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  • Profile photo of kooringalkooringal
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    Hi Mikki, We rented a little cottage near the beach at Moffat Beach in Qld ‘fully furnished’ – we bought it that way – the old owners ‘walked out’ and left it ‘as is’ and that’s the way we ‘holiday rented’ it initially, then rented it ‘permanently’ ‘as is’ too.

    We haven’t had any problems so far…but our first 6 month rental is just about to come to an end, and we haven’t done an inspection yet, so we don’t know how good/bad it is, but we suspect it’s probably ok (is this wishful thinking?) will let you know if it turns into a nightmare, but we think it’s a fine situation. good luck with yours, kooringal.

    Profile photo of kooringalkooringal
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    chandara, as far as I know, if you only have ONE ‘PPOR’, you can rent it out for up to 6 years, and if you sell, it is CGT free.

    check with the tax office about how you maintain the rented property as your ‘ppor’ – do you still have to be enrolled for voting there? divert your mail from there? dunno. maybe someone else in here will know?

    if you NEVER intend to move back into your ppor, maybe you get a valuation as soon as possible, to lock in any capital gain that occurred BEFORE it was rented for the first time?

    that way if you rent it for the next 10 years, you’ll pay CGT on a proportional basis, but the ‘base year’ will be the valuation from when it ceased to be your ppor and when you started renting it.

    the tax office are great, if you get a helpful person, for ‘checking’ on these options.

    good luck, kooringal

    quote:


    Elysium-M,
    I’m respected your view point, but isn’t it this world is all about? Anyway, good luck with your investing.

    Question:

    Quoted from kooringal:


    Hi Comdom, this is our ‘old’ ppor, we have a new one, the six year rule won’t apply to us – we can rent out our ppor for up to 6 years and still sell capital gains tax free – AS LONG AS WE ARE NOT MAINTAINING ANOTHER PPOR – and in our case, we are.


    in my situation, I rented it out my PPOR in July’03 and currently renting. As I am not maintaining another PPOR, does it mean I will get the assumption from capital gains tax?

    Any help will be appreciated in advance

    Regards

    Chandara


    Profile photo of kooringalkooringal
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    [Terry W and Chandara, thanks for the advice. K.

    quote]
    Kooringal,

    Just one month ago we have moved from our PPOR and rented a couple suburb away. Therefore, we turn our PPOR into an IP. The tax dept also asked us to get a professional valuation to value the property for base value due to cap gained in the past. I am very happy with the price that I got from the professional valuer.

    Here is how I did it and get high valuation price:

    1. Must use local valuer as they know the area much better than other
    2. Do a research in the area for the property similar to your with max sold value
    3. Contact valuer and explain to him your situation tell the valuer what you think it worth. If the valuer agreed then go ahead with that valuer. if not try another valuer until you are happy with the valuation price and finally ask him to come and inspect your PPOR.
    4. Prepare your PPOR as it is for sale, look clean and neat.

    5. Be their when the valuer come to inspect the property. Point out the good point about your PPOR. Also tell him the house next door if any sold at this particular price.

    6. Before he leave make sure ask the valuer what he think it is worth? and convince him to the value you want.

    I think you should spend another $300 for a new valuation price.

    Hope this will help.

    Regards

    Chandara

    [/quote]

    Profile photo of kooringalkooringal
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    [
    Hi Comdom, this is our ‘old’ ppor, we have a new one, the six year rule won’t apply to us – we can rent out our ppor for up to 6 years and still sell capital gains tax free – AS LONG AS WE ARE NOT MAINTAINING ANOTHER PPOR – and in our case, we are.

    SO, the cheapest and easiest way to ‘lock in’ the capital gain that occurred while it was our PPOR is to get a valuation, and use that as our future cost base if and when we want to sell the old ppor, which will then be an ip.

    Make sense?

