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A bit hard to determine just from the above information you have provided
If you can provide the following information, we might be able to give you a rough guesses
- Where is the property located?
- How much is it renting for?
I believe that in the event that we have another GFC, interest rates may rise, but the government and reserve bank will try to do everything in their power to stimulate the Australian economy, and this might mean slashing interest rate and introducing various stimulus measures. Unlike other western countries around the world, Australia has a lot more room to lower interest rates. No one has a crystal ball and ultimately it's up to you to do your own research and come to your own conclusions.
Cool
Any particular ones you would recommend that is located in Ballarat?
I was curious about this myself as well
Staging homes is definitely a great way to sell more quickly for a lot more money
However, finding businesses that hire out furniture has proven to be quite difficult
Not sure if there is a company/business out there that specializes in staging homes
If not, this might be a great business opportunity, provided there is enough investor demand
Naremburn123 wrote:1 – If I buy the house next week – and exchange – Can I then purchase the property under a trust or company structure once I settle? As I haven't set it up yet.If you aren't sure about how to structure your investments, the 'and/or nominee(s)' clauses could be useful, but make sure you double check this with a qualified professional in your state, so that you don't pay double stamp duty.
Naremburn123 wrote:2 What is the best structure? Should I buy them under a company structure or some sort of trust structure?Different structures have different benefits and drawbacks, and it all depends on how much asset protection and flexibility you want in relation to the cost.
However having said that, I believe holding appreciating assets in a discretionary trust with corporate trustee is much wiser than holding it in a company structure, as you are able to distribute income and also access the 50% capital gains tax discount.
Yes…
Having the IP loan solely under your name will mean you can claim 100% of the interest payments from your income, whereas having it with your wife's might mean you can only claim a fraction of it based on your income, and the other fraction based on your wife's income. Whether that fraction is 99%/1% or 50%/50% I'm not sure, but my guess is the later.
May I ask why you want to place the IP loan under both your names? From what I've read and heard it's better to have personal assets under the lower income partner, and investment assets under the partner that is earning more income.
xdrew wrote:Having watched Nathan Birch .. he's doing what i would have done if I'd been 10 years younger and knew what to do at the time. The only thing that I would have to change from that for a 30+ investor is that you buy smarter .. buy with an intended 1yr turnover (tax reasons). You've got less time to work with the property and you need to build your bank. Do it smart and you cant go wrong.
Thanks for your post Xdrew
If you don't mind me asking, could you elaborate on the part about buying with an intended 1 year turnover?
I was thinking about using the Renovation strategy to build up my piggy bank, and some of the questions that came to mind were:
- Does the costs (50% CGT) saved from holding a renovated property for +1 year, outweigh the holding (interest) costs?
- Is it feasible to get early access to a property, renovate it, and then sell it to another person (via 'And/or nominee' clause), so that you can save costs associated to stamp duty and maybe split this saving 50/50? Alternatively, could you use an 'options' contract, and would the cost associated with having the option written up by a lawyer, outweigh the costs saved from stamp duty?
- Since I am just beginning should I buy the properties I intend to renovate and resell in my own individual name, or would it be best to setup the right structure in the first place E.g. maybe a company that is held in a discretionary trust with corporate trustee?
Just watched some Hans Jakobi DVDs a few nights ago, and I remember the accountants talking about something along the lines of asking your employer to make payments for your home loan on your behalf (fringe benefit?), which will then lower your taxable income. Maybe someone can elaborate on this? I also recall other members in this forums mention that you can salary sacrifice some income into superannuation, and that your don't get taxed as much (15% compared to 30%?), although you won't be able to touch the money until you retire, and there is always the possibility of the Government changing the rules between now and 25-30years from now.
http://www.bmgbullion.com/document/790
Macro Trends in the US:
- Ageing Population (Baby Boomers Retiring)
- Outsourcing
- Peak Oil
Consequences of these Trends:
- lower GDP
- systemic unemployment
- lower tax revenues
- increased money supply
- more government debt
- rising inflation
- declining currency value
- higher gold prices
The last time round it was a flight towards 'Liquidity'
This time round it will be a flight towards 'Safety'
Apologies for the inconvenience emptyvessel.
