[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 27, 2014 - 9:24 pm

Just food for thought. It’s good to work through all the options before jumping in. If you are looking to use the equity in your PPOR, you might like to think about the CG of the area, so you can keep pulling equity out (I say that, keeping in mind that you don’t want to overcommit the PPOR).

There’s another property investing forum – somersoft.com.au. I think between these 2 forums you should get a number of recommendations of accountants who are savvy in how to deal with investing funds.

$100K income is $1.7m invested at 6% yield – very achievable from a $1m base. If you keep active in learning new techniques and how to manage the IPs, $2+ should be achievable in 15 years. Just keep active on the forums and read lots (Steve’s newest books are a good starting place, but there are a number of books, techniques and authors)!

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 27, 2014 - 7:51 pm

What is the vacancy rate of St Mary’s? The investor interest in the area could have influenced whether it is a renters or vendors market. It could also be a bit of a more difficult time to rent as everyone is usually settled this time of year – but I am saying this more in principle rather than as a certain comment about St Mary’s per se.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 27, 2014 - 7:45 pm

bns wrote:

Thanks so much loan ranger & superAndrew for getting back to me!

For your information we are 30 years old, live in QLD and earn a total of 160k pa (80/80) = DINKS. Our (my) year goal is to have a big enough passive income by age 45 to retire or semi-retire atleast. I know it’s ambitious but where there’s a will there’s a way right!?

Ok so i’ll do some more research into family Truts and their yearly fees etc…

Oh BTW we also have just over 1M in shares split 50/50 (yes we consider ourselves very lucky)

A few questions for you loan ranger (very wise ranger). If you don’t mind I’d really appreciative your feedback.

1. Is there anyway we could use property to reduce our CGT once we sell our shares? I suppose the only way to reduce the CGT is to drip feed them out slowly over a few FY’s?

2. So lets assume I pay cash 100% for PPOR of say 1M. I sell half the shares and use that 500k for IP’s and keep the remaining 500k in the market to collect divs etc. Would that be a wise strategy?

3. I had a little read up on NRAS (only 40,000 avail I believe) and TBH they seem like they may be difficult getting our hands on some. Forgetting NRAS – if we were to purchase standard rentals around the 400k mark as you suggest, what sort of figures would that present?

4. With all of the tax deductions, how would this all work out should we be able to retire @ 45 and have no income to offset the tax against?

Once again your calculations have blown my mind – thanks so much for your input.

BNS

What passive income/year do you want from your IPs? A passive income of $150K/year requires $2.5m assets generating 6% yield. This should be achievable in 15 years from a $1m base (you only need to generate an additional capital growth through market forces and manufactured growth).

The only way you can use property to level the growth in the shares is to buy a loss making property – one that you sell for less than you bought it for. CGT is just a cost of investing. As you say, it would be best to drip sell the shares so that you aren’t slugged with huge CGT bills. Talk to your accountant about how to manage the shares and properties going forward. Hopefully you have an accountant knowledgeable in the various investing strategies – if not, put a question in the finance section on the forum and people will suggest accountants they use.

Do you need to buy a PPOR for $1m?? Could you not buy something a little cheaper and have more cash for the investing? If you use more of the $1m for investing, you will probably get further in the long run rather than buying big now to keep chasing going forward.

Read widely on a number of strategies. Do a search through this forum on NRAS and other strategies to research a number of perspectives. There’s more than one way to reach the goal. Also read about a number of different investment strategies – shares, property, cash etc etc. Each have their place in the long term wealth creation path. You have time.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 27, 2014 - 7:33 pm

I would actually go a little different and put some of the money towards CF+ve properties, then another portion towards quick-turn deals. While this is a very active approach (as opposed to just buying CF+ve properties and letting them go), you will keep generating profits to buy the next property.

I would also be careful with using all your PPOR equity towards the IPs – it puts your PPOR at risk if you should either make a choice that doesn’t come off, or if the market turn down. By restricting the equity in your PPOR to say 50% it forces you to keep the IPs working.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 23, 2014 - 8:20 pm

Corey Batt wrote:

The big thing for me is maintenance requests, a PM should be able to handle these to make sure any *real* issues are resolved quickly, but also filter out any unnecessary requests/issues.

