Hi Bigfella,

As Simon has indicated the purpose of the loan is to buy an income producing investment and as such the interest on your deposit is deductible even though, at this point in time, the property is not earning an income.

The Steele case is a good reference point in instance like this when the taxpayer (Steele) won the right to claim…[Read more]

Hi Smithy,

I would suggest that Chan Naylor will charge for their advice time – I would be surprised if Nick didn’t also charge for their time.

I would also offer Coasty Mike as a possibility – his posts indicate a depth of knowledge.

Of greater concern is the quality of the advice – cheap doesn’t necessarily equate to good. You will probably…[Read more]

A couple of quick points – yes The Investors Club has been around for 10+ years now with over 6500 purchases made.

Yes The Investors Club does market researched properties in major areas – but there is no pressure applied.

Fees earned through purchases are used to provide the fabric of support that exists for members before, during and after the…[Read more]

Hi John,

I believe the difference here is that the property was initially an IP.

As I understand it when a property first exists as a PPOR and then becomes an IP the process you describe is undertaken.

Now we will have to wait for an expert to come along and clarify this for us all.

Mark where are…[Read more]

Hi Jules,

As Terry said borrowing 40% will make it easier to secure finance.

Given the uncertainty of your plans post, 12 months, I ownder if you wouldn’t be better off using the 40$ difference between an 80% and 40% and placing these funds in an offset account (note I assume you have this in cash).

This will enable you to reduce your interest…[Read more]

Originally posted by Kevy:
His advice is to keep paying the loan but I want to go buy the next 1.

I keep getting you have the deposit but serviceability is an issue. I have $200k in equity and earn $78k.

Hi Kevy,

It sounds as if your FA has chosen to direct you into a very safe investment strategy – is this because he/she doesn’t know of your…[Read more]

Hi Lei,

As Terry indicated rolling over CGT is not an option with property investment (see comment below).

The capacity to rollover gains is something that exists for business owners provided they meet the necessary guidelines.

Property investors who rent out a property and receive an income (rent) are not entitled to rollover their CG.…[Read more]

Hi Newstart,

Buying and selling a PPOR is a little different to buuying and selling IPs – primarily because the tax issues and purposes of the purchase are different.

I would counsel someone against taking on ‘large’ (relative to your circumstanes) PPOR debt as it is all paid for with after tax dollars.

In your circumstances sell your current…[Read more]

Hi Chockey,

Read page 52 of the CGT guide in the bottom corner there is an example of how to work your gains out.

In a nutshell the total gain is multiplied by the number of days it was rented and divided by the total length of time the property was owned.

Eh $100000 gain – rented for 60 days – owned for 300

100000 X 60/300 = $20000 taxable…[Read more]

Hi Scotty,

Certainly not claiming to be an expert but before we can answer your question Scotty – we need to know what you would hope to achieve through property investment.

It is certainly a case of ‘different strokes for different folks’ and as such your preferences etc could create a different plan of…[Read more]

Hi Matt,

Certainly one for the accountant.

In a nutshell as a business/company you will not be eligible for any CGT discount which, if you choose wisely and sell, could be a large impost.

If asset protection (and there are tax benefits too) is a concern I would recommend so research on ‘trusts’ – this structure may be your best option from all…[Read more]

H JG,

If you mean your CGT question it has not been deleted – just moved to where it belongs in ‘Legal and Accounting’

https://www.propertyinvesting.com/forum/topic/16948.html

Lost count of the number of times I move people’s posts as they were originally placed in the wrong section.

I used to provide a PM to let them know but very few people…[Read more]

Originally posted by Torachan:
In the last real crash it was possible to buy a house for 10% of it’s bubble price.

Hi Torachan,

That is a big call – buying property at 10% of its value.

I would like to hear where the property was and when the crash occured – can you enlighten me…[Read more]

Hi Veronica,

Ditto Terry’s comments. If cashflow is an issue have you considered some/all of the following?

1) Convert your loan to I/O. This will save some of the outgoings.

2) Check you current rent to ensure it is at market rate. Some PMs and/or owners lose touch with what the rest of the market is doing and this could be costing you…[Read more]

Hi Greg,

Worked for mine. It is a 33 page pdf file with lots of photos – total size 2.95mb

Thanks for the heads up Michael.

Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958

Aside from the tenant or not to tenant question there is also the question that needs to be asked “Why sell?”

Entry and exit costs in real estate are significant and as such selling, without good reason, will see you throw away some of your hard earned gains.

Peter Spann has three reasons for selling – bought a dud, you get an offer to good to…[Read more]

Originally posted by JenD:
Is it possible that the 10% deposit is the real estate agents’ policy, or are they just trying to bluff us?

Office policy or not – the law says the size of the deposit is negotiable. Put down what you want.

Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958

Hi Jen,

As Eric has indicated there is no requirement to pay a deposit of 10% – your agent is looking after his/her own interests.

http://www.consumer.vic.gov.au/CA256902000FE154/Lookup/CAV_Publications_RealEstate_Buying_and_Selling_a_Home/$file/realestateguide.pdf

Have a look at page 52 which clearly state a deposit of 10% is normal but it is…[Read more]

Hi Dan,

Just adding to previous comments.

Borrowing costs are deductible and apportioned over five years or the life of the loan, whichever is the less. As such if you buy and sell the property within a five year timeframe you could claim more than the 20%/annum.

Charges listed as borrowing expenses are loan establishment fees, title searches,…[Read more]

Hi Landt,

Well done – great to see the ‘fire in the belly’ again. As you said – another one will come along.

Out of interest how did your price compare to the auctioned price? Were you in the ball park? Was the property passed in or sold to the highest bidder?

Keep your eyes on this property there may be a disillusioned seller in the offing if…[Read more]