Forum Replies Created
Hi funksta
I also am a Licensed Financial Planner like Richard. This sounds very much like something I have been approached by developers to assist the sale of their properties.
And yes they offered real estate commission if I found a buyer.
I of course have not done this. However if it is Lowood you are talking about the area does seem like it has got a lot of opportunity. There is major government infrastructure going in at Ripley not far away, health centres etc. This is the targeted "Western Corridor" development plan. There is also a large Woolworths going in as well – they generally tend to know where to put a store.
Oversupply could be an issue in the short term.
Never be suckered by rental guarantees.
The development I have heard about does have a "local strip shop" going in and medical centre. At least this is what I have been told.
This development was on the road between Lowood and Gatton – quite a busy road. There is the new jail and other government infrastructure at Gatton – my wife works for project services Qld Government – lots on the cards depending on the politics of course!!
House and land packages are always more risky – you don't know what "marketing premium" has been built into the property price.
In the end in comes down to your financing capability and as Newbi said – factor in the single income issue if the pitter patter is in the plan (it is always a chance anyway!).
Who knows – maybe watch for the old houses that aren't so interesting after the new ones come on line!
Be sure to keep the emotion out of property purchases – it is an investment – not somewhere for you to live.
Out of interest, did you pay for your advice from the financial planner? Be prepared to pay for advice if you want it to be independant – and please read the advice in full including the "disclosure area" where it sets out fees, commissions etc. If the adviser was to get commission it should have been disclosed in your advice.
Any other general queries please feel free to email me at [email protected].
Hi
The issue is what property the banks are willing to take as security and cross over legal issues.
I have a client who is a tax resident of Japan who was able to borrow Yen loan for properties but that was because he was on a working visa there and had some Japanese land as security.
You would have to have people that know you well in the foreign banks or they wouldn't touch you.
Yes, there are some possibilities but you need to know how to play their game.
Hi Pilbara Boy
You have some great opportunities in your situation.
There are some interesting strategies to consider in your situation with one income, renting somewhere that might not be your long term residence ( you can own a Principal Place of residence and rent somewhere else when on a contract etc.
Managing the Family Tax Benefits etc might also be an issue for you.
You have might the right decision to get on track.
The false luxury life is common problem so don't be too hard on yourself!
Are you strictly an employee or contractor?
I have clients all over the place even in Japan – don't let distance be an issue.
If you are interested in exploring some general directions send me an email.
In your situation you have a great opporunity to get ahead and leave the other "false luxury" people to eat your dust.
Onwards and upwards!
PS don't forget to spend some time with the kids while they're are young – priceless experieces to be had!
Hi
Can try Alyson from ARB Accounting at Sherwood – have been impressed by her.
Hi
If you are treated as a property trader you might have to be wary of GST potentially as well depending on the types of properties.
Remember to this is more speculation that investing – higher risk.
Hi
FTB is based on earnings including investment earnings – Part A on joint earnings – Part B on lowest earner level of assessable income. Things like which name to invest in etc are issues to consider.
Interest on $100K would be about $8500 (8 1/2%) if you find the right term deposit.
Of course there are many options to change the way the income is taken into account depending on your family situation etc.
If you have paid off your house and have $100K there are some great opportunities for you to leap frog into serious sustainable wealth creation. Do you have children – A family trust might be an opportunity. Are you closer to retirement – super might be an option.
If you want to shoot me an email with a bit more info and I can expand.
You have a great opportunity hear be careful want you do with it.
Just checking – how long was it between inheriting and selling? There might be capital gains tax issues – your cost base is the value at time of inheritance. Need to take this into account.
Hi
As you have significant equity depending on the current ownership structure EG: joint etc there may be some options to increase the tax deductible portion of the loan.
If you redraw to use it on the new PPOR it will not be tax deductible even if the loan is secured against your current property. Deductibility relates to the use of the funds redrawn.