+1

This really urkes me. I am currently trying to get a fence repaired, at the request of my tenant and we have had to do half the PMs job for them, then they can’t even do their little bit – the saga has been going on for over a year

*(^&^(*&*%#%^%&^

The only thing that makes me keep them is that the tenant is great and I can’t change REA without kicking the tenant out first…

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 15, 2014 - 6:13 pm

Tamara43 wrote:

Hi Chris
Thanks for your feedback. Yes you are correct re: my strategy. What sort of education materials would you recommend? Do you use them and are they effective?

Hi Tamara

I haven’t developed any materials as such, but I was thinking along the lines of a handout to the owners to introduce them to the idea (since it is quite new to most), how it can benefit them, how you would manage the process and how they would be involved, and risks (to provide balanced information). I’m sure a simple information page for novices has been developed trough the VF groups or Tony Cordato.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 12, 2014 - 11:07 am

mattsta wrote:

The strategies mentioned above are sound. You can use a home equity line of credit (HELOC) in order to borrow against your existing PPOR or first IP.

My suggestion to to focus on the first property and make sure that is good. Take is step by step, and the first step would be to get your first IP. From there, it gets easier to get more properties since you’ve already done it the first time.

Agree in principle. I like to make sure my IPs are doing the work rather than using the PPOR as a big credit card. As soon as you can, refinance the IPs and keep them on the line, rather than keeping the PPOR’s credit maxed (I appreciate that the loans against the PPOR turn from non-deductible to tax deductible). If it all goes pear-shaped, you could sell the IPs and at least you still have a roof over your head!

By also keeping your IPs working, you will always be thinking about strategies to improve the IPs (eg are they still in a growth area, can you manufacture some growth to get equity etc). I realise this is slightly off track for this thread, but I thought I would throw in something as you start your path.

Englo also makes a great point – talk to lots of investors and find out what is happening on the ground both in strategies and market movements. A good place to start may be http://www.propertymeeting.com.au/ if you’re in a capital city. These aren’t the only meetings in property investing happening but can be a start to meet like-minded people close to you.

• This reply was modified 9 years, 10 months ago by  ChrisA1. Reason: More info

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 12, 2014 - 10:52 am

Hi Shank

Not sure about the living away from home allowance, since you are choosing to go to Sydney for work, rather than work requiring you to go to Sydney for their purposes (this could be where your accountant was getting to).

But as far as living outside your PPOR while you are working, as long as you rent while in Sydney, you can rent out your current PPOR, and claim expenses on the house as a rental while you are not living there. You would then come back to live in your PPOR and everything continues.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 10, 2014 - 8:34 pm

Tamara43 wrote:

Hi Guys
When speaking with sellers I’ve tried a number of things to get them to agree to sell creatively, but I’m looking for new ways and new ideas. All ideas welcome.

I may have missed something, but you would be looking to go into a JV with the seller to sell the property creatively??

What education materials do you have for the seller? If they don’t understand the concept, they’ll baulk every time, especially with the bad rap most creative techniques have on the internet. Since it isn’t as well known as in the US, people just don’t understand it.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

July 10, 2014 - 8:03 pm

u36ma wrote:

The biggest reason for me however is that Penrith is at the foot of the Blue Mountains, so there’s not much further they can build out there. Limited land will result in higher price increases in future.

Agree. I have IPs in SW Sydney and while I certainly wouldn’t change my decision, there is a lot of land being opened up in the area which will lower the CG for a number of years. Good to have some scarcity, combined with investment going into the area.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

June 28, 2014 - 8:59 am

I am currently selling an IP and the advertising is paid when the property is sold or when the sales contract is terminated (if I decide to withdraw the property from sale before it actually sells). How the sales process is managed could depend on what state, even city/location you are at. If the area is large enough, I would get plenty of quotes to ensure you’re not being taken for a spin and, as others have said, understand how they are coming up with their prices and their marketing strategy.

(I could understand the advertising costs being required up front as these costs are usually just being passed on from the advertising streams – RE.com.au, paper marketing etc etc and the REA doesn’t want to be left holding the cost for these services when the sale could take months to get to completion).

