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Josh
Intrigue wrote:PCMelbourne….. what is this PAYG Variation = 1% tax?If you can forecast the expenses on your investment property portfolio then you can apply to the ATO for a PAYG variation.
For instance on our properties i listed all expenses, forecasted all negative gearing numbers + all depreciation for this financial year.
All numbers were given to my accountant to apply to ATO for PAYG Variation.
It took about 2-3 weeks to process.
Thereafter my employer recieved a letter from the ATO forbidding them to withhold any more than 1% of my income tax.This is completely legal. At the end of the next financial year, we still have to do a tax return of course.
If the official tax return of deductibles (expenses, negative gear, depreciation & work related expenses) comes up short, then obviously I will owe the tax department the difference.But in the meantime the extra cashflow per month has been really helpful.
brisbaneJosh wrote:Great comments PC_Melbourne. Your approach seems pretty similar to the approach I would like to take! Certainly a lot of good advice on this thread for Hendrick2.Good on you for giving it a go….
Just a couple of quick questions if you don't mind!
1) What level of deposit were you putting down for each?
2) What finance structure did you use?Trust etc?
3) Were your loans interest only?Like yourself have read much over the past few months and would like to hear from people that have only just taken the plunge recently!
Your help here would be much appreciated
Josh
Hey there, happy to help.
Answers to your questions.
– I always aim for max 5% down for each property. Only failed for 1 of them, where they insisted on 10% down.
– No specific finance structure as such. We considered a trust, but had heard that whilst Trusts provide max personal security, it is painful to get loans against them, and tax time was most troublesome too. Right now, all properties are in one of our names. Our next round of purchases will have new properties in the other persons name.
– We have 1 Interest + Principal. All others are Interest Only.Our objective to this whole game is no different to anyone elses really.
We want to acquire as many properties as possible in the next few years.
Work like dogs to pay them off, but also having them pay themselves off with taxation strategies.
Our magic number is $5K cash in income per week. Then we can retire. We are only at the beginning of our journeyHope this helps.
PC_Melbourne wrote:brisbaneJosh wrote:Great comments PC_Melbourne. Your approach seems pretty similar to the approach I would like to take! Certainly a lot of good advice on this thread for Hendrick2.Good on you for giving it a go….
Just a couple of quick questions if you don't mind!
1) What level of deposit were you putting down for each?
2) What finance structure did you use?Trust etc?
3) Were your loans interest only?Like yourself have read much over the past few months and would like to hear from people that have only just taken the plunge recently!
Your help here would be much appreciated
Josh
Hey there, happy to help.
Answers to your questions.
– I always aim for max 5% down for each property. Only failed for 1 of them, where they insisted on 10% down.
– No specific finance structure as such. We considered a trust, but had heard that whilst Trusts provide max personal security, it is painful to get loans against them, and tax time was most troublesome too. Right now, all properties are in one of our names. Our next round of purchases will have new properties in the other persons name.
– We have 1 Interest + Principal. All others are Interest Only.Our objective to this whole game is no different to anyone elses really.
We want to acquire as many properties as possible in the next few years.
Work like dogs to pay them off, but also having them pay themselves off with taxation strategies.
Our magic number is $5K cash in income per week. Then we can retire. We are only at the beginning of our journeyHope this helps.
Actually should clarify the previous reponse in quiet reflection.
Whilst we always aim for 5% down & interest only loans. Thats not actually how we did it in the last round of purchases.
In that last round, we deliberately paid our 1 bedroom unit off outright at just over $150K So that this property wuz unencumbered.
I called this the ‘Sacrificial lamb’ in place deliberately to act as security for other properties + supplement cashflow for other properties.With the sacrificial lamb acting as deliberate security. We secured 2 new townhouses @ just over $500K each.
We did put a 5% deposit down
But on settlement required zero money down, because the LVR between the new properties + the lamb got us to 80%At the time, It made sense to me, that putting $150K down to buy a place outright, to create a portfolio of 1Mill+ in new aquisitions that still met the 80% LVR seemed like a win win situation all round.
This strategy worked out for us, because our properties have gone up in the last 16months.
If my calculations are correct, within 6 months or so, we will be able to partially discharge the sacrificial lamb to use it as security on next purchases because the value of the other two are almost at 80% LVR on thier own.secureserver1 wrote:Hi Hendrick,Personally I start with http://www.realestateinvesta.com.au – they source all real estate listings from all the major real estate websites and allow you to search with multiple parameters such as reduced prices, mortgagee sales, sales that are well below the median price point for an area, yield, vendor finance offerings, properties with development potential and more. Makes it much simpler to find the better deals in the first instance. Hope that helps.
I agree with secureserver1, http://www.realestateinvesta.com.au is a great resource and well worth checking out
AJay7 wrote:secureserver1 wrote:Hi Hendrick,Personally I start with http://www.realestateinvesta.com.au – they source all real estate listings from all the major real estate websites and allow you to search with multiple parameters such as reduced prices, mortgagee sales, sales that are well below the median price point for an area, yield, vendor finance offerings, properties with development potential and more. Makes it much simpler to find the better deals in the first instance. Hope that helps.
I agree with secureserver1, http://www.realestateinvesta.com.au is a great resource and well worth checking out
Yes, that's a good website, I was using it as well. Then once I have the details of the property, I am trying to look for similar properties for rent in the area – so I can estimate the rental income.
After that I use http://www.RealEstateAnalysisFREE.com – a free Real Estate Investment Software to see what are the calculated returns and NPV of the investment. I will do this for at least a few similar properties and then compare them to see what would be the best investment.
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