Yeah, if I’m reading the post right, and you are asking how you can prove you lived in a house as a home when you didn’t, then I’m totally uncomfortable making a declaration that you know to be false. That’s straight tax-avoidance. Also gaining a financial advantage by deception. Just pay the tax and give thanks you live in a country like Australia where your contribution goes to making us what we are.

Not sure how much lower interest rates can go. And if investors can’t make money where they are now, then there probably isn’t much hope that they’ll do better at 100bp lower.

– Steve

Okay, I’m not a conspiracy theorist, but I have to admit to some serious reservations about downloading an untested app, without sufficient privacy laws in place now, and with a government that is making policy up on the run who is bribing us to download the app with promises of ‘we will let you all out of lockdown sooner if you have it.’

This government isn’t high in trust stakes after the bushfire response. Trust needs to be earned, not given.

– Steve

Hmmmm. Even with the ‘brakes’ eased, the increasing loan book risk is likely to cause lenders to lower LVRs and increase credit qualifying criteria.

Beyond that, is getting into more debt really the answer? Short term fix for long term pain.

– Steve

Hi there,

As outlined below, your company will need a registered office (CORPORATIONS ACT 2001 – SECT 142), which must be a physical address (i.e. where notices can be sent). It cannot be a PO Box (CORPORATIONS ACT 2001 – SECT 100 (c)), but it can be a home address.

The requirements of a Registered Office are (CORPORATIONS ACT 2001 – SECT 144) are:

Company’s name must be displayed at registered office etc.

(1) A company must display its name prominently at every place at which the company carries on business and that is open to the public. (2) A public company must also display its name and the words “Registered Office” prominently at its registered office.

Interestingly, CORPORATIONS ACT 2001 – SECT 145 goes on to say that only a public company needs to be open to the public.

So, it seems that a registered premises for a PTY LTD company needs to identify that it is such, but need not be open to the public.

If you don’t want to use your home address, and you don’t have an ‘office’ address, the common practice is to nominate the office of your accountant or solicitor. Note that you should have written permission for this arrangement. See CORPORATIONS ACT 2001 – SECT 100.

Assuming you are on good terms with your adviser, you shouldn’t need to pay anything.

All the best,

– Steve

• This reply was modified 4 years, 9 months ago by  Steve McKnight.

Yes, that’s right. There is no ‘agreed’ industry-wide protocol for what expenses are included, and what are excluded, so the calculation cannot be applied comparatively with accuracy.

Heck – that’s a lot of big words in one sentence. Just had my morning coffee and it shows.

:-)

– Steve

Thanks for posting the question.

It is an interesting one and, without being a lawyer or offering advice, seems to be a matter of providing a safe place for your tenant to reside. If the asbestos is unsafe in its current condition, then I it would seem logical that the owner has responsibility for removing it safely.

Of course, if the tenant was responsible for putting it there, or ‘disturbing it’ so as to now make it unsafe (whereas before it was safe), it might be a different issue.

And then there is the humanity aspect to this. Would I want anything in my property that was a known risk to someone renting it? No. I’d quickly and promptly and safely get it gone.

All that said, if you are in any doubt then a call to the relevant tenancy dispute helpline in your State would be worthwhile to see what the protocol is. You might also want to have an ‘informal’ chat with your insurance company.

Regards,

– Steve

Properties in regional areas tend to be more income orientated than growth orientated, but of course that is a generality, not a rule. Student accommodation is definitely an income maximisation strategy though.

Some questions I would work through:

a. Who is going to manage it, and at what cost?
b. Who is going to buy it off you? It will need to be another investor? How will you add value or create a compelling investment opportunity to achieve your exit?
c. With a 10 year horizon, and with a growth focus and a passive mindset, might you be better off with the classic “worst house, in the best street, in the best suburb you can afford” approach?

The approach I advocate today is this:

a. Spend less than you earn to create savings (or cash surplus)
b. Use the surplus as capital to invest
c. Invest for growth – either active and quick turn, or passive and generic growth
d. Once you have accumulated enough capital, redeploy to income (commercial property)

Regards,

– Steve

• This reply was modified 5 years, 4 months ago by  Steve McKnight.

Hi Flynn,

In the US there is what is called a 1031 like kind exchange, where you can roll a property’s realised gain in to another purchase. Australia does not have such laws, although there is capital gains tax rollover relief if you sell a business (in some circumstances).

To answer your other questions…

Is now a good time?

Well, it depends on your approach, in addition to your level of skill and experience. Now is a poor time if you are speculating and low on skill, but if you are educated and experienced, then there are always opportunities to make money.

1% rule

Once you find a property that meets the 1% rule then you need to do further due diligence on the property to make sure the information you’ve been given, and you discover, supports the purchase. I have a resource called STEPS that walks you though the 12 STEPS process for how I recommend you complete due diligence on a property acquisition.

Utilities

Different jurisdictions have different rules. Make sure you know what the rules are in your investing area.

Offer Price

You should offer a price that is commensurate with the risk, and allows you to make your required return.

Bye,

– Steve

• This reply was modified 5 years, 4 months ago by  Steve McKnight.

Kade wrote:

I have been advised that the best option would be to invest in my personal name as it is easier to borrow and trusts do not necessarily have any tax benefits.

An accounting structure summarises the way you own and control your wealth. The two options, from a high level, are: in your own name, in another entity (that you control).

The right structure is one that allows you to minimise your tax, maximise your asset protection, within the budget you have available to set it up and run it, and appropriate for your wealth creation plans.

As you can imagine, that last paragraph permits a variety of scenarios to all be both right and wrong, depending on the individual.

Owning real estate in your own name is definitely the cheapest option as far as set up and ongoing costs, but it comes with the lowest tax minimisation and asset protection options, and it also makes it very hard to scale. That said, if you want to negatively gear, then it is the best option available so you can offset the property net rental loss against your salary income (and with the Libs now returned there is no risk of this changing in the next few years).

Hope this has helped.

– Steve