A lot of the information was new to me, and being a new investor I am quite emotional I just had the urge of sharing the video and warning others as soon as I saw it. I know a lot of friends and family have rushed to buy properties under the belief that property prices always go up, without taking into account affordability issues and financing issues, and some may have over paid for some of these properties.
Obviously sophisticated investors like yourself already know all of this, and invest based on numbers rather than speculation. You have made it clear that you do not appreciate negative nonsense, so I will refrain from sharing these type of videos in the future.
Just out of curiosity, where are you investing your money right now? And what are your thoughts about investing in US properties, and investing in Gold and Silver?
I agree that Today Tonight can be biased at times, but thought I'd share the link anyway as it relates to this topic and a lot of the discussions that have taken place in this thread
- Issue of affordability and how some buyers have been speculating only to end up with negative equity
- Impact Carbon tax and any interest hikes could have on the Australian Property Market
- Suburbs that are likely to see significant growth E.g. Gladstone, Orange, Ballarat
I'd encourage you to view the link, rather than completely dismiss it
Property Plunge – (Today Tonight)
lol – I was wondering what was up with the multiple posts
Just watched quite an interesting video that I thought you guys might want to take a look at as well:
http://dailycapitalist.com/2011/07/16/weekend-fun-part-4-overdose-the-next-financial-crisis
As with all investments, it is recommended that you conduct your own research (rather than blindly following the advice of others), in order to be able to make an informed decision based on your own personal circumstances
Some resources I would recommend to gain a fundamental understanding of investing in Gold and Silver are:
- Guide to Investing in Gold and Silver – Michael Maloney
- The Collapse of the Dollar, and How you can Profit from it – James Turk & John Rubino
- http://goldsilver.com/video/why-gold-and-silver-full-movie-mike-maloney-tells-all/
- http://www.youtube.com/watch?v=-IiarVvZguY
Hope that helps!
The next major upleg for precious metals is likely to commence within the next 2 months, and this time it could be quite explosive and take many by surprise. I'd encourage all prudent investors to do some research and to consider investing in precious metals such as Silver while they are still undervalued.
Spandex,
Members in this forum have been more than willing to give you advice about your idea of negative gearing, but it appears that you have made up your mind about this issue.
If your goal is to reduce your taxes then 'negative gearing' will achieve this goal, but whether or not this will translate to worthwhile capital growth over time will depend on the property you purchase, its location and the price you pay, as well as what happens with 'financing'.
What you have to becareful though is that there are many sharks out there happy to sell you their products with the promise of high returns, but have a disclaimer along the lines of:
"This brokerage company makes no warranty of representation about the content of this brochure. It is your responsibility to independently confirm its accuracy and competencies. Any projections, opinions, assumptions, or estimates used are for example only, and do not represent the current or future performance of the property"
In addition to making sure you do your due diligence and verifying all claims, it is also important to note that we are in a flat market at the moment, and negative gearing only gives you a fraction of the money you lose i.e. if after all income and expenses from the property you are losing $22,800, then you will only get back $8,436 based on your income bracket. If the property appreciates much greater than the amount lost, then GREAT! But what if it doesn't? What if it stays the same? Would you be happy holding onto a property that is taking $14,362 out of your pocket each year for the next 3-6 years?
Your short term and long term goals is something you need to think for yourself, and you can then try to formulate a strategy to achieve those goals, possibly with the help of a financial planner that has your vested interest at heart. As many members in this forums mentioned, properties are only a medium to create wealth, and tax benefits associated with them should not be the primary reason for your investment decisions.
Personally I'm not too fond of the idea of negative gearing, and losing money, but I suppose it could work if you do your due diligence before buying the property and the growth of the property offsets the losses you incur for holding onto the property. Ultimately it depends on your goals and what time frame you are looking at.
