Hi all,
I question that has been bothering me is if someone owns a positive cashflow property then why they want to sell to you?
Why don’t they keep it & get all the benefits?
ThanksSeveral reasons spring to mind:
a) investor needs to access some funds but does not wish to borrow
b) investor needs to crystalise a capital loss to offset some other capital gain in the same tax year
c) investor would have to invest substantial funds for an upgrade to the property and does not wish to/have the ability to do so eg meet a council fire upgrade order
d) investor is not able to get finance to continue with their portfolio & have selected some low hanging fruit to sell
e) sale will allow the investor to rebalance their portfolio/rebalance or adjust their risk profile
f) sale will allow a tranfer of funds into a higher yielding investment
g) sale may be a CGT exempt property so the gains are not taxable
h) property is part of an estate which must be soldSounds good. thanks.
I am looking at a property which is current owned by (appears to be) a company – I assume it’s an investment company – so may be they want to sell to do something else.. May be they need to comply with some new council stuff.
Thanks for reply again.remember that a positively geared property for someone else wont necessarily be for you.
Obviously the longer you hold onto a property
1. The rent goes up
2. The loan comes down (if you are paying off principle)So eventually they will become positively geared. But when the property is sold the new owners will owe a higher percentage
on the property inturn making it negatively geared (normally)In the past I have people talk about their property that they are selling as being 'positively geared' and some people who are new to investing simply think it will be positive for them too
besf of luck
well said banjo, i see this happen all the time
They either want to buy a better property, or want to cash up for whatever reason…other commitments etc…or it's not CF+
Or maybe they have too much money comming in, their pockets arent deep enough to hold!!
by the way, im new here, is there an intro thread of some sort??
TCL Investments
Maybe they have alot of money tied up in the property and can use it to build there wealth quicker rather then missing out on the extra 20% as most banks lend 80% of your equity for deposits etc and are making people jump through hoops if its for other business ventures
Just because a property is cashflow postiive doesn't mean it is a good investment. eg. it may be in a mining town with anticipated closure of a mine in the future.
Terryw | 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
Think about it this way.
If I have $20,000 I can buy one property for $100,000
If that property goes up to $200,000 then I can sell it.
I then have $120,000 and can buy 6 properties worth $100,000. This increase my rental growth and my capital growth because I am now receiving it on 6 properties not just one.
Ryan McLean | On Property
http://onproperty.com.au
Email MeWe bought a nearly unit in sydney before the market boom, it was a mortgagee in possession because the previous owner bought it brand new at peak of the market, now he can not afford the payment. basically this guy paid at least 100k more than the price we paid and it was negative gear for him.
good for us that we got it at a reasonable price and it is positive for us.
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