    Doesn’t have anything to do with any ‘shonky’ on a tax return, it’s just about being liable for less capital gains tax in the future.

    quote]
    Hi,

    Hello everyone i am new to the forum and have been reading with interest and i have a question regarding the valuation, why must you lock in the valuation when you rent your PPOR if your intending to sell or not sell as i understand it you dont have to pay CGT if you sell the property whithin 6 years. Or am i tottally of the track and this has to do with Tax return.[?]
    [/quote]

    Profile photo of kooringalkooringal
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    Thanks David U. I did give him the prices of a few houses near us, but not in writing with all the details, as you’ve suggested.

    I forgot to mention the vacant block across the road – just forgot – HELLO!!! I hear you say!

    I will do as you suggested and I guess I must just pay full price for a second opinion.

    (It takes me TWO DAYS to earn $300. It makes me ‘cross’ to pay $300 for a few hours work that I believe has NOT been well done.)

    In the long run, in our case, as you point out, it is still ‘worth’ it financially, I guess it’s the principle that his research was NOT worth $300, and I accept, but don’t AGREE that I should provide the ‘research’ for the next valuer and STILL pay him/her full price because he/she has the ‘ticket’ or rubber stamp I need to get something I am entitled to, it’s not like I’m trying to pull a ‘swifty’, I think what I want is a ‘fair’ thing but hey, who the hell knows, and maybe ‘fair’ is too big an ask, I just have to do what it takes to make sure I get what I want…

    thanks again for taking the time to reply and giving such sensible advice – nah, it’s not ‘fair’ but if at the end of the day, I end up getting what I think is ‘fair’, then maybe it’s just ‘the price’ that has to be paid…

    thanks, Kooringal

    quote:


    Hi Kooringal

    In this current market, valuers are extremely busy and in carrying out a valuation will just look at recent sales which in most cases are in excess of 6 months old. This is a problem in a fast moving market.

    To ensure you get the valuation needed, YOU have to do the homework for them; ie provide them with 5-6 recent comparable sales. Provide the address, type of property, sale price, real estate agent details and date of sale; ie provide COMPELLING evidence.

    All this should be handed to the valuer BEFORE the valuation, they will be grateful for this and in my experience this almost always ensures that you will get the valuation you need.

    There’s little point complaining after the valuation… the horse has bolted, although in some cases they can be persuaded to change their mind.

    I think it would be worthwhile doing the above and then paying for another valuation. If it costs $300 to pull out the extra $80k that you think the property is worth, that would be money worth spent?!

    All the best

    David U


    Profile photo of kooringalkooringal
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    HI BC, I’d be delighted with this valuation! It would be in my favour by a mile. I don’t think my partner would accept it though and I’m afraid I wouldn’t blame him!

    I know if we sold the property, we would get $500,000 today and probably $600,000 if we wanted to hold out – but we wouldn’t sell it for that anyway, it will continue to appreciate because it is in a lovely position and it’s a good ‘retirement’ proposition.

    Are you saying I should just accept the valuation for the lesser amount and be ‘happy’ that at least ‘most’ of the capital gain that occurred while we were living there has been ‘recognised’?

    quote]
    Just suppose you were going thru a messy divorce and you wanted to buy your partner out, would you be happy with this valuation? well honestly would you?

    BC
    [/quote]

    Profile photo of kooringalkooringal
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    Hi Tas INvestor, good luck with the property. I don’t know the ‘custom’ in Tas, but in north side brisbane, it’s quite ‘normal’ NOT to have to pay for ANY advertising up front. The agent takes it out of their standard REIQ commission. (I personally have never ‘negotiated’ less commission than this but I definitely would refuse to pay any advertising – I am promoting their agency as well as my house, not this little black duck!)

    I would also ‘have a go’ myself next time I want to sell.

    Don’t ‘trust’ your agent too much. Stick to your price – you know, the ‘higher’ one he/she said he/she could ‘negotiate’ for you – make the agent get you that price, ie cover their commission.

