All Topics / Help Needed! / Is this right
Hi all and Happy New Year
Still the newby but trying to hard to get the figures right but still need help.I am currently looking around for that all elusive +ve geared property and think I may be onto something but not sure.
The property is located in a well established country town in Victoria, it is close to schools, shopping complex and transport.The property is listed for $105,000 plus closing costs and is currently rented on a long term lease for $135.00 per week. It is an older type home but in good condition, a coat of paint would help brighten it up.
I will be using equity from an IP to finance this property and the loan repayments per week for interest only but an looking at P&I would be $145.00 per week. This would mean $10.00 out of pocket weekly not yet cash +ve.
1) What are the tax benefits that can be claimed and would these bring it up to a cash +ve property?
Thanks for your help Martine[blush2]
You haven’t factored in costs such as rates, repairs, agents fees, accounting etc.
These would be claimable, as would borrowing costs (over 5 years) and depreciation on fixtures and fittings and building (depending on age).
this would probably be negative cashflow even after tax breaks.
Are the capital growth prospects high? If not, why buy?
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
Click below to email meTerryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Martine
The main deductions that are likely to make it +ve (after tax) are non cash deductions on construction costs and fittings. There might not be a lot you can claim in costruction costs because of the age of the building but there may be some if there has been some recent renovations. For fittings you maybe surprised how much you can claim. To get a clearer professional picture of what is possible talk to your accountant. If you do buy the place then get a quantity survey to maximise your non cash deductions.
Good luck hope it works out.[cap]
John
Thanks John and Terry
I do have lots more to learn.The prices in the area have doubled in the past 10 years not much I suppose, but still a small CG.
I would have the property thoroughly assessed before making an offer just to make sure that all is well with the property and that there are no hidden problems which could end up costing a mint.
The kitchen was recently renovated but that is all the renovations that have been done.
I am about to meet with an accountant and hopefully he will be able to provide me with more advice.
Thanks Again for your support and feedback
Martine[cap]
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