I’m no lawyer… but my understanding (at least in Vic. anyway) was that you could by a property ‘and or nominee’ with the intention of setting up a company and there was no double stamp duty. This avoids the need to incur a cost before beginning.
However I know this flexibility is not available in Qld… the structure must be set up first. Other States? You knows? It would pay to get some legal advice before going to far down the track.
Regards,
Steve McKnight
P.S. Wealth Guardian due to be released early March
**********
Remember that success comes from doing things differently.
**********
Thanks for your post and welcome to the community []
Please note this is NOT financial advice.
If you wanted to invest indirectly in property then you might like to explore the idea of listed (on the Stock Exchange) property trusts.
This would allow you to invest in property and also have liquidity if you decided to sell.
Alternatively, you need to weigh up the amount of risk you are prepared to take on with your savings. I remember only too well the people who had their money with “Pyramid Building Society” trying to eek out an extra 2% only to lose everything.
Me, for my personal funds (as opposed to busines money) I have an e-trade account that earns a pittance, but more than the token amount banks offer.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Welcome to the community and thanks for your post.
quote:
I am in the process of starting a business that can pretty much run itself so i am hoping to earn a few thousand dollars from this venture which i can later put into property investments.
Excellent… do you want to mention what the business is as some community members may be able to help you
quote:
However in the mean time i have around 12k savings and earn around 1100 month. Can anyone advise me on what i can further investigate on purchasing property with the amount of money.
Really? If you can achieve this sort of return (nearly 100% per annum) then I’d forget about property and keep doing what you are doing!
You are earning nearly 100% return per annum!
quote:
Realistically i would be looking at places no more than say $50 000. Has anyone on here started in a similar situation and can assist me.
Well, not wanting to repeat old ground, I suggest you buy FastTrack, which is a tape outline of how my business partner and I began property investing.
quote:
I know i dont earn much yet, im sure there are ways (of which i dont know yet) in which i can start purchasing properties and generating some passive income along the way.
You might like to sell a few of the deals you find to begin with to raise extra cashflow… or alternatively you could joint venture someone so that they pay you for finding a deal and putting it together.
quote:
I would like to generate around $2000 in passive income this year from property.
Excellent. Now you have a goal you can break it down into # of properties needed and then break it down into # needed per month.
quote:
Any one with some advice for a 19 year starting out. I have read just about every post of this forum and have the concept of wraps but i still need to do more investigating.
It’s difficult to post when you don;t ask specific questions. All I can really offer is encouragement and to remind you that the only barrier to success is yourself. Oh, and never take no for an answer.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Welcome to the community and good on your for having the courage to make a post. Thanks also for your kind words.
I have the time for one quick post…
Re: loan provider…
You may find that your existing lender will be happy to help you out, but I would certanily shop around.
The equity that you have allows you to redraw against it to fund the deposits on other investment property, rather than needing cash.
What I am trying to say is…
The question of raising money for a deposit is separate from the question about who to use to finance the property.
You have the deposit issue licked via redrawing (or refinancing) the equity in your property.
The issue of financing… start with your current lender, but it would be wise to shop around as your current lender will probably just process your application for finance like any other.
No harm in trying though.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Sorry, I was not very clear. What I meant was get the accountant to approach his/her clients with the offer on your behalf and earn some kind of commission or trailer.
That’s how financial planning works []
Bye
Steve
**********
Remember that success comes from doing things differently.
**********
Please feel welcome to post more questions, and also replies, in the future.
You ask:
quote:
I’ve sold a property for $40,000 profit. I have owned it for more than a year.
I was told that I had to pay $10,000 in capital gains tax. (50% of half the profit) is this right?? or do I paid tax on 50% of half?
The correct treatment is to take half of the capital gain (in your case, $20,000) and include that in your personal income tax.
The amount of tax that you will pay will depend on what other income you have. If you are already on the top marginal rate, you will pay ($20,000 * 48.5%) of you capital gain in tax.
Please note that depending on when you purchased the property, you might find that the old method of indexation will give a better tax result.
See your tax adviser for more info.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
I know that this topic has been covered in prior topics. Have a search around (use the search feature) and maybe use the words ‘solicitor’ and see what comes up.
Oh dear… might I suggest that you are on the verge of making an expensive mistake? Not because of what you have done, but because of your lack of knowledge about how it works and how to set up an effective structure.
Brent is right to point out about Wealth Guardian, but that is still a month or so away.
In the meantime, I’ll try to help with some of your questions:
quote:
…i am excited about this company and the trust but i dont know to much about it, if it is a seperate adentity what does that mean what can i do with it and what can i get out of it.
Who set up the structure for you? I strongly suggest you go back to them and get answers to your questions. Especially so with your plans to purchase land… do it b4 you buy as it could be expensive to change later on.
quote:
i am about to purches 2 blocks of land through it ,,that, to avoid land tax…
It is illegal to avoid tax. Be careful with your choice of words as it underpins your intention.
quote:
…can i use the eqity once it grows ,would that be like have cash flow in the company…
This is not right. You might be able to access the equity from any capital growth, but to do this you will need to refinance (no easy process), plus, if you use that equity to finance your lifestyle then the interest on the lifestyle related debt will not be deductible.
Understanding this underpins my recurring +ve cashflow focus.
quote:
and also my 20year old, daughter is very keen and <smart> to start in this way , she has a steady job and gets around 36,000 a year so. Can i help her in any way maybe through the company or trust
What kind of help do you want to provide? There is some room for income splitting as your daughter will be on a tax rate of 30% This means that if your marginal tax rate is >30% then it would be better tax-wise to distribute to your daughter rather than to you. BUT!!! This raises all sorts of issues for which you need specific financial advise.
quote:
…all i know is that a company will be good for land tax and thats about all
Hmmmmm…. I wonder why you think this? Could you pls expand as from my knowledge there is no benefit from holding land in a company from a land tax perspective.
quote:
…if any one can give me some pointers i would be most grateful…
Seek advice from a good accountant… quickly! You have a little bit of knowledge that seems to be potentially dangerous.
Good luck…
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
There are a few issues that I’d like to alert you to…
The first is that by seeking investors on this forum puts you at risk of breaching Corporations Law, which has very specific rules about making a public offer for investors.
Given that there are over 5,000 members to the site, you are on uncertain ground about whether or not you need a prospectus. I’d get some legal advice about this.
As for finding investors, I’d start with a closer circle or network of people that you know. For example, you might like to approach your accountant you can put you in touch with high net worth (money rich – time poor) people who might be interested in your terms.
As for what to say… well, as an investor I’d be asking how much in, for how much back, for how much risk? If you could answer these questions and be accurate and honest for what could go wrong… then I think you will go a long way to being equipped to answer questions.
Nevertheless, you will only know what to say after you have been asked a question. Don’t be afraid to say that you haven’t considered something if you don’t know the answer.
My experience shows it’s better to be humble than gung-ho!
Having said this… you must know your core offer and service back to front.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********
Last post for the day as my fingers are starting to hurt from all the typing []
Interest only was just to illustrate the point in the example. Would have required more time to work it out P&I. Personally, all my residential loans are P & I and most of my commercial loans are I/O (I’ll explain why in a newsletter sometime soon).
As for properties… just like the X-Files… they are out there, just start looking in unfamiliar places.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********