Depending on the current ownership and your income situation eg: employed or business owner etc there may be ownership change options to release the money to use for new PPOR and have the debt tax deductible.
Give me a bit more detail and I'll expand.
Alternatively email me at [email protected]
Hi
The biggest issue I see with some property investors is becoming to emotionally attached to both the property and the tenants. Spend your time earning income to fund your next property venture rather than get tied up with the ins and outs of dealing directly with the tenant. Time is money – a good property manager makes the investment more passive.
Hope this helps in making your decisions.
Hi Flange
Whose trust is it? The profit distribution is a "paper distribution" of the profits made by the trust. The actual money rarely gets physically distributed to the beneficiary – of course they are actually legally entitled to the money if the trust actually exists now and if there is money to pay it out. First thing is find out who the trustees were and hunt down what has happened since that time. Seek legal advice – the trustees would be liable for the amount owed to your daughter.
Hope this helps.
Hi
First rule – never mention tax minimisation as the reason for doing anything!
Second – are you borrowing to fund the purchase? Any tax losses (negative gearing) in the trust will be locked in – can't distribute losses to offset other income.
Third – youcan't funnel employee income through a trust – however if you are in business and have a dicretionary family trust running the business you may be able to distribute income through the second investment discretionary trust to soak up tax losses.
You NEED to seek professional advice as to why a trust structure could be beneficial – usually to protect the investments from being attacked by creditors of a business etc.
Hope this helps but don't rely on this – pay for some professional advice!
kaus wrote:I am on gross $35K after salary sacrifice, partner casual gross 28K, i bought IP in Lidcombe sydney in late 2003 for $430K + expenses=$450K total cost with 100% loan.
Currently i get rent $275p/w , current value of IP is $400K , it is run down , no improvement can be done except re-build house.
You better hope someone wants to pay you big bucks for the land value to redevelop. Whoever lent you the money should be shot! Your current gross rental return is 3% take of costs lucky to be 1%, take off interest – about -8% so yes at best your getting negative 6% per annum!!
You better hope you don't get sick or the tenant doesn't leave!
I am a financial adviser -I would get sued if I had given you the advice to do what you did on your income – I would call it severely over committed – surely you would have known that they house was a write off at the start?
Hi
I have a few people that might be interested in a coffee and general discussion – be prepared for distinct opinions!
Send me an email at [email protected] and we can sort something out.
Scamp wrote:Another free tip : the real value of your house is what you can sell it for : Not what banks tell you.
If a fool buys it for 500.000, then it does NOT mean it's 'worth' 500.000. It just means it's worth whatever the NEXT fool will give you for the house ( that might be 1.000.000 or 200.000 ). Seeing that fools are running low on money, you can bet that property prices aren't going up , but down.There are two sorts of property owners out there – the over committed (wait for the bargains, they will come – we haven't seen the half of it yet!) and the ones that would sell their mother before selling their property. These will ride out the stupid stuff and keep accumulating wealth.
The problem for many is their over willingness to spend tommorrows money today on frivilous BS using 100% loans and credit cards.
I remember renovating our first home – lived in it as was (worst house in a good street) with the bathroom vanity hanging off the wall shaving in a bucket for at least 6 months whilst accumulating capital to continue renovations. The "MUST HAVE NOW – AT ANY COST" is what brings people undone. We are already seeing businesses shed staff and some have even closed down. The MINING BOOM cant carry everything!!.
People BINGE and then CRASH DIET and then BINGE again – welcome to the bull and bear markets. Buy reasonable yield properties or shares and keep doing it. The more income you have the more investments you can make and become less reliant on your own personal exertion to fund living!
By the way – to many think that because the bank johnies say they CAN do something then it must be the RIGHT thing to do! Yeah right!! Not all, they want you over a barrel so all you can do is pay the minimum repayments for the rest of your life.
