[
]Hello[]
I need help/advice re: investing in property.I have 1 property which this year made more than
it cost in repayments,etc.My accountant said to buy another(neg.geared), to OFFSET the first one, so I dont pay as much tax as this year!
Steves book suggests do NOT negative gear(whats the point of losing money to achieve a tax reduction?)
Local agent says you cannot buy into + ve geared
property unless you have a large dep.(40-50K).
so the rent will be more than the mortgage.Also, where do I find 40-50K per inv.prop.??
I would like to have 5-10 properties when I retire
in approx6 years time.Helpful comments would be appreciated.
Hope you,ve got a Quantity Surveyors report and are depreciating items in that IP you own now.
Steve also says that negitive gearing is OK whan there is the likelyhood of high capital gains. So, yes one looses and the other makes money but the one that looses increases in value. At the moment we have several properties, some of which are rapidly gaining (last one bought gained $40-50K in four months with only $1000 down as deposit)This is negatively geared but our positive geared propertied off set this.
You need to choose which way you want to go. But on 5-6 properties you probably wont be living off the rent and Queried as to whether this will impact on any Gov benefits you might be able to receive if you don’t have another source of income.
I’m not a financial expert or property expert but it is all up to what you feel comfortable with.
Debra []G’day Enveeus,
Any chance of capital gains, as experienced in the past 3 years, is highly unlikely to continue
for some time.If anything a decline in prices together with interest rate rises is a more likely scenario.
Your accountant is obviously not qualified in Real Estate and suggest you do not take his advice.Steve and other Investors started several years ago, and what has applied over that period probably doesn’t apply today. All states have experienced massive increases in price, as have the US and Great Britain… nothing this good lasts forever.
To get in now…in my opinion, would be financial suicide as you don’t want to blow the equity you have built up. You may end up losing $2 to save $1 in Tax…
If you were fortunate to find a property at say $50-$80k it may be cf+ but that will be at the expense of any CG. Rarely do the two go together.
In a nutshell…for now, you have missed the Boat!
To give yourself any chance you will have to be patient and wait a couple/three years to buy into the next cycle.Sorry I know it’s not what you wanted to hear.
Cheers
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]
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