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Terry an FMD is a essentially a term deposite that must meet certain requirements, designed to even out yearly cashflow variations for primary producers, so instead of being in the 47% tax bracket one year then zero the next two years. Money put in is not taxed, it is taxed when it is withdrawn. Minimium term is 12 months It may have changed but the minium primary production turn over required was about 20k. In IP terms it is a tax free buffer , you only pay tax on the interest earned. One thing people fail too realize is that as the money hasnt had tax paid on it , a 6% interest rate is as good as , 12% on money that has had the top tax rate paid on it. Banks arent allowed to use FMD s as colateral for a loan by law, but of course they do take it into consideration.
Get a good acountant obviously you dont have one. Developing the farm will save tax Utilize FMD s the money you save in tax could be spent on Investment properties , depending on how many and LVR s, you could than take out any equity, for running expenses, to buy shares or more property. You can get 6% + return from your FMD you can use for cashflow if needed or you could invest that too. If you save 200k in tax and bought only one property you would have equity and casflow you wouldnt otherwise have. I thnk you can put a total of 500 k each into FMD s.
anntoro wrote:There is a little difference between offset account and line of credit. The main advantage of line of credit is that if you take a regular loan then interest is not charged. The interest is only paid on money actually withdrawn.There is a huge difference You dont need cash flow to service a LOC. Interest can just be added to your account. Which means you have money available for other investments with which you can claim more deductions and increase asset growth. This is the key to wealth production. Isnt there limitations on transactions you can make with an offset. Tax wise there is no difference if you use a coding system every transaction is given a code and what is deductable can be deducted. If you have your loan fully offset what is the point of the loan ? There is also oppurtunity cost having money sit in a bank account.
crusty wrote:Jason Bibby @ JB Global, 6 Riverside Quay South Bank. He has a performance based fee. He can provivde high leveraging (100% LVR) low interest rates and capital protection.Ph. No 0396829499
Jason Bibby @ JB Global, 6 Riverside Quay South Bank. He has a performance based fee. He can provivde high leveraging (100% LVR) low interest rates and capital protection.
HI Angel, I dont agree with your analyis The reason fot the increase in houses on the market is demand, more house have been put on the market because of increasing prices over the last 12 months after 2 years of stagnation. Median prices have risen 6% in the last quarter. A vacancy rate of 1.4% doesnt indicate people are not baling out. What I have been told by agents and developers is the there is alot of demand from retirees and FHBs who are priced out of places like Melbourne. I dont understand how you can say flooding will get worse. The drains just passed the ulimate test. I cant name any other city in the world that can have more than its annual rainfall in a few hours and have its drainage system work so well, that there is such minimal flooding. Many of those that got flooded, got flooded because of stupidity, they built where a blind man could see it would flood, such as right at a low point of 2 long inclines. Then complain the drains arent big enough to handle a 1 in 200yr event. So do we spend 10x more on drainage which probably wont help much just to acomodate those whinging fools. Houses were getting watwer inside because the roof gutters couldnt take the water away fast enough and water was running down inside the walls. Midura didnt come under threat from the river either like places upstream and down stream.
I went to an open in an area I wanted to buy the agent never mentioned the house around the corner they had listed , so I went and knocked on the door the vendors wondered why they never had any inquiry for the many weeks it had been listed and where staggered when I told them of the atitude of their RE . They were desperate to sell as they were relocating for employment ( the next day) and could not make their motrtgage payments. offered a fair price with the condition of acess with in one week and a 3 month settlement, accepted imediately. Deal done in a few minute, as it was positive cashflow I went to a devolper to look at other oportunities found he was keen to to tidy up and finish a devolpement as he had ran out of funds to finance his next project to keep his workers emloyed and stop them running off, so I bought 2 proprties in about 2 hours. Idiot RE lost a lot of commission.
westpac seem keen to lend money at the moment 0.9 discount. will lend 85% without LMI
Land available for residential development like 30 years worth. No scarcity value. Plenty of builders, competition means low buiding costs, means it is better to build your own house than buy one. Shortage of workers retarding buisness and economic growth. Local council may allow residential homes on small rural zoned blocks. Despite green retohric from government backflip on solar energy grant. I think you should look at Swan Hill in preferance to Mildura Angel. While land other than Tower Hill is still available. There is only one way the city can grow Flood plains on 2 sides and river on one. Council owned development on the other. some of whom happen to be involved in real estate Back wards or deliberatly difficult council wont release enough land for development, and their requirements to get a building permit are far more stringent thean in there own development. I would expect land prices to start climbing. Just my opinion . There is still very limited land available near the river at reasonable price but I dont expect that to last long. There is a shortage of good rental accomodation and there have been large influx of immigrant workers there in the last 18 months.
