[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

June 10, 2005 - 4:59 am

Remember this?

Well – we turned it around. We sold some shares,
put some of the money aside into our home loan – and used it to upgrade our PPOR to bigger (growing family)
and then used some of the money to renovate the unit, and (as someone else elegantly put it) “Shot the dog”

We sold the unit. We got a good price, put the money into our home loan, and are now looking around again.

Just thought I’d share the story –
sometimes it’s better to sell than to keep!

Cheers
ac

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

April 18, 2005 - 11:56 pm

Some Tough decisions to be made here.

Perhaps the following story from my similar situation will help.

We were in the same boat as this mid last year. We had three investments that were neg geared.

We were out of cash. Had about $1000 left of holding costs, about 2 months worth, and after that? could see danger up ahead.

1 unit not renting well, daggy, underperforming, would be hard to sell.
1 house renting great, but neg geared, but growing in rent, and cap growth nicely.
1 margin loan share portfolio doing well but costing us too much per month.

Add to that new baby, 1 income, Hecs debt, car loan.

After some tough soul searching, lots of talk with advisors, paper scenarios, loss of sleep:

We sold the shares and made some gains there.
This stopped the bleeding a bit.

Finished paying off the car – and finished paying off Hecs, this stopped bleeding even more.

Then to stop the bleeding even MORE – we decided to sell the underperforming unit. (Going backwards!)

We used some money from shares to do up the unit and have now sold it.
(still in that process of sale – nearly finished)

Will take most (70%) of the money and put it to our homeloan and give us more equity and accelerated repayments – but we are spending a bit too!
Got to have some reward for being skint and stressed for ages!

I guess the moral of the story is:
Shoot the dogs!
Adjust your life style if necessary.

If it is Underperforming – and hurting you too much – then you could consider selling.

If it is going well, and you see potential for gain, you could consider adjusting other areas of your life to make up for it.

It’s a risk I guess. We decided to keep one and sell the others.
Once that’s finalised, we’ll go again to the market – older, wiser, and more savvy!

I hope the story of what WE did helps you?

Cheers,
ac

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

April 18, 2005 - 11:12 pm

Originally posted by freestone:

As the market adjusts to the new housing scene and properties start to drop in price we are now in the position to buy a property for short term gain through renovation.
Does anyone have any suggestions as to one or two of the better renovating teams to contact to get some tips on what to look for in getting the best out of your reno?

boatie

Reno Kings – http://www.renos.com.au

Buy both books, subscribe to the info and ask lots of questions. Their advice is good, and they’ve been doing it a long time. They’ve been around for quite a while and have made lots of money in the process, and helped many others.

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

March 16, 2005 - 7:24 am

Over a nice lunch (not just liquid mind you!!) I talked with my accountant. A great way to pick someones brain and be guided away from dangerous assumptions…

Amongst other things, I floated the idea of selling my house to a trust and renting it back. Short answer: No.

The ATO looks very dimly on this they issued a warning to accountants late last year in fact – as the anti-tax avoidance laws state all transactions must be undertaken for a valid commercial reason – not JUST to avoid tax. They would view the sole reason of this is to turn a non deductible debt into deductible, and therefore would classify it as tax avoidance. Essentially they are right, the only reason I would want to do it is to avoid non-deductible debt.

My accountant said – it is like waving a flag to a bull and saying “Audit me!!, Fine me!!” which no one wants.

If it was done for a valid reason, like this example:
I am going to move to another house and want to turn it to an IP, and sell it to the trust, and then rent it to someone else –

then it would be kosher.

I am still going ahead with the HDT with limited liability company as trustee for asset protection – can still do neg gearing within it, using the purchase of special units type. This is perfectly legal and kosher.

NB – loan in my name, I buy units from trust, company as trustee for the trust buys the property. All this settles simultaneously, so as far as the bank is concerned – they lent money to buy a property.

I will be a shareholder of the company, and so will my wife, $2 shares issued, and I will be a director of said company.

It will cost me about $2300 or so to set up with a valid trust deed.

Ongoing costs – tax filing, asic company filing etc etc.

I will set it up to do various asset accumulation with as we are about to enter a buy phase.

Cheers,
alwayscurious

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

March 14, 2005 - 3:24 am

Yes.