Remember – high NET worth – not high assets high debt!
pksmith wrote:As you would be aware I would like to increase the loan which has tax benefits and decrease the non tax benefits loan. To make it more complicated I presently access a rural/remote housing assistance which allows 50% of the Home Loan interest to be salary package (through the public health service).
Even if you get the 50% salary packaging benefit you want it to be 50% of the lowest non deductible interest amount possible. Also what sort of investment time period are you considering holding the investment property – to see if is worth the transaction costs of transferring part of ownership.
Are you a doctor? If so what professional liability risk do you have – this would also affect choice of ownership structure.
Triggerman wrote:Thanks Richard, Can I use the fortnightly payments that I made to the bank to finance the deposit for an IP/ new home considering that I've only been here since Nov. 2007? Will there be any tax issues? How much is the adjusted premium?
You will have to be careful of stamp duty charges – bought as PPOR – exemption would have been received – check the time required to pass before change of use doesn't require repayment of exemption.
CGT in future when property sold – either apportionment time as PPOR vs time as investment – obviously will be mostly investment if you continue to hold the property – or get a few valuation appraisals to determine "investment purchase price" at point of change of use.
Remember to change the insurance from owner occupier to landlords insurance.
Depending on your overall situation could consider sale of first property to a trust with you and family as beneficiaries to release as much equity for PPOR purchase to make sure minimum non deductible debt. This will very clearly make the change of use – however stamp duty as investment property payable.
Hi
My plans are help more of my clients to accumulate wealth taking advantage of the bargains, so they are happy to pay me for the assistance allowing me to invest in all the bargains on offer at the moment!
Millionaire in training wrote:Hi all
I'm 100% in Cash at the moment with plans to trade shares as I finsh my Diploma in Share Trading. Where is this from? Hopefully not one of those trading software companies that wants to flog you expensive software. – Reality is the sharemarket isn't rational! Try investing rather than trading – watch the in/out costs – you can easily trade away your profits in transaction costs! Hope you've got guts of steel – otherwise get the gaviscon ready. And don't marry yourself to your computer.
Last year It was a development deal
I think the thing here is to maintain fleibility, ave a number of strategies under ones belt and hit the market in the areas you are confident in at a time that suits, be it shares, options, property or cash.
Either way educate yourselves enough to take advatnage of the situations.
Warm Regards
Suerichardgr wrote:Uncertain here.
Everything I have read in the past month has had a negative slant on property investing. Opinions seem to be first option is cash in the bank, second option blue chip shares and third is property.
Capital available try, blue chip shares get more shares for your dollar with highest dividend yields we have seen in a long time, property – take advantage of the over committed! then bank.
Take the bank interest, remove the tax and then remove inflation of nearly 4% there ain't much left!L.A Aussie wrote:We settled on a block of land in Aug which will be for our next PPoR, so we will be doing some debt reduction and getting cashed up for the most part.We have a decent amount of equity in the potfolio, but the current Bank is not letting us do much due to servicability (the new block has put a spanner in the works I guess) so we are going to also re-finance the portfolio so I can use some of the funds to buy a business for when we return to Aus in April.
All going well, we will use the funds from the business for living, and use the wife's income for more investing and debt reduction; maybe get the new PPoR built towards the ned of the year, then look for the next IP project.
If your going into business look at the structuring – make sure those assets are safe – also can benefit from income distribution strategies – however depends on the business might take sometime to make a profit.
mathewc73 wrote:Hi everyone,
Personally Im feeling less certain about the direction of all markets for 2008. So my strategy is basically to cash up.
– No share purchases try counter cyclical investing – ask warren buffet – why buy good companies when they are expensive compared to their dividends!
– No property purchases property market slowing down, more choice – go figure!
– Make improvements to existing properties to improve rental yield is it actually improved yield once you add the costs of the improvements to the property cost?
– Put the cash down to offset interest great if it isn't tax deductible debt otherwise take advantage of good investments "on special"!I must admit it is very difficult to NOT do anything!
Happy new year!
