Yes, that is a potential draw back. But at least you will not have to pay the CGT until you lodge a tax return – and that could be years away

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Why doesn’t it seem right?

I have clients who have used the Cleardocs trust deed. It is nice and cheap and appears to be OK, but as Cata mentioned, you could mess things up or get into trouble if you don’t know how to set them up.

eg. a client of mine made his son Settlor. This means his son can never be a beneficiary of his trust – not an ideal situation!

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You cannot claim them in this years return because your incomes will be different and this will result in different tax savings. You would have to do an amended assessment for the year they belong to. How much are you looking at here? It may be worth more hassle than savings.

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Hi Michelle

RAMS use
– PMI
– Genworth
– Prime

Macquarie Mortgages use
– PMI
– Prime

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I look at the yield first thing:

Rent / price
$13700/$140,000
= 9.8%

This looks good at first sight, but the rent assumes 100% occupancy, and does not include the management fees which are often high in these sorts of places.

You would have to put up $35,000. But would get back $540.

Prospects for capital growth would possibly be low because of the general market at the momemnt, and that fact that Student accomodation is very hard to sell.

If you put this $35K in an ING account, you would get more, about 4 times more.

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Hi Condog

A solicitor I spoke to suggested just adding up all these expenses, and make the rent more to begin with. This should get around that problem. But you could only do this if the market would wear it.

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Hi pwarde

If you have sold the properties via installment contracts, then you cannot increase the loans to access the equity – the equity is not yours.

If LOs, then it may be possible, but you have to be careful you don’t borrow more than the tenant will be buying the property for.

If you have run out of capital, then you will have to save more, start working or just wait for someone to cash you out – but by then you will have noticed prices have increased, and you will need even more deposit for the next one.

Getting 8 properties in 6 months is a very good start. I think Steve was only able to do so many because him and Dave were still working in their accountancy practice in the early days.

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I would say there is not just one market, but many markets in Australia. Look at Perth and Sydney for example. And even within cities, there are different suburbs at different stages of the cycle. So it may be a bit hard to generalise too much.

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All you need is 20% deposit to get started using a No Doc loan. Maybe you could talk to your parents about lending you this money – if you feel comfortable.

ps. Did Peter Spann really give you $10mil in 10 years?

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You have to be very careful with FPs, they can hinder your wealth creation.

Terryw
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