeilds. However, I do not expect significant capital gains even in the medium to long term. My intentions to add more value than what I spend and in doing so be able to sell on a lower yield but still attractive to the market. I find it useful to have an entry and exit strategy before considering buying.
It is in my opinion its fairly easy to find information about mining towns and mine life on the internet. If you can find out the mining company involved and access they web site and review regular updated on mines in the area of town you are considering investing in, it might provide you some information to quantify the risk.
There is definitely more risk in buying in these town as others have posted. Speaking to locals is also very useful. You will be surprised what people will tell you if you ask. I would however avoid taking as gospel what those say to you who would financially benefit from you buying in the town. They often paint a picture with rose coloured glasses were other locals are more frank and direct.
Hope this helps. This is my first reply BTW. Hopefully one of many as I create some more time to put back in what I have got out of the forum
Good Luck
Cheers
Simon