Paul Ramsley is at Springwood, opposite Ikea. (south of Brisbane)

The business name is Rockland Business Consultants
http://www.rockland.com.au

He is a property investor himself, and partnered also with a seperate business is an investment advisor – specialising in limited property trusts.

I like using him because he knows property, has a keen interest to get the best deductions possible because he has property himself.

I am also discussing setting up a HDT with PTY LTD company as sole trustee, which he so far has been helpful with.

PM me if you need to discuss further.

Ciao Alwayscurious.

PS – where you guys at the Brisbane launch of Steve’s 2nd book? where he read “oh the place’s you’ll go?”

PPS – Jo, FYI – Bechmere is unfortunately North of Brisbane – not too close, nearer Caloundra (Sunshine Coast) than South Brisbane. I am sure she’s good though!

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

March 12, 2005 - 5:17 am

Originally posted by Terryw:

alwayscurious

Another pro: You could rent the house to yourself furnished and then claim decpreciation on your big screen TV etc.

Another Con is Land tax, and you would have to pay your trust market rent, so over time it would become cashflow positive.

It may be a good idea if you only intend to live there for a while, but if you intend the property to be your final residence, then losing the CGT exemption would hurt too much.

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Fantastic. So if this house is seen anyway as a “Stepping stone” then it would be a good thing to do from that angle.

Secondly – re land tax – is this payable immediately or is it once the portfolio of the entity reaches a certain $ amount per state?

I believe that is the way land tax is for real humans, is it the same for other entities or is it payable immediately.

Cashflow positive? Not such a big drama for this forum I think can always distribute earnings to lower income partner. Children under 16 I understand attract a savage 66% tax on distributions..

Terry, like your idea about the furniture. I don’t think one of the trustees would approve of the big screen TV – I think the court battles wouldn’t be worth it though

Cheers All. Off to pick my accountants brains over lunch on Wednesday (my shout) – will take this thread with me.

AC.

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

March 11, 2005 - 6:54 am

Turn your own home into a IP.

Here’s a (non original) thought.

You could “Sell” your PPOR to the HDT.
(at market value for “arms length”)
(costs = refinance costs, stamp duty etc).

Then once the entity owns it, rent it back
(at market value for “arms length”)

This turns it into a tax deductible asset. Kiyosaki be blowed!

Then if you move on, it is already an IP and you can rent it out straight away.

Pros:
+ Tax deduction on interest of PPOR loan
+ another “boat” in the water
+repairs are before tax.
+The renters are good and pay on time,
+plus maintain the place just how you would

Cons:
-If sold again, the HDT would pay full CGT.
-(lose the CGT waiver for PPOR)
– Must maintain arms length.

Thoughts?
alwayscurious.

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

March 11, 2005 - 3:54 am

I would very much like to see some more discussion in this thread also. The author has succinctly asked the right questions that are mulling about in my head also, and I look forward to seeing some answers.

Cheers
ac

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

March 10, 2005 - 9:53 am

GO Hard John! Well done and I hope it turns to Gold for you – I’ve just finished my first renovation and I like the results. It’s hard work but lots of fun if you like mucking about with Power Tools, paint etc. Plus the results can be great.

Warning: About 1/2 way through you might experience a slump as the place looks like a mess, and you’re initial excitement may have worn off.

Have a coffee. Have a think about why you are doing this. Have a talk with your loved ones. Go out for a meal.

THEN GET BACK TO WORK!!

Go well. Look forward to before / after photos?

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

March 10, 2005 - 9:41 am

Correct me if I am wrong – but

If you don’t claim it, I think you still have to pay the same capital gains tax as if you do?

it’s not the ATO’s problem if you don’t claim it – they offer it to help private investors house tenants.

OOPS – Scott – you got to it first. Should have read your reply more closely.

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

March 10, 2005 - 9:39 am

Slap on the wrist???

I hope they get a good solid kick in the goolies.

Ie – a big fine.

doubt it though – with the agencies being ‘policed’ by the REIV – who also happen to receive money from teh agencies and are advocates for the agencies.

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

January 18, 2005 - 6:05 am

As useless as a hatfull of busted ars*****s!

My fave:
As happy as a dog with two tails!

“It’s Easier to ask forgiveness than permission”

My Dad’s (From Jackeroo days)
All over the place like a mad woman’s s**t !

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

January 7, 2005 - 3:39 am

careful with dictaphones. Recording someone without their knowledge goes against some privacy laws I beleive. I think you may have to have a warrant to do so.

