Forum Replies Created
I have applied this strategy in my own investing life and I can’t be a stronger proponent. I will never buy again in ATL but that is because I truly HATE the costs of triple taxes, triple holding costs – and that is on very smooth sailing properties…
Hi Emma
What are you referring to when you say triple taxes and triple holding costs?
Cheers
The Aust tenants do not necessarily pay weekly but it is accounted for weekly. Similarly not all rents are direct debits we still have tenants who pay cash or cheque in person. There is also a direct deposit facility that is often used. In various states there is legislation which forces the RE to provide various payment options.
The RE office is generally local to the property with and is a manned office generally 9 -5.
Back to the original poster.
Shared houses are defiantly in our market but they are illegal unless the owner lives at the property and the number of non related people does not exceed certain numbers (state dependent) Along the lines you have outlined it would definitely fall fowl of the law unless the house is a council (county) approved boarding house.
Hi Jan
As Kay has already indicated it is doubtful that you have a case.
As far as trying to evict him because of the lease conditions. I see that these would be judged as harsh and uncontionable and as such you will not succeed but in so doing aggrevate the whole situation even further.
Reading your post I drew the conclusion that you had already spoken to him about his smoking> this may have prompted him to speak to the rental authorities and find out his position. This would have contributed to his level of reaction when someone parked in ‘his space’.
I hope that you have him signed to a lease agreement and if you have simply wait until the end of the lease, then terminate him.
I future I would also suggest that you have as little to do with the tenant as possible leaving any interaction to your son. This should ensure that the ther will less likelihood of a repeat experience.
Cheers
Originally posted by JustAllan:Hi folks… I’m looking for suggestions on what to do with $15,000 cash, while still adding to it for a deposit. I think ING Direct is currently about 5.2% and Companion Credit Union a little more I think – but it’s really still chicken feed – anyone have any other suggestions?
Allan.
Hi allan
Could I suggest an income fund such as Navra.
I am invested in this fund and it is making great returns with no effort.Returns over the last 3 months has been about 5% (giving 20% pa)
You can check out their site at http://www.navrainvest.com.au
If you proceed with them then make sure you avoid the entry cost which I think is about 4%.
As far as buying shares direct, unless you take a real interest you will loose money. Prime example is the Telstra sell of at seven dollars something in the form of Telstra 2. All the mom and pops are sitting on losses of at least $2.50 or about 33%.
Cheers
Hi All
Vote for the party that is going to create the most upset and disquite in the economy.
By all means abolish any favourable treatment of GCT, increase stamp duty, apply a land tax to all IP’s.
In the end the smart investor will stand to gain from the oppurtunities that are created as a consequence of the politicians idiocy. The last thing you want is another term where nothing happens.
Cheers
I am with you PK. In the end its the only way to deal with the situation. I had an ANZ visa card was racking up 150,000+ points pa the received the 5k per month letter haven’t used it since.
Citibank just sent similar letter advicing me I had exceeded my max points for the year (by 20k) and will not receive anymore points until August my anivesary date.
Am now applying for CBA platimum just to ensure I can get 1:1 points.
Cheers
Originally posted by PurpleKiss:LOL, well, I ditched them and went elsewhere. Wrote a letter explaining that I was unhappy as their fees had increased (by nearly double) in one year and then 12 months later their reward program decreased and as for there idea of having two cards, told them that was crazy. They didn’t even bother to reply. That’s customer service nowadays.[thumbsdownanim
[biggrin][biggrin]
Hi Shar
Iam a bit confused why you are discussing NSW if you are going over to NZ.
Anyway in regard to land tax in NSW the new should actually benefit trust structures. The reason is that the first $400k will be levied at .4% rather than the previous 1.7% a saving of about the 1.3% mark.
It is still to be seen whether the .4% will apply to each property up to the $400k value or whether it is accumulative as currently applies.
Cheers
Hi kelhutch
I would suggest you go and talk to the council and see what approvals you need to make it an approved improvement.
The next step will be to get plans drawn up and submit them to council to get official response. This may cost up to $1k but in the long term is a worthwhile investment even if you don’t proceed.
The main consideration willl be fire proofing, particularly if there is to be a kitchen in the granny flat.
Cheers
Hi glenetti
Absolutely spot on. By not redrawing the money used to pay down your PPOR you are literally using the pile of cash sitting under the bed.
Obviously one needs to invest this money correctly to maintain your safn (sleep at night factor).
Unfortunately the marketiers are starting to get hold of this concept and pushing people to use the ‘equity mate’ to make lifestyle purchases and simply blow their mortage on doodads.
Cheers
Hi jaffasoft
You can try
http://www.strategicwealthmanagement.com.auor
http://www.chrisbatten.com.au/
and lastly try
Cheers
Hi All
Possibly what is refered to is redrawing the increasing equity to finance the -ve holding cost and also provide defered tax income based on spending the drawdown rather than having a taxable income.
A more detailed explanation can be obtained via Steve Navra. A link that explains some of this is here http://www.somersoft.com/forums/showthread.php?t=14957
Personally I see this strategy as a high risk strategy as in a flat market and increasing interest rates you can actually go backwards.
Cheers
There seem to be 2 issues here
1 qld properties with -ve no effort
2 seaside properties with +ve with effort1) overpaid, with market only just catching up with purchase price.
Look at the market and asses whether there is going to be any CG in the near (2-4 years). If there is going to be any further capital gain does this exceed the loss on these properties. If not then I would consider selling these properties and put it down to a learning experience.
2) Seems like the only problem is the work required as you have made good CG and the income seems sufficient to offset the work that is required.
I would certainly look at keeping these as the selling process will simply erode the gain through costs. At a later point in time you can utilise the CG by drawing down and springboarding into more property that will show good returns and potential CG.
