giday gang i’m only a couple of months into my property investing straturgy,and i’m keen to get stuck into it only to be confused every time i read a different method of investing.i have just been reading up on buying post 1985 properties and using depreciation to make the deal cash posi.
is another plan of attack to find properties where the income is more than you need to pay expenses before tax.is there anybody i could possibly talk to?yes i’m a bit confussed.pete
Hey Pete,
Welcome to the Forum PI.com[
]
There are a hundred difernt ways to skin a cat and so likewise a multitude of options to complete a property deal.
Sounds like you have been reading Margaret Lomas type theories.
I personally do not like to rely on the tax breaks to make it positive. I would rather the property paid it’s own way. By this I mean the property rent(income) covers all the outgoings (costs) and leaves me positive or nuetral. This way I can keep on doing deals as long as I have deposits.
hope this helps.Enjoy
AD [:0)]“Carpe diem, quam minimum credula postero.”
Lat., “Seize the day, put no trust in tomorrow.”
-Horace, OdesI concur with AD
Many investors have been caught in the past, investing in properties that were only +ve geared *after* tax. The laws change and suddenly they’re caught paying losses instead of receiving income. Laws change daily much faster than property strategies often can, so the only strategies that make sense to me personally are the ones that make a (pre-tax) profit and “force” you to deal with it! *sigh* A good problem! [
]Quasimodo
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Funny how action has a way of answering all of our fearful questions…
___________________________________________________________________________Stampeze
I agree with AD & Quasimodo. Positive cashflow feeds you (property is an asset), negative cashflow eats you (property is a liability).
There are, however, legitimate investing reasons to have a negative geared property, BUT, you must fully understand the downside risk of this. ie, you are absolutely dependant on a rising market to “cash you out”.
We are more into positive cashflow where we are not trying to predict the market, we have locked in our profit from day one.
keep asking questions !!
TTFN
the B [
]thanks guys ,so what your saying is the rental return covers all costs with xtra left over.is this positive gearing as i would have to declare this as income thus losing some of this in tax.thanks for helping. pete
Stampeze
just remember:
If you have legally minimised all of your tax and you are still paying heaps, you must be earning an enormous amount !!
the B [
]hey the b could you simplify what you’ve just said,sorry for being such a dud.
pete
I think the B man is trying to say is that if you have found all the legal options to reduce your tax and still have to pay a bucket load of tax then you must have made a fortune.
For me I cannot wait until the day when I have to sign a cheque to the tax office for $1,000,000. This means I must have made a bundle because I know my acountant would ensure this was the absolute minimum tax payable. eg. $1,000,000 in Tax would mean earnings well above $2,000,000…..Hope this helps.
Enjoy
AD [:0)]“Carpe diem, quam minimum credula postero.”
Lat., “Seize the day, put no trust in tomorrow.”
-Horace, OdesStampeze (Pete)
Hey mate you aren’t being a dud!
Like I said before “keep asking questions”. The really nice thing about this community is the amount of help that everyone gives each other.
You know, I learn something new from people of all experience levels practically every time I log on. So I reckon that everyone has a very valuable contribution to make.
Now (having finished my mini-rave [
] hee hee) Mr AD has fleshed out what I was describing.It all comes from a seminar that Dave Bradley was speaking at where he asked everyone: “Who would like to a million dollars in tax?”
Of course I kept both hands firmly down, only to realise that I was about the only person in a room of 80 people who didn’t have my hand in the air!
Finally Dave put me out of my misery and explained that if you had to pay a lot of tax, then surely you must be making a truckload of money……
cheerio
the B personage [
]ps: “May you pay a motherload of tax after your taxable income has been soundly beaten about the ears by your accountant and drastically minimised” – Ye Olde Investors Blessing [
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