I want to quit my job…help !

Damo,

What you need to do is get a blank piece of paper, write “I quit” on it and then sign and date it and hand it to your boss. That aughta do it I reckon! Gee, and all that other advice so far and noone addressed the actual question! [biggrin]

But seriously, I’m with the posters that advocated sticking with it until you already have the passive income to retire on. Look at it as a target and it will increase your drive to get there. In the meantime you need that income cashflow to help with debt servicing allowing IP leveraging.

Its a game, but there’s rules you need to play by. Map it out and then get on and do it. Your current approach uses minimal leverage IMHO. By renovating your own PPOR selling and repeating, you only ever have one asset working for you. Maybe consider leveraging all the current equity in your PPOR at 80% LVR through an LOC. Put this as 20% down on a string of IPs. If they need some cosmetic touch ups to add value then all the better.

Now you’ve got about 4 times the equity working for you! Sit back, and as Greg suggests, let capital gain do all the hard work for you. Pick your properties well, understand your servicability levels and SANF, then leverage.

If you want out of the 9-5 grind then you need to accelerate that plan a bit.

Just throwing some thoughts out there 4 ya.

Cheers,
Michael.

Just to throw in my two cents. I agree with the concerns about PPOR CGT exemption. Working in tax, I know the ATO doesn’t like people avoiding tax. Sure you will probably get away with it but legally they look at your intention ie. make money, more than see it as a place to sleep.

Good luck with your plans, I hope it works out well for you.

Damo,

Just addressing this issue of CGT with your PPOR, I believe Noel Whittaker addressed this issue about 10 or 12 years ago in his second book “More Money”.

His suggestion, based on the ATO taking a dim view and classifying the property renovator as a ‘trader’, and therefore liable for CGT, instead of just a place to rest their head at night…was to alternate the ownership of the prop. between yourself and your partner (assuming you have one of course).

His reasoning was that it would take on average 12 months for acquisition / reno / prepare for sale / advertise / closing the sale / realising the funds after settlement, and therefore by alternating you personally would only be selling one prop every 2 years…something that the ATO couldn’t reasonably term as ‘trading’, and therefore exempt yourself from the CGT liability.

I thought Noel’s point of view was very reasonable and he’d pretty much confirmed that with his contacts in the ATO.

On another point, it’s pretty spooky the amount of property investors replying to this thread who are living in Perth and are 35 years of age…there’s a few of us around hey !!!

Maybe we should get together sometime and have a casual chinwag ??

Cheers,

Dazzling

“No point having a cake if you can’t eat it.”