Forum Replies Created
Thanks Terry.
Terry, sorry that I confused you. But you have explained it to me. I really meant to say “to buy an IP in a trust and have the loan deductable against personal income”.
What you said about having a company as a beneficiary so income distribution is only tax at 30% is a very good and clever way of reducing tax.
Thanks for the tip and yes I will talk to another accountant.
Do you know what is considerate as a resonable cost to run a simple discretionary trust?Thanks for the info Terry, I didn’t know that.
I went to see a CPA that works for an (expensive) accounting firm on Monday. He explained alot of things and seemed to be very good with his job. Anyway, before I went to see him the impression that I got from this forum is that you need a hybrid discretionarty trust to enable to borrow money against a trust and have the borrowing cost tax deductable against your personal income. But I was explained that (non hybrid) discretionary trust can do that too.
He also told me that there is no need for us to have a trust for our purpose since we both work and on top tax bracket. Comment please.
By the way he charges over $250 an hour and if we have a trust will likely to cost $1500 + a year to run it.Please forgive my ignorance but why you need a company as the trustee? Can’t she or her husband be a trustee? Won’t setting up a company only add more running cost?
Terry, I don’t understand when you say Trust usually don’t get tax free thresholds. My understanding is that trust must distribute income every year and the tax is paid by beneficiaries. So if a beneficieries is a person with no income than the tax free threshold will apply?
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I have made an appointment to see a charterred accountant on Monday. His company has helped my friend to setup family trust and company.Thanks Terry.
One last question, is there any circumstances where it will not be benefitial not to have discretionary (hybrid) trust for investor? Except for the obvious ie setting up and ongoing cost.Thanks Terry.
Have anyone in Perth used this Tax Lawyer?I’ll shelf the idea for now and I’ll also let my Colleague knows about the stats. Interesting time, property market is slowing and sharemarket is probably going through a correction. Maybe the economic clock is pointing toward 6 o’clock, signalling increase in IR.
Hi Derek,
My colleague is looking at it, he thinks it will be a good investment with little down payment. I never really like the idea of investing in apartments but I thought I better ask some people here. I am trying to be open minded and will look into anything that will give good return in the future. As for analysis paralysis, yes I admit that. I don’t know much about IP beside is it time to be bullish now? For that reason I will keep looking and asking. I am sure once I get one, the next ones will be an easy decision.
It is a good point to have the list of “must have”, desirables, must not and probably not. I will do that.Thanks for the advise. Currently I am working based on yield and CG estimate. I can’t find any with good yield and near a beach/city.
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Marisa, I have been in contact with the agent. They don’t seem to sell very well? Still many of them are not sold. The update that they sent me still showing the same number of blocks not sold. I also asked about House and Land packages.
I’ll keep looking and sharpen my instinct. I’ll get there.
Thanks for the info about the oversupply and downtrend stats.I took my children to safety bay for a swin on Saturday. It’s a nice spot and easy to get there.
I also been thinking about the suburb in the last month or so. I don’t have an IP so it will be my first one. Like someone mentioned the rents don’t seem very good.
Alfamick, do you mind me asking if your IP has gone up a lot? Is it near the beach? The have few properties for sale around penguin island.Pagey, if you decide to transfer the land to your husband perhaps you should consider hybrid discretionary trust. Check the Legal&Finance board. It might suit you better. I don’t have one myself but thinking about it (just found out myself).
I certainly wouldn’t recommend you to get another property CF+ or not. You’ll be busy enough with your baby without having to stress out about money.Good luck.
I am also looking for such person for the same reason except I am in Perth.
Neo, the question is can you find a good IP that earns you a resonable rent for the price. The prices has gone out of wack that reasonable yield is very difficult to find now. I don’t know what will adjust, the rent or the price. Not an expert.
I am reading Jan Somers – Story by Story. On one on the chapter she said that property prices (I think in Melbourne? could be Sydney) since 1950 till 1990s on average was 3 to 4 times of average salary. If that trend to remain the same wouldn’t it be a good idea to wait since it’s likely to be flat for some years yet. If you buy a property now it will be likely to CF- and costing you money if the IP don’t go up in few years?
I don’t have an IP and like to have one but not sure about jumping into it now. I have been doing a calculation and just going to cost too much. I live in Perth that suppose to have further growth but still find it too expensive to negatively geared one now. Maybe with more reading and research I will be able to find an opportunity easier.Thanks Marisa
Thanks for the reply Foundation.
So for properties to go up we don’t need salary increase accross the board. But rent increase means inflation increase hence salary also increase. Property price increase don’t increase inflation, only rent does?
I quess salary don’t have to go up by 75% for rents to go up by that much. Say rents go up by 50% but salary only 20% because other things don’t go up or just a little. Basically salary go up to cover inflation caused by housing cost? Maybe I am making it to complicated??Thanks Marisa.
Do you know the zoning in Yokine, can I find this info on the net? I need an IP that is rentable but I prefer not to go offer 300K. Do you know if vacancy rates is low in Yokine?I have been doing shares for over 15 years now. Though the first 10 years I couldn’t say I was investing but more like speculating. But now I am not interested in trading and 85% of my holding is in blue chips. The others are managed funds on small companies. I am seriously want to get into IPs too, still looking around now. My shares is CF+ even with 50% gearing so I don’t mind CF- if I confidence with the future CG.
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I have a question about negative gearing in properties. The rental cost has been very flat in Perth for many years? Some might dispute this. If I am gearing into IP will I end up negatively geared for unforseable future? No sign that rent is going up even propertie prices are all time high? Say if an IP is yielding 4% now, will I get 7% in 5 years time?
While with shares I can see CF- become CF+ in few years in reasonable market.
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PS:Not interested in arguing shares or IP is better.Suzieq thanks for the comment. I should look into it. I quess I like the coast and inner city properties, probably will always be easier to rent and have better CG??
I am wondering if you guys have opinions about Yokine and Hillarys. If you were to choose one for IP around 300K where will you buy between the two? Pros and cons? This will be outside the “11 seconds” rule for sure.
Thanks.Can you still find properties within 100 kms of Perth (North and South but not East) where “11 seconds rule” still apply?
