Forum Replies Created
Hi Jman
I attended an off site auction last week at Charlestown NSW (near Newcastle) it was held in a funtion room at a large hotel,i understand they use this venue for all their commercial auctions (Ray White).
They had a mix of about 12 properties for sale residential, commercial etc but only one "garage conveinience store" sold on the night, all properties received bids but all failed to meet their reserves.Goodluck
TrustieNot far from settling on this property, just waiting for the Real Estate to get back to me re my final offer, any comments on the above questions are still welcome.
This is a great site for knowledge, I just love it.
Thanks everyoneRe my last post above
Council now tells me (a different Town Planner) all is ok with this property and everything on the site is approved as it stands today.
Its amazing you know, you ring these places (councils) for clarification and many times you get conflicting answers, this can be a difficult process at any time without getting the wrong info from people who are supposed to be in these postions to assist with enquiries, all the more reason to do your homework i guess.If i proceed with this purchase would i get much/any depreciation on the property because of its age at least 40 years old
some other details are, not sure what info is relevant.1. My salary 52k
2. Purchase price 240k
3. Borrowing 200k
4. Rent return annually 15k
5. Standard outgoings,insur,agent fee, repairs etc.Also can someone recommend a software program so i can log all financial information re an IP for record purposes.
Thanks Bob, Scott, AAq
Your replies are very much appreciated.
It now appears from further research that this property is zoned for its current use (dual occupancy) however the building has not been council approved to use it in this manner ie 2 flats, it also seems that it has been this way for 10-20 -30 years by consecutive owners just letting it out this way, the building is possibly 40 to 50 years old.
On inspection by a close friend (a builder) who lives in the area, the house has no fire rated walls, no deviding brick wall under the house etc.
My concern now is what to offer the agent seeing that there is an unknown cost (due to my inexperience in knowing whats fully required) to make the property compliant.The person who owns this property is also the Real Estate agent who is selling it,& initialy told me it is council approved for this activity, but my research has told me the land is but the dwelling isnt. (that info came from the council during my research)
I was really interested in this place at 6.25% gross return, but this wont be the case if making it council compliant is a costly exercise.
How do i determine costs without spending too much at this stage.Any further comments please.
BuilderBob wrote:My dad just died from Asbestos so please be very careful.
Asbestos in the home can kill!
I've owned property with asbestos roofing and found it difficult to re-sell .
I'm unsure what state you are in but I'm fairly sure they have set a time period for all asbestos roofing is to be removed in QLD
I know commercial property has a far earlier date and housing is a fair few years after.
As for the sheeting being damaged from hail I highly doubt that.If I had my time again I would avoid the abestos roof just from experience with my last two that had it.
And the more time ticks on the close the deadline to replace will arrive then you will be up for some huge costs.I am located in NSW Central Coast, I am unaware of any time frame by this state government or ruling about replacing Asbestos roofing in this state but I will investigate it further now thanks to your reply.
Thanks Builder Bob.
masond wrote:Hello everyone,First off im young and this is just the start of my homework so please bare with me. Situated in W.A and attending uni, at the moment I don't have enough income to support loan repayments so i have a 3 year plan. This involves finishing my degree in commerce and business law hopefully have 20/30k saved and then have a steady income hopefully of a reasonable level. Ideas im toying with at the moment with some close friends is pooling our resources and getting some properties and renting them out. I'm going to make a huge assumption and suggest that maybe forming a company would be the way to go here? If so can anyone recommend a source of information to get started looking at how everything works (securing loans, voting rights and making repayments etc.) and if it isnt the way to go please stop me from wasting precious time researching it! All your time and efforts are greatly appreciated. Thank you.
I too have asked this similar question, you might like to look at my replies from other members.
Good luck with it all.Thanks d_angstestra for you imput too,did Chan & Taylor elaborate why a trust should be set up in the begginning?
At the end of the day there must be a more "correct" way to begin this venture that will give asset protection and liability protection.
obviously cost are a concern but protection to me is a bigger concern. (but not at any costs though)
Is there anyone out there who has several investment properties and what path did you take ie, trusts,company structure,sole trader,other.
Thanks again to all who contribute it is appreciated.Trustie
So is there a right or wrong way to hold several properties to maximise your returns and reduce your exposure to liability/ risk, or is it not clear cut because of so many variables.
With so many people holding many properties in their portfolios i wonder how they /most would approach this situation.
Thanks for your valuable imput Terry.Terryw wrote:HiIn NSW Land Tax is 1.6% of the land value. Individuals get an exemption on the first $350,000 (approx) of land. But trusts don't get this exemption (except special trusts such as some unit trusts). So if you have a $350,000 property (land value) in a trust it will cost you $5,600 per year extra. That is a lot of money.
