Forum Replies Created
Defintely not speaking for Steve, but a couple of comments/questions.
There are varied positions regarding negative gearing versus +ve geared property.
Are you working? Negative gearing requires you to work and pay tax
How much tax do you pay? Will dictate the scope of reductions in tax and whther it is worth pursuing in principle.
How long do you intend to work for? Retiring early & how earlyDo you have some knowledge/resources/time to repair/update properties if they are older, if required?
Obviously negative gearing requires you to work and pay tax. However, as a general principle, from my experience and knowledge, many of the +ve geared properties are not in the higher growth areas. (I can feel a wave of e-mails contradicting me!).Or at the very least they are much cheaper
Property Value Growth Nominal capital gain
$100k 20% $20k
$300k 20% $60kAssuming that both properties grow at the same level, there is a $40k benefit in the $300k.
On the subject of apartment v house – the arguments for houses over apartments is that the land component in houses is significantly greater and it is land that appreciates and makes you the capital growth. Buildings depreciate.
(Sounding like a politician now), after saying that, let me say this…. I have two IP, both which are apartments. One that was my PPOR and another which I was able to secure the first in a small development (of 5), at a significant discount to the current market valuation, as the builder needed to sell one before commencing construction. The next one i am looking at will be either a townhouse or house though..
What I am saying, ultimately horses for courses. Your decision needs to be based on your criteria and the individual property’s value proposition.
Of course, I am not Steve and do not own 100 plus properties!
You can do it yourself or get an accountants assistance (for a price) obvioulsy. The 221D from is now called Section 15-15. The actual form you need to fill out and submit is on
http://www.ato.gov.au/content/downloads/NAT2036e2004.pdfJames
Elves, of course inflation from what I can recall from my economics classes in the late 70’s & early 80’s was around this mark and a touch higher. One of the reasons for de-regulation of the banking system. The banks losing money as “real rates” were actually negative.
However, a young family, both parents working as unskilled labour with a couple of kids, trying to make ends meet are probably not splurging or indulging in luxuries. In fact most likely the opposite. (Although you could question the decisionn to have kids though!)I suspect this comes back to education. Financial education which there isn’t enough of or indeed any. (except for this web-site of course!)
James
Accalam,
From my somewhat limited experience, I think this is company share/stratum title. The more knowledgeable people on this site will confirm.When I have looked at older flats to purchase, many have been company share. I know some of the banks will not lend as much on this as opposed to strata title. Just a thought for your future potential purchases. Ultimately, the factors that make a good property are the same for strata/stratum/company share though.
James
Purple Kiss,
I purchased an OTP property a few years back and on each level there was no apartment number 4. So on the level that I purchased, level 10, there was no apt 1004. Apparently, number 4 is unlucky for the Chinese(??).Depends on the nationality of your tenants, maybe number 8 if they are Chinese.
James
Consider most students today will attend a tertiary institution until about 22-23 and then go on to get a job.
Most will run their own car, have a part-time job, live at home, have a little bit of cash saved, gofor a holiday (maybe Bali or GC, Qld) and have an active social life, want to have nice clothes, mobile phones etc etc. (Notice I said most, not all).The median price of a house in Melbourne is approx. $360-370k, so a deposit of $72k plus costs would be required. How long would it take for you all to save $72k, forgetting average annual salaries for grads are around $35k. Many years I would suspect. Whilst you wouldn’t choose to buy somehting that price range, you would still need to spend I think in the mid-200’s (old apt/unit etc) to get something somewhat central or not in need of too much work. A
Of course then to service a loan of $290k is at 7.07% over 30 yrs, $1943.03 PCM. One wouold need to work for a few years to get to the point where they could comfortably service this loan.
Of course I am talking about those who take this path, others will be less fortunate, so their task is extremely difficult.
My sister is in the same situation, while she has a small investment property, she desparately wants to buy a place to live in herself. After doing the sums this last week, the best way for her to get to her current wish (they change weekly with my sister!), is to essentially buy another IP and wait another year or two. My parents are happy for her to stay at home, so she has no problems there.
So maybe the dream isn’t over, you just need to go through a different path to get there, if that is what you want. Of course, there may be assistance from family parents etc, which has been discussed previously on another forum topic.
My question is….why should we still maintain the same fixation to own your own home in the 21st century. Isn’t it time to realise that your own home is an asset but just not a income producing one, which cuts peoples options to invest and grow their own wealth. Don’t many people rent and at the same time, continue to invest in property and/or shares in this forum?? (or am I mistaken..again)
James
Can’t they re-finance existing home loan, rent out property in the suburbs. Surely that might assist them in getting a 90 or 95% LVR loan for the apartment. I know St george have a 100% loan facility, although income qualification is higher.
The numbers will dictate if this can be done. Whilst it might be an expensive mistake, I think just cutting your losses might comopund their problem.
I agree that the value of the suburban home may, depending on location etc, increasing at a greater rate in the medium term than the inner city apartment. Is this the Docklands? Hence why all attempts should be to keep it and make some sacrfices to maintain the apartment.
Speak to a few mortgage brokers and get their feedback and advice.
James
So who deems “market value”? Is it a bank valuation for first mortgage purposes, sales appraisal?? If bank valuation, it will obviously be a lower figure than a sales appraisal.
James
The Big Shift (2nd Edition) – Welcome to the Third Australia Culture
(The Bernard Salt Report)- Bernard SaltNot sure if this has been previoulsy posted here, but for additional information about changing demographics across Australia, identifying areas of growth/deline and other cultural changes which are relevant to property investment & general knowledge.
Whilst some of the information is very general, it provides a great overview and a start for further investigation into those areas that you might be interested in investing.
Score: 8/10
James
Any way to claim back GST on new residential property?
James
Abundance,
I visited the Gold Coast last year for the first time, and whilst there, I was looking at short-stay/holiday properties.
After looking at the figures behind a few of these investments, they were marginally better than your normal rental situation. However, I believe you are investing not only in the location but also in the skills of the management of the facility. Adds another variable.Ask about how they market themselves, maintain business, see how they run the premises by just being there. Ask the existing clientele what they think.
James
Ben,
I haven’t personally been to Steve’s seminars however my only advice, is after finding as much as you can from other sources as well, make sure you put it into practice. The only way you will have flushed the $990 down the toilet is doing nothing.Investing isn’t rocket science, you will pick it up quickly.
I would be interested in your thoughts after going to the seminar itself.
Good luck
James
That is incorrect advice. As a rule of thumb banks will consider
1. 80% of your rental income
2. 30% of your gross salary
3. 50% of other investment incomeThe 80% is taking into consideration costs and vacancy.
Each bank/financial institution will vary, however that should provide an intial estimate of your income that the banks will take into consideration for serviceability.
The other mortgage brokers on this forum could provide more specific advice.
James
Dragons_1908
Rent per week * 52 = Gross Annual Rental Income
GARI/Property Valuation (or Purchase price) = Rental YieldFor example – Property valued at $350,000 renting at $350 per week
GARI = 350 * 52= $18200
18,200/350,000 = 5.2%Therefore the above property has a gross rental yield of 5.2%
(Obvioulsy costs are excluded)
JamesSo on newly built property, is there any way one can claim back the GST you pay on the construction portion.
James