Borrow from who? Zaul
Here is a hint Zaul, to invest you need capital and cashflow. Did you think about starting a buisiness there are opportunities every -where. I come across them almost every week As you have connections in Canada and australia I will tell you about one that involves these countries. You should be able to buy grain augers in canada for about 3k in flat packs ship them to australia assemble them your self or pay some-one a couple a 100 bucks to assemble, should only take about a day. Sell them for 7-12k. I know a guy younger than you doing this some weeks he makes over 10k, if he sells 3 Simply by recognizing oportunity. This is probably the first and last time any-one will tell you about opportunity like this, any good deals, most people will keep them to themseves you have to get of your arse find them for yourself and act. You need to put in some effort yourself.
Ryan I think it is bizzare, that you think it is bizzare for a 24 year old to be saving or investing. I have known lots of kids probably most, saving money even at or before primary school. A lot of 24 yr old are buying houses running buisness. I know some people who were millionares at 24. I cant see what age has got to do with ambition and vision except that the younger yuo are the more you have . I just cant see how retirng at 30 way before you reach your potential shows any vision or ambition irrespective of what other 24 yr olds are doing.
Fantastic Plastic wrote:Very interesting topic Cappy, I've recently been looking at buying a couple of properties in America, not sure exactly where to look, but it certainly makes more sense than investing in Australia. I see what you are trying to do, but you can't leave out some of the expenses. For example you have NO tax in Florida whereas in Australia you do, there will be capital growth thanks to the excessive printing of money and finally, where in the world can you buy a house for $50k with 4 bedrooms that's only 6 years old fully paid off and never have to think about mortgage repayments or rent? AND the best part about it is you can buy a H2 Hummer for $18k!!! USD!!! In Australia you pay more for EVERYTHING!!! From cars to nappies…. its just plain dodgy! I'm so close to leaving Australia, I just need to decide on what and where exactly.Clarke, Philippines got 8 bedrooms for 50k and incredible CG.
Hi HighIncome those returns are gross. Thanks.
I would consider being shop assistent for the same pay as the old age pension, flipping houses in the hope of making 10k, needing a mentor and then wanting to retire in 6 years as a great lack of ambition and vision. Since when has looking a head only 6 years been great vision? Then wasting the next 60 years great ambition ?
Hi High Income Just wondering if you or anybody else had an opinion on investing in a duplex in Groton, Conecticuit Spending about 80K, returns about 1.5k a month, vested interests have said it should gain about 30K in 3 years. The reason for investing there is because it is one of the few places in the US where I could have a manager I would trust. Troy if you read this do you think it is possible to get a loan on property held in the Philippines. I have heard some chinese banks may do this. Thanks in advance.
I would be buying shares at least buy 10 or 20k, consider using put options which is like giving away 10% of your profits to insure against fall in price. There can be large oportunity costs holding savings. If you want to invest in property you will need a buffer, shares are a good buffer. While there are exceptions and bargains do pop up , generally i dont thnk now is not the best time to be investing in property although it appears builders are reducing their prices, as the FHG building flurry is done. You can get good leverage for small outlay and minimal risk with shares. I consider property a long term investment for those on higher income in the current climate, having said that it is good to get a foot in tbe door with property. I would be looking at regional areas at the momment some have had stagnant growth but yeilds are increasing but prices have started kicking up in the last few months. The last place I would be investing is student units anywhere, or houses in outer suburbs, unless you know the area and know you have good value.
T Kline Yes it is a load of crock You can buy houses in australia for under i50k even under 50k, they are cheaper and better buying than some df the houses people are buying overseas in the places you mention and with trhe FHB you can buy houses cheaper than you can oversereas Yes you can buy houses for less than one years average wage Even in places that have all services and facilities you can get anywhere, for 2or 3 times the averge wage. It is like saying you cant afford a car becausethe mercedes benz you want is too dear.
ALF1 wrote:Hi Judi.
Let us not forget the reality of what has transpired in the US economy – the single greatest balloon burst since the Great Depression. The US economy is going to do what it has always done after every great economic depression and recession it has had- they will drag the economy from bear to bull again and the value of their real estate, the amount of available jobs, and rental returns will again return to pre GFC levels in the not too distant future. NEVER before have Australain investors been in such an enviable position of $1 for $1 buying power; US property values dropping across coast to coast to unheard of levels of low purchase price; rentals remain high and strong in the wake of mortgage foreclosers and job losses as many Americans now cannot afford to buy but still must rent. Yes, property management is very different to Oz and things such as LLC's( Limited Liability Companies) but I say if you have one, you can afford to keep it, then hold it because you don't want to look back in a few years commenting on how wonderful hindsight is and if only you didn't ……..
Kind regards,That is not accurate in 1983 their was great buying,with some states such as california bankrupt and public servant not getting paid and A$1.00 buying US1.30.
None of my PMs charge a lease renewal fee for exsisting tenants, and if they tried to I would be getting a new PM.
