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It could be possible to add value, but it would depend on local prices in general and the sort of value you could add. It seems there may be a risk of overcapitalising, ie you could spend $20,000 to find it only increases in value by $10,000.
It would be safer to find a run down one to do up.
Terryw
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I’d probably do something similar.
Have you considered just buying the girlfriend out? Save stamp duty and costs.
Terryw
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North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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I also noticed that RAMS now have an additional mortgage insurance company on their panel, ie a third one. So this may help people maxing out.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
try solicitor Tony Cordato http://www.businesslawyer.com.au
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Start your own religion! Think of the tax exemptions.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sounds like a good plan. Paying it down as fast as possible, while adding value will give you equity quicker. You can then use this to purchase your next one and so on.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The trouble with selling property is the costs and taxed invovled not to mention the loss of any future capital gains.
For anyone wanting to research this further, there is a licenced financial planner, Steve Navra, who could possibly help. see: http://www.navra.com.au
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Wrapping has received a lot of bad press lately, be careful.
There have been a number of people who have wrapped in Sydney and made money. I have wrapped myself, but have found that the returns are not that great for the risk involved and the opportunity cost of tying up equity and borrowing capacity.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
That almost sounds like it was pleasant. It is a bit different what we imagine it would be like.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I think it would be – do you have a copy?
Terryw
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Having around $1.6mil in property securing a $300,000 loan is a bit much.
I would look at borrowing against your home as a separate loan and using this as deposit for the investment property. That will give you flexibility if you wish to purchase more property in the future.
It would also be safer, as if you were to default on your investment property, the lender could not automatically take your home – unless with the same bank.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes talk to a solicitor. You cold put various clauses in the contract, but these may make it unattractive to the vendors.
Terryw
Discover Home Loans
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I am not a tax expert, but I beleive you do not necessarily have to pay tax on inherited property.
Was the property your Aunt’s PPOR? If so, I think you could sell within 2 years and pay not have to pay the CGT.
Also, even if it was an investment property, CGT may not apply if she had purchased it prior to 1985.
Since there are potential large sums involved it would be wise for you to talk to an accountant before you do anything.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I agree that living on equity will not be for everybody and will be a dangerous strategy for some people.
Having a small portfolio of property is sometimes enough for someone to argue they are self employed – without the need for an ABN. I have personally helped a client get a few no doc loans (without lying), when they were in a situation like this.
On No doc loans there is not need to list an income. These are basically asset lends, where the lender is mainly concerned with the security, rather than the borrower.
We cannot predict the future, all we can do is base our assumptions on what can be done at present, and assume this will always be the case. But you are right, things can and will change. These products may not be around, but then again there may be even better products around then.
A person with a large portfoli may be getting a lot of money in rent, but they may still be paying a lot in interest and have not much left over. Plenty of people are asset rich and income poor.
What about someone on the pension with a $1mil home fully paid off. Surely drawing a small amount each year to improve lifestyle would not be such a bad thing if it is done correctly and the property is growing, on average, at a faster rate than consumption.
I, too, would love to hear from anyone actually living off equity.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Rob
I have never known anyone to be audited. What was the experience like?
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
By ‘retired’ I don’t mean living on a pension.
Having a large property portfolio would mean one would be a professional investor. There are various loans that would suit an investor. Including the many No Doc loans. A person self employed for one day could also qualify.
Hopefully the overall LVR would not be that high, so getting loans should not be a problem.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I am a fan of living off equity. I am not doing it, and haven’t done it, but it sounds good in theory.
They way I would suggest you look at is to build up a large portfolio of property while working, then after a few years you could ‘retire’ by living off a percentage of your capital growth.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Originally posted by Stuart Wemyss:Yes, you could have a loan in the trusts name and a security in your personal name.
However, it wouldn’t make much sense from a tax perspective. Run this past your accountant.
Cheers
Stu
Stu
What about if a person had a unencumbered property. He then started up a trust and got a loan secured against this property in the trust’s name. You are essentially letting the trust use your personal equity.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Yes. I trust can run a business. However, asset protection will depend on who is being sued. eg. if the trust is running the business and the business is sued, then having a trust won’t protect other assets in that trust.
But if you are personally sued, then your trust assets may be safe.
A trust can also help minimise tax with property too.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You could possibly claim the seminar (or part of it) if it was related to your current earning capacity.
see also this post:
https://www.propertyinvesting.com/forum/topic/17506.htmlTerryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
