[curtain]Hello…
So… having read all the Rich Dad series and De Roos et al… We believe we have finally found a group aiming towards a common goal. It’s been great checking out the forum topics that have kept our interest for the last hour and a half… woops – where did Sunday go?
We are orginally from Perth but have been living in London for the last couple of years. Recently we attended a seminar called “The Australian Expat – the luckiest person on earth” (a guide to financially maximising your time abroad!)
It certainly was very informative as it is based on tax benefits and the accrual of tax losses – however, contrary to Rich Dad’s cash flow synopsis we aim to use the benifits to “…buy a property that makes you money every month and gives me a tax break..”(Retire Young Retire Rich p145).We would love to buy some property in Australia / UK that would have positive cash flow and the tax benefits that go with being an Expat!
Can anyone give us some ideas regarding…
1. People / seminars in London relating to this topic
2. Property websites / people / seminars in Perth in the last two weeks of August 2005
3. Next books to read…
4. How to find properties that will give us any positive cash flow from rental return in the Australian property market (Perth especially)!Look forward to hearing the Goss..
[whistle]
Hi Feast,
In answer to Q #3.
Here’s the Goss on books…[biggrin]
https://www.propertyinvesting.com/forum/topic/6845.html?SearchTerms=recommended,books
Regards,Sharon
Me again, just found some Goss on Perth for you…
https://www.propertyinvesting.com/forum/topic/9746.html?SearchTerms=perth
Regards,Sharon
Hi Sharon,
Thanks for replying so quickly to our email. Have printed out the list of books to peruse… and we are absorbing them in no time at all!Does anyone have any good websites for property hunting that will help us in our search? Being in a different country is making it a challenge and we are pretty keen to buy in the next 6 months – unless someone recommends to stay put for a while – ie: interest rates??
Did we hear correctly that you can fix for less than the variable at the moment?Feast
Hi Feast,
Sharon has given you a couple of good reference material leads there. But back to your questions.
Can anyone give us some ideas regarding…
1. People / seminars in London relating to this topicCan’t help you with this one
2. Property websites / people / seminars in Perth in the last two weeks of August 2005
Recommend you do a search of the internet – google Perth – property investment and see what comes up.
3. Next books to read…
See Sharon’s comments
4. How to find properties that will give us any positive cash flow from rental return in the Australian property market (Perth especially)!
Without being present at the London seminar it is possible that some of my comments are a little off track. Nonetheless they will serve to help you clarify your investment journey.
You will need to be aware that seminar promoters who work the overseas market do tend to rely on managed apartments and properties that do have a higher gross rental return. The ongoing costs of some of these properties can be quite high and as such your nett cashflow can be eroded through this.
Another piece of misinformation peddled quite widely was the use of a 4% capital depreciation allowance on the same properties. The ATO is ruling against most buildings claiming a 4% allowance and is using 2.5% as the annual claim. The difference to your cashflow can be significant.
You will find that positive cashflow properties are becoming more difficult to ifnd in the current market. The recent movements in price have not been matched with similar percentage movements in rents. Having said that the Perth rental market is firming and rents are on their way up – albeit at a slower pace.
Fixed interest rates are comparable to variable interest rates at the moment. Many lenders do have a discounted rate depending upon your borrowings which can see money borrowed at low to mid 6’s at the moment.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.HI Derek,
Thanks for the info!
Actually, the seminar here was quite enlightning!
There was an Australian tax accountant and mortage broker present as well as UK financial and currency advisors.
The whole gist was…
Even as an expat we have to do a tax return every year. We are not earning a wage in Aust but we have a rental property there. Currently it is negetive gearing (slightly). The big question is…We have the funds now to change that or do we buy another property?The seminar people are saying it is better to buy properties while we are Expats and negetive gear them so as to incur as many losses as possible. These losses will then accrue over time and when/if we return we can choose how to use these losses. We can either use them on our own income tax or we can deduct it from our capital gains tax… if we decided to sell.
We may not have to pay tax in Aust for a looonnngggg time!
We are at a cross roads right now and having to make a few big decisions. Because we are earning the pound stirling (2.5 to the dollar) we are in a pretty good position right now.
I know “Rich Dad” thinks money IN rather than money OUT is important… but i’m now not sure which one to do? Both????
And.. then there’s always properties here as well!Never did we think we would be able to buy in London!
Feast
Hi Feast,
I would very strongly suggest you see an accountant who does not so clearly have a vested interest. One who gives accurate and sensible advice might also be worth considering.
Cheers, F.[cowboy2]Use your UK cash to flow into a new IP in OZ rather than the uk. I take it that you wish to come home at sometime? Would all the value of your surplus funds there be wasted if invested there? What are the UK vs Aussie tax ratios and other charges. Things like land tax for non residents and things similar to that. Do your research, and if then you have better options there, just go for it.
Informed decisions are the best ones. Be wary of accountants that miraculously appeared on the night. What commisions do the various parties get and is it as clearly disclosed as it is over here.
Good Luck and keep warm. One of my clients is over there for a month and is freezing.
DD
PS146 Certified Financial Planner
Don’t sweat the small stuff,and it’s all small stuff!!Thanks for the added infoguys, however…
I’m not sure if I’m making myself clear regarding this idea. The information comes from the book “The Australian Expat – the Luckiest Person on Earth” written by Steve Douglas. Their website is http://www.smats.net and it is information from the Australia Taxation Office – completely legal and not a scam! It is available to anyone who is currently living overseas as an Aussie Expat and knows about it. It states…
“… The Power of Property – Negetive Gearing Expat Style… the deliberate use of borrowed funds to buy an asset where the income is not enough to cover the holding costs and interest, creating an annual deficit, or negative. It is done solely on the expectation of capital appreciation of the asset…(we know this…BUT) As an Expat, this annual defict has nothing to offset so simply accumulates each and every year you are away to be used at some future time…they go on indefinitely until such time as you need them to offset either future rental surplus, capital gains on sale or to offset Australian taxable income when you return to Australia…including salary or retirement incomes.” (Chapter 9)[dead2]
The only vested interest the accountants from this seminar have is actually doing our tax – having an Aussie accountant here works out quite well for us.. yeah? You can even claim travel expenses (flights home!) to check out your exisiting assets AND buy more! As long as we make sure we can afford the annual holding cost we can reap the rewards… keeping in mind the UK currency gives us the greatest buying power. Using OPM and leveraging (the effect of time and many properties) will assist in the purchase and provide a significant tax saving opportunity.
On the other hand…
the beauty about buying properties here (London) is the rent, being as high as it is(!), usually covers the mortgage, whereas in “common” residential Australian properties there’s no chance unless you are specifically searching for positive cash flow properties.Still looking at tax implications here regarding our return… I believe we’ll be taxed on any properties in UK on our return… ?
So now waddya think…?
[biggrin]feast
Hi Feast,
It seems, to me anyway, that you are lookign at investment from the wrong angle. While tax deductions may be attractive the primary purpose for investment is to make money – either through growth or through an income stream. Any tax savings should be considered as a bonus and not the sole purpose for investment.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.
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