Trusts need annual tax returns done. But if you think about it, there is not much extra work at all. If you purchased a property in your own name, the accountant would need to take this into account anyway. It is just a matter of them filling in the details on the trust tax return rather than your own. Not much work at all, but they will probably claim it is!
If you purchase via a trust you cannot get the FHOG for this property, but may be able to get it in the future for one in your own name.
To learn more about trusts search the web and read as much as possible. There is a good book called "Trust Magic" by Dale Gatherum Goss which is easy to understand and there are some good websites such as http://www.taxlawyers.com.au ; http://www.lawcentral.com.au etc
$5600 extra is a lot of extra tax isnt it, after all i only want to protect my assets as they grow, maybe having a company structure will be ok.
thanks Terry for the info, I will take your lead and investigate the websites you gave me.
Sometimes it seems that governments,councils,authorities etc put so many things in place that always has a large cost to it .
I feel like if you/me make any money they want it..Thanks Terry & Good luck.
Terryw wrote:1. yes
2. no – depends though on who you use
3. accountantOther things to think about:
a) trusts often have to pay much more land tax
b) Losses cannot be offset against your personal incomeTerry Do you know how much more the land tax rate may be (percentage terms), i am interested in NSW only,
Do i assume that the trusts accounts are audited annually by my tax accountant and the returns are sent to the tax office just like any other business/company.
As well as this forum, where can i find out more about property trusts prior to going to an accountant.
Also would i be entitled to the FHOG if i bought my first property through a trust (I will live in it for the first 6 months) then move back home with my parents,(where i always have lived)Thanks Terry
Thanks Millions for that Information and i will certainly follow up the links you sent.
Being only a few minutes to existing railway,buses,and freeways and Parramatta city & Westmead Hospital makes me think that as time goes by, the more land means possibly more accomodation will be needed for this area ,and i suppose the fact that a neighbour is selling (been there for 33years) I should try and not lose an opportunity if its there to be had,but of course I need to do my homework hence why i am on this site,as i am aware of the knowledge that i can learn just by asking the right people/forum
Many Thanks
TrustieThank you Tammy & Lalibella & previous posters.
It was good to know that Pendle Hill may get a 7% grothe rate in this upcoming year, i was a bit concerned about the grothe because of the recent/predicted slump in house prices in Blactown which is a nearby suburb , and some other outer Sydney suburbs are also tipped to struggle, I said rent of $400.00 per week because i wanted to be conservative i suppose to allow for any surprises.
Can i have some feedback please.
If my daughter buys the next door property in her name fully (so she can get the first home owners grant) but the loan $360k is in my wife & my daughters name as they both work) can all the interest paid by them on this loan be tax deductable or negatively geared seeing that the my daughters name only will be on the title deeds, but both names will be on the loan documents.Thanks again everyone.
Thanks for the replies folks, I read them with great interest.
If land is the thing that appreciates over time and my daughter can get a fair return from this next door property with its granney flat as well , it seems to me buying it will be a good investment as each block will gain off each other because they have a bigger land area 1600m2 that can be developed later, if this is not always the case can someone please let me know.
Interest rates rising constantly has to be a big concern though, I know rent can rise to a point but putting the rent up often if rates keep going up will obviously be difficult as tennants only have so much deposible funds as well to use.
How could i find out if this area has actually gone up or gone down in value over the last 1,2 or 3 years.
PS all posts welcome both positive & negative as it helps me paint a better picture of things.
Thanks Again
TrustieThanks Tammie
Your reply was welcomed very much, I will speak to my council and find out the zoning, at the moment around me exists mostly town houses,villas,duplex type buildings.
If the place is rented my daughter will be fine with some debt if it means some gains down the track.
It is very difficult to get into the market if you are young even though she is a saver.Thanks again Trustie
tammy wrote:Hi Trustie,
Just a few thoughts.
What is the zoning of the blocks? You can find this out from council who will also be able to advise the density level (ie how many per area). This will help evaluate the development potential. Have a look at what is currently being developed in your area, what sale prices the end dwelling are getting, what prices current listings with "development" tag lines are on offer for. Dont be afraid of ringing up your local REA and asking their opinion of what is available (hey you can always say you are looking for development potentials!). If it points to there being a valid development opportunity in combining the two blocks you may be well placed to take advantage of the neighbour selling. Of course, consideration must be given to the ability to rent the property out in the meantime. If your daughter has the surplus funds and is secure with the thought of capital gain, great, if it is going to be a struggle then the possible future gain may not be worth the pain.
It certainly sounds well worth investigating further and I hope it all goes well for you all.
Kind Regards
Tammy