Just a thought, not entirely sure on legality.
Keep it legal.
If you do everything above board – ie a diary is fine, but recording may or may not be.

ciao

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

October 18, 2004 - 3:01 am

I watched an interview with “Crazy John” ilhan – the mobile phone guy. Basically he grew up in a tough scenario and his attitude is if someone says “you can’t do that” He says “Pardon?” What did you just say? And a dangerous look crosses his face….

Red flag to a bull!! Then he goes and does it.

I like that attitude. Too often I’ve been told the same thing – you’ll never be able to get a job in today’s market – they’re laying everyone off, “we’ll be next”, you’ll never afford that dream home,
Bollocks. Bollocks Bollocks Bollocks.

And more Bollocks! I used to take it to heart and think, heck they’re right!

Now I just smile and say “watch me”

I just finished reading ’12 ordinary millionaires’ it’s a great inspirational read.

Get started and become a finisher mate! Focus you’re eyes on the goal.

You may have to leave some people behind to get there.

Go hard.
Cheers
alwayscurious.

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

October 15, 2004 - 5:06 am

Remember also that the real estate agent is now acting for their interests and may try and pressure you into closing the deal and accepting the offer.

This is because they have a commission (almost) within their grasp and will work hard on the easiest party to condition them into a sale.

That party most probably is you at this point. Whatever your choice is – stick to your guns and don’t let anyone else put the guilts or pressure on you – it is YOUR house and your decision after all.

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

October 15, 2004 - 5:02 am

Sounds like a scam. If you’ve had the pest control reports done every year tell them that you will happily provide them with the reports and that they can deal with your pest company. Another bargaining point is that you were prepared to buy the house with the existing damage and have been VERY careful *yearly inspections* which is more than most.

You have done the right thing – be confident in your decision.

The purchaser is just trying to reduce the price down. The vehicle for this happens to be
a) quick settlement
b) existing damage which can remain till the end of time without problems.

This is quite common technique – I know someone who had a reduce price because of a damaged soffit board (1) which would have cost $300 to replace (including labour). The purchaser asked for a $300 reduction in price!

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

October 15, 2004 - 12:50 am

Hey Dan.
Firstly –
You’ve got some good ideas here – keep going! you’ll get there if you persevere.

A couple of points.
Quantity surveyor is well worth the money as they find every little bit of depreciablity in the house such as light fittings, switches, taps, blinds etc.

They cost about $400 + GST or more I think. More than $200 anyway.
They cover your claims for depreciability which is well worth it.

With fibro houses – there is usually asbestos if it’s over 25 years old which many people don’t like due to health risks.

But if it’s painted, and left alone – it’s usually OK. Best not to disturb it they say.

That’s probably why it’s cheaper.

Timber homes may have more maintenance in the forms of painting and termite control than brick homes. That’s why they are cheaper.

But if you weigh up the costs and benefits, you may find that these houses are fine! Read Jan Somer’s book – she doesn’t necessarly advocate one or the other. Cheers & keep going.

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

October 11, 2004 - 1:11 am

Obviously you enjoyed it twice as much as I did emcdonald!!

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

October 10, 2004 - 11:31 pm

I was there!

I was wearing a white shirt with big cuffs, and I am a fairly short guy with dark hair, glasses, and a big grin.

I was sitting on the right hand side, about 5 rows from the front

It was a fantastic time.

I met a few really great people also!

Thanks Steven & Dymocks for putting it on.

cheers
alwayscurious
“oh, the places you’ll go”

[alwayscuriousParticipant@alwayscuriousJoin Date: 2004Post Count: 80]

October 10, 2004 - 11:12 pm

Hehe, I found my english deterioated significantly after living overseas for a year.

I dropped into the local patios and I find myself still doing it – even if the person I am speaking to has perfect english!!

That made me giggle a bit. I remember this one chap who was from elsewhere in Asia who had to run from the law, ended up in China ‘teaching english’ – I couldn’t understand him, and I certainly couldn’t understand his graduates. I didn’t have the heart to tell them that it wasn’t their fault, it was most probably their teacher!

But I had a crack at speaking Cantonese, which caused many people to fall about the place and laugh at ME.

I remember asking politely “what is your last name (honorably surname)” but I asked “How is your Ghost?”

[blush2]