Remember in the end the real money from property is CG with the aim being to minimise costs whilst holding it.
As far as dealing with the work somebody has already suggested a PM arrangment.
Personaly I am currently drawing down excess equity in my properties and earning 5% over costs through a managed fund. This could be something yu could look into particularly if the seaside properties have double since purchase.
Cheers
Hi Yack
We have been renting a house to my sister in law since 1996. They have now paid more rent than we paid for the house originally (a long time ago)
No problems so far with the rental payments.
Cheers
Hi All
As a substantial NSW investor I see the change in Land tax as positive for landlords.
I am already paying substantial land tax and although I haven’t sat down the work out the difference I suspect there will be negligable difference under this new regime.
What it has done is leveled the playing field for all other investors (read my competion) who compete for tenants in the rental market. Prior to this change my rents could not reflect the landtax component of my costs due to market forces whereas now with every landlord affected there will be an overall tendency to try and recover the land tax via higher rents.
Just to throw the cat amongst the pigeons maybe a state rates should be applied to all home owners in a simmilar way as council rates. Although I agree with the point made by Steve re irresponsible spending by government, the simple matter is that the state still needs to raise revenue and all people in the state should contribute towards the upkeep of the state.
The application of a land tax to investors only will in the long run only apply to the % of the pop that are renters so in actual fact it is fair that a land tax (State rate ) should apply to all so that in the end everybody either directly or indirectly is contributing to the upkeep of the state.
A link for further reading on land tax follows
http://www.dlslawyers.com/land_tax.htm
Cheers
Just wait 2 years and take a look at the stats then.
This will be after the new property investors have had a gut full of bad tenants, the hassles of the paper work, the allure of a shiny new car or any other doodad that takes their fancy and simply no real capital gain which most will be banking on and possibly -ve growth.
They simply don’t last the distance. I am sure that if you looked at the stats after every boom you would see a change which then settles own again.
Cheers
SIS, I don’t particularly agree with the intent to delay the payment of the HECS debt as in the mean time I and every other tax payer is supporting you.
Unfortunately for you life (and the government) has a way of catching up with you. You may or may not be aware but and depreciation on the property is added back for GCT purposes so that any deduction you gain today, in todays dollars and at a lower tax %, you will pay back in future dollars at a higher (based on increased income) tax %.
Your case in delaying the payment of HECS hinges
“Your HECS repayment income is:
* your taxable income for an income year1; plus
* any amounts your taxable income has been reduced by a net rental loss; plus
* your total reportable fringe benefits amounts shown on your Pay As You Go (PAYG) Payment Summary.”
on the wording “reduced by a net rental loss” which is just a word play and could mean straight $’s and completely disallow depreciation. If the ATO’s interpretation is as per the family allowance add back then you will find that you are liable to pay the HECS now.
Kay Henry – I would suggest that you go and have a chat to your accountant and have him explain non financial deductions.
Cheers
Hi BooBoo
It makes a difference and its called profit. The bank is out to make a buck and if they can get away with differenciating the business so that you pay more they will try.
Having said that I managed to get St George to do a Portfolio loan for $1mill at %6.5 or there abouts. With no business reporting etc. So basically as a home loan and this is on a block of 7 non strated units.
Another way around the bank categorising the loan as a business loan is to find a block of units that is already strated and do loans on each individual units. The down side is the initial cost the up side is flexibility if you want to sell 1 or 2.
In the end you will need to shop around to get the best deal. DOn’t be afraid to threaten to move all your loans if they don’t play ball AND MEAN IT. Moving your finances may cost some money but in the end will be worth it as your new bank knows that if you are not happy you will simply move the loans again.
I guess what I am trying to say is don’t take any s***t from the bank they are trying to sell a product (money) and they need you as a customer.
Cheers
I would try and do it through a hybrid trust. This is a discretionary trust that also has units as in a unit trust.
The ability for you to channel the money into a trust will be dependent on whether the trust can become a shareholder of the company without to much CGT problems.
With a hybrid trust the 50k will become the seed funds yoy take out another loan personally and buy units in the hybrid trust, the loan is garaunteed by the trust aand the property.
The advantages of this structure is that any loses can still be attributed to you out of the trust and the CG can be forwarded to you to obtain the CGT advantagoues.
So all up an ideal structure(for the moment).
You will need to talk to your friendly accountant or you can talk to Nick at http://www.strategicwealth.com.au/
who set up one of these for me recently.
Cheers
Hi Booboo
I took the decision some time back to start investing in blocks of units.
The main reason was the land tax bill with my thinking being that a house has very little income to offset the land tax but a block of units will have many rents to offset the saem or nearly the same rated value.
Since then we have purchased 4 blocks, the blocks consisting of, 6 units,15 units, 7 units and 9 units.
We have found that they have different sorts of problems compared to houses, namely they have many more plumbing problems the tenants tend to be shorter term than in houses. The property can get run down very easily as fully tenanted (no owners on site)
The reduce our overall maintenance we renovate the units completely at a cost of 8-10k per. This has been very effective in keeping the maintenance work right down but also has helped in attracting a better class of tenant.
All up I have been very happy with the overall performance of these properties as they have been cashflow +ve the whole way and have increased in value from about 75 -80k to 200-250k, so not a bad bit of capital gain.
Cheers
Hi brownrabbit
Congrats on your success.
In regard to selling don’t forget to factor in the CGT and other selling costs. In general this will come to about 20-30% of the gains that you have made so when comparing selling to simply raising money against the increased equity you are better off simply getting a loan to provide the money and retain the property for future capital growth.
It is my experience that I have always bought the next property at a higher price than the last even when the new property is a very good price in the market.
So I would suggest that you try and hold on and follow up on some of your other creative ideas based on borrowed money
Cheers