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

June 18, 2014 - 8:39 pm

Hi Hot Stuff

Are you able to value add (eg renovate) the IP to increase your rental rate?? Are you charging market rates for the rent? As SuperAndrew says, it is costing you to hold the IP (so only a help to reduce tax) and unless you are able to improve the IP to increase the rental yield, it will take an awfully long time relying on market forces to get over the hump.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

May 31, 2014 - 3:40 pm

Great advice in all the posts above. If you’re still looking for information about mentors, do a search on ‘mentor’ in this forum’s search function and you’ll come up with other threads about various mentor/coaching/advice programs and comments about these programs. Also keep reading and posting on the various sections of the forum – great learning and the only cost is your time!

For example, a five minute search on ‘mentor’ brought up a lot of topics, including:

https://www.propertyinvesting.com/topic/4408899-result-program/
https://www.propertyinvesting.com/topic/4990786-looking-for-a-mentor-7/
http://www.propertyinvesting.com/topic/4985493-mentor-needed-8/
https://www.propertyinvesting.com/topic/4934469-mentored-by-property-masters/

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

May 27, 2014 - 6:46 pm

Jpcashflow wrote:

Daniel
Let the pm work for you, it’s a tax deduction any way.
And use your time to focus on what you really want.

Agree here. You would have to understand the tenancy laws very well and be able to act quickly. How close are you to the property? If you are close by where you can respond quickly, its worth it, but if you have to continue relying on out of town tradies then it may not be worth it unless you have good relationships with the tradies already. It could also get messy if you regard these tenants on friendly terms.

It might be worth asking Jamie/his wife about what they had to know and go through before taking the plunge.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

May 21, 2014 - 6:11 pm

Hi Sasharif

You can always go to different agencies to the agency that is managing the property. It is smoother to use the same agency as the one who is managing the property as the sales team can easily talk to the rental team, but you can always use whatever agency you like to sell the property. If you decide to go with a different agency, you just need to let the PM know that so-and-so from x agency is selling the property and they will need to work out arranging inspections etc.

Cheers,

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

May 16, 2014 - 3:32 pm

Hi Sasharif

You could approach a number of REA in the area to get a feel for the market at the moment. Remember that 2007 was before the GFC and house prices don’t always go up, they stagnate sometimes and decrease at other times. You could also use websites like onthehouse.com.au to see what they approximate the selling price to be, or get an RP data report for the address.

You could otherwise keep holding it until prices return to the level you want, but that’s crystal ball gazing.

Cheers,

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

May 16, 2014 - 1:47 pm

startofinish wrote:

These are the outgoings for a cheaper (Still 2×1) apartment in the same area to get an idea:

Approximate outgoings:
Council rates: $509pa
Water rates: $539pa
Body corp: $2,344pa
Total = $3,392pa

I made an allowance for expenses of 85*52= $4420pa …. which is probably a bit on the lower side, but keep in mind that I assumed the interest rate was 6% when bankwest offer a double deal home loan rate of 4.88% (at least they did when i checked last) which would bring the repayments down to $308 for the first three years, $35pw less than the number I used above.

$85/week for expenses?? What about insurances and vacancies?

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

April 30, 2014 - 4:12 pm

Interesting comments there Cliffe. While I agree with never starting on a whole number, the numbers you provide are quite unique, do you need to be that specific, or can going to the nearest 50 be enough? (I’m thinking about not p***ing off the REA. I like the comment about finance as that can be a deal maker or breaker.

• This reply was modified 10 years ago by  ChrisA1.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

April 25, 2014 - 6:56 pm

Hi Daniel

Your post didn’t come through correctly (or at least it can’t be understood). You may need to type the question in rather than cut and paste.

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'

[ChrisA1Participant@chrisa1Join Date: 2011Post Count: 172]

April 21, 2014 - 8:41 am

Hi Trisha

It sounds as though you’re looking for a buyers agent. Have you searched the forums for a buyers agent who is knowledgeable about the Brisbane market. I am not sure what they are charging for their services.

Cheers,

ChrisA1

Persistence is 'to keep on keeping on, no matter how hard the going may be'