    They all say they can’t but we have found, even when we really thought we had ‘pushed it’ tooooo far, the buyers suddenly ‘found’ the extra money we insisted on, even after the agent was really pressuring us that this was their absolute LAST offer etc etc, incredible, so I’m afraid I don’t think the agents I have seen in action are ‘good negotiators’ at all WITHOUT a lot of steely grit from the vendor they supposedly represent – at the end of the day, they are out for a quick sale, at a good price to you, but not necessarily the ‘best’ price, ie those last few thousand, I believe, are irrelevant to the selling agent, but ‘those last few thousand’ to YOU, the vendor, is the money that covers that agent’s commission, so TOUGH IT OUT a little, you might lose one sale, but depending on how desperately you need the money, there will be another buyer…

    and DON’T confide in ‘your’ agent, don’t say you are desperate, if you have already done this, get a steel rod in your back NOW and say you have been thinking about it, and you will NOT let the property go for less than..xyz…this is only my idea, good luck with whatever you decide to do, Kooringal.

    ps the agent, I believe, if he/she IS good, will get you those extra thousands – if he/she does, he/she will get paid, if not, keep your cool, a buyer will show up, try the high price first and sit tight.

    Tas [:D]

    [/quote]

    Profile photo of kooringalkooringal
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    HI, I read something about how it was then in the paper, I think on the weekend, sat’s courier mail (brisbane)..but…you could ring the tax office and ask, or your local MP and see if they have any research on how it was then…

    you could also try a library?

    but from what I remember reading, what you say is correct, you could still offset expenses/interest, but only to ‘break even’ point, ie not claim any ‘losses’ above what the property was earning.

    sorry can’t help more. hopefully someone else will help?

    ps i know i’ll be cranky IF/WHEN neg gearing provisions are changed – we bought a seriously neg geared property because we hope it will be a future ‘lifestyle’ option, and it will have serious capital gains, and certainly ‘one factor’ in deciding whose name to put it in was the neg gearing one – if that is no longer a factor, it would be annoying. we’d still keep the property, but one ‘advantage’ to buying it would no longer exist, and we may have put the property into my name if neg gearing hadn’t existed…never mind, we all know the laws can change, taking it away ‘didn’t work’ last time, so hopefully they won’t do it again for a while…

    good luck in your search for how it was and how it might be again..

    kooringal.

    quote:


    Does anyone understand the question or are all those old enough to remember not surfing at the moment. I hope I was able to articulate my question properly . I’ve had 30 readers and no answers![:O]


    Profile photo of kooringalkooringal
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    [
    Hi Scott, you sound like you have it sorted and I am really happy for you. We have another friend who buys with his parents and it works for them (but they are not ‘cheap’ and he isn’t either…)

    And you’re right, I should have INSISTED in talking about things with dad FIRST – he just thought I would do what HE wanted, which is the way it had always been, but when I bucked, he went OFF…it got personal and I was miserable.

    I just had this blithe confidence that we would be able to work things out in the end – we didn’t really.

    I’m pleased it’s working for you.

    If I had $250,000 to spend, even if I had to service it myself, I would still buy BY MYSELF, not with my dad, NEVER again, unless, as you say, your goals are the same, your style is the same.

    NOW I would be able to go in with a ‘dad type’ person on something and I don’t think I would be a mess.

    THEN I was very naive, full of enthusiasm for my first purchase, and I was very sad it became a miserable experience for me, personally and financially in a way too.

    I just thought I’d tell my point of view, because it depends what sort of person you are and at what stage you are at, I think, and our mate here might be at my stage, or at your stage, she can decide that.

    Cheers, Kooringal.

    I’m buying IPs with my parents at the moment and we’re all confident that none of us will have dramas! Sure we clearly stated our aims and goals at the start, but this forced us to develope a plan early on. If the pair of you are close there should be no probs, just make sure you know where each of you stand before you start.

    Kooringal, no offence meant by this, but surely you should have known that you and your father may have issues before you entered into a joint venture, I knew exactly where dad and I would differ and we sorted it before we started. Sure we still have some quibbles but we’ve pretty well got it covered. Both of us know what goes and doesn’t go, as we established it early on, and we’re both grown up enough to sort it out quickly if we do disagree.

    What it comes down to is talking it over with your father, and clearly defining what goes and doesn’t go, eg; he wants to reno and you don’t have the funds, you have to work out between you how any CGs and extra income are divided between you. None of us can just tell you what to do, both of you have to be happy and in agreement with the way you divide any income and costs. Who knows your dad might be happy to pay for the renos and just split profits in two. I’m paying all purchase and setup costs on our IPs at the moment, and I’m more than happy with that, because I feel that it’s the least that I can do for mum and dad, and it’s going to benifit me in the end.

    Just be clear on where you stand and go for it!!![;)] I’ve got no regrets.[:D]

    Cheers
    Scott S

    “Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
    -anon
    [/quote]

    Profile photo of kooringalkooringal
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    HATE to be negative, mate, but DON’T DO IT!

    Find a house you can buy YOURSELF! I KNOW it is really really scary, and what if you lost your job and what if…etc etc…BUT, there is NO way not to end up in arguments, him with ‘control’ over you, and unless you are a super docile daughter, DON’T DO It!

    Take it from one who was BURNT!

    Go out on a limb a bit, buy something good, and work hard to pay it off , do it for YOU.

    Your dad will still help you ‘do it up’ and you can ‘pay’ him for his time, either by swapping skills, ie washing his car, ironing, doing his garden, whatever, he will be PROUD to be helping you on your way, but DON’T ‘go in with him’ just because you doubt yourself, or you want a bit of security in case something happens to you – NOTHING will ‘happen’ and if it does, you can always sell…

    IF you DO decide to buy with dad afterall, WRITE down all your plans…ie

    You choose the property. Write down for your dad what you would like to DO to the property (ie my dad was HORRIFIED to find out I wanted to paint the interior all white and rip up the smelly old brown carpet and polish the floorboards and put in security grills…it was one argument after another…dad is cheap, I like nice fittings, dad grizzled over every payment, I’m not ‘mean’ about that sort of stuff, it was horrible, an OK relationship will NEVER be the same again, thank god we’ve sold now, I couldn’t do it anymore, I was miserable, and we sold a great property below market just to get out, I had had enough, I would never wish such a situation on any dad and daughter.

    So, tell your dad how YOU see your prospective purchase, don’t hold back, if you want a picket fence, etc etc, write it down and give him a copy and ask him what HE thinks – he might see things very differently…when you say ‘he can do it up’, what HE has in mind and what YOU have in mind may be very different…

    What he considers ‘adding value’ you may not…beware!

    I think you should have an ‘investment plan’, just as if you were buying shares.

    Write down EVERYTHING. This can be revised, but don’t be conned into NOT writing everything down ‘because you are family, and you can ALWAYS work things out as you go along – WRONG!’.

    Work out a ‘sunset clause’, ie how long you would like to hold the property. Ie say 5 years, and then if either wants to sell, the other gets the option to buy them out at market value (valuation, the prospective purchaser to pay for the valuation, if the seller not happy, they should get their own valuation, at their own cost, and you split the difference and that shall be the purchase price – write it down!)

    That way if you want to get married, dad can’t hold on to this property forever and tie up your finances so you can’t buy elsewhere with hubby, or go overseas or whatever. If he doesn’t want to do what YOU want to do, you will always know that at least after 5 years, if YOU want out, he is obliged to buy from you, or you put it on to the market and both take your profits.

    Write down the cost of everything you do to the place and who pays for it.

    It doesn’t matter much about reimbursing your dad for repairs. he will claim his costs off his tax. see ‘repairs’ or ‘capital improvements’ specifications at tax office website or other literature.

    If it’s repairs, you pay him 50-50, or whatever you two decide, and you claim your share off your tax, he claims his off his tax.

    If your dad does/pays for capital improvements, he keeps track of them and you do a settlement when you sell or whenever you decide.

    Ie you buy the place, 75-25, you and your dad.

    He pays for a new kitchen. ie new fittings $5000, workmanship at $20/hr $1000.

    WHEN YOU SELL, instead of getting 75-25 at settlement, your dad will get his 25 per cent of the selling price, plus you will give him $3000 from your share, as half the cost of the capital repairs he made a few years earlier.

    Or you can work out your own system – but WRITE IT DOWN, and hopefully you will avoid many tears.

    I wanted to put in a sunset clause as above, my dad and our solicitor said nah, not necessary.

    Well, dad was a PAIN to deal with. Really ‘cheap’. I hated it. He was cheap with the tenants, cheap with me, I just wanted to get out. He said I could buy him out, but he wanted a fair bit more than ‘market’, so in the end, I decided to sell out of the house I loved rather than have him hold it over him for the rest of our lives that I ‘ripped him off’, too long and sad a story, but please, think twice before ‘going in with dad’, especially if you love him.

    My step dad helped me paint the house, do the plumbing etc, I paid him, less than market, but I really appreciate his work.

    Your dad will help you without you having to let him ‘come in’ on your house, and DON’T feel guilty to give it a go on your own.

    Have confidence! I wish I had believed in myself a few years ago as much as I do now.

    Good luck,

    Kooringal.

    quote:


    [8)]Hi! My father and I are about to buy a house together. I have $250,000 and he’s got $80,000 as a deposit. We are going to take out an interst only loan of $190,000 and pay back the mortgage 50/50. That will mean that I have a 66% share in the house and he will have a 34% share in the house. This will make paying rates and shared bills easier to divide up. The only thing is, my father earns a lot more than I do and he would be in a greater position to say do up the kitchen, bathroom etc on a place we buy. I would not have the financial freedom to do that. If he goes ahead and does renovations on the house, how does that affect his equity in the house? Is there and easy answer to this question?


    Profile photo of kooringalkooringal
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    HI Banner, we wanted to sell a house in Carina in Brisbane, the agents said we couldn’t expect $150,000 for it…it was a solid 3 brm home, but very daggy…we wanted $180,000…we decided to ‘do it up a bit’ and go for the $180,000, our gut feel as to what it was worth…we spent $13,000 and lots of hours (around our current jobs)…over 8 weeks…so no rent coming in in that time…we cleaned it and did an internal paint (prof $2500), put in a new kitchen and tiled the splashback ourselves ($2500 from Mad Barry’s), put new tiles in the bathroom and on the floor (Parella tiles, end of line tiles), and the loo (all timber before and bad condition), we hung plain fresh calico curtains throughout, we took up the old worn cork and got the floors polished ($2000), did up the garden at the front and tidied the garden at the back ($800), and presented the property as fresh and clean, windows very clean etc, and we got $210,000 – the market was rising at the time though, so it’s hard to know if ALL the profit was due to our improvements, but I CERTAINLY think we would have doubled our money on the improvements, ie even if we would have got what WE think the property was worth BEFORE (ie $180,000), we spent $13,000, but we got $30,000 more than what we thought it was worth, so it was hard work, but we think the extra money was worth it.

    I don’t think you’d get RICH doing this…but it might be worth a go if you don’t have a better offer on the table…good luck, let us all know how you go if you decide to give it a try.

    kooringal

    ps IF we were to sell the home we are currently in, we would do the same again, ie new kitchen, tile the bathroom and loo, we’ve already freshened the internal paint and we’d improve the front garden again, ie street appeal.

    quote]
    Congratulations again on a great site.
    I’m looking for some feedback on renovations. I’d like to buy an investment property around $155-180,000, probably within 3 travelling hrs of where I live and put in about $10,000 into renovating it. I’ve heard that all this does is make the property sell faster rather than increase it by more than the money spent. Has anyone had success in this as I’m looking at doing this sort of thing as my job (due to high unemployment in my region) and trying to at least make a wage out of the profit.
    [/quote]

    Profile photo of kooringalkooringal
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    Cronulla.

    Kooringal

    (PS don’t know the Cronulla market at all, but I know Cairns a little, high turnover of population, property managing agents generally slack, mildew a problem, shonky workmanship on houses a problem, a long long long way away from cronulla…but a good excuse to visit Cairns?

    if it was me, if i could afford it, i would go cronulla…or somewhere else…but i’m sure there are others on the forum with far greater insights who will soon post, patience.

    quote:


    CRONULLA OR CAIRNS?

    That is the question I pose to you!

    Looking at investing in IP around 350K – medium term investment and looking to sell in 5-10 years.

    Cairns is great returns but lets face it, it will be 10 years before we see (significant) increases by value. Cronulla, on the other hand, while it has higher rental income, the value of properties has increased significantly. I live at cronulla and I know the market, it will just continue to increase but Cairns does sound very enticing.

    For investment purposes, which road should I take.


    Profile photo of kooringalkooringal
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    hi Maximus, I’m no expert, but I’d hang on to it too. Sounds a nice little spot and a nice little earner, nice place to visit when you’re old and it’s all paid off, hang on to it! Kooringal

    quote:


    Hi again all. Just wanted to get an opinion (again) on one of our I/P’s. It’s a first floor one b/r unit in a high rise at Broadbeach (I know I know, don’t buy high rise) that we bought brand new approx 4 yrs ago. It was our first venture into the world of I/P’s and I didn’t know then what I know now. It has always been rented out, (returns $250 p/w, may be able to get $270) but the problem is that it is only just starting to reach the price that we paid for it (paid $220000 incl furniture). It is neg geared and still has good depreciation left and doesn’t affect our budget too much as it really reduces my wifes tax, and we have a mixture of I/P’s that are neg, neutral & positive. As mentioned, it is starting to “come into it’s own” and with the Convention Centre happening soon, I’m hoping things should be bright at Broadbeach for the future. Just wanted to see if the majority would sell it or hang to it.
    Thanx again
    Marty


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    HI Rocky 2002 where did you buy? I have the same dream (my husband doesn’t, but he’s being talked around, I hope…), and we recently bought in caloundra. from what i saw of units, and prices, ALL is seriously negatively geared.

    I think what you have done is fine, not from an investment point of view, but from a lifestyle point of view.

    the holiday rent thing gets chewed up by the expenses, so it’s an ‘expensive’ lifestyle choice, but hey, if you can afford it, and what you are doing is a LUXURY type of thing, why not?

    have you got other things in place to feed you an income in retirement? apart from the pension?

    we bought a wee little cottage in caloundra, great spot, shocking price, but I wanted to do it ‘now’ because I thought we will NEVER be able to afford such a spot in the future.

    It is tying up a LOT of our after tax income in servicing this huge debt, but, for me, it’s worth it, for a hard headed business person, it is NOT worth it, my husband says it was the WRONG time for us, and he is right, but my gut tells me it was the RIGHT decision, and my husband and I are BOTH hoping I turn out to be ‘right’, not him…

    anyway, good luck, I don’t think either you or I have done the ‘right’ things as far as a good-return-on-investment goes, but hopefully, with cap gains, these decisions won’t turn out to be SO SO wrong in the longer term.

    kooringal

    quote:


    We have dreamt of retirement to the Sunshine Coast for several years but due to family commitments have not been able to make the move. At the same time we have watched property prices soar until we felt that maybe our dream was just that…. and would never materialise.
    Anyway during our latest visit to the coast, we purchased a unit in a fantastic location directly opposite a patrolled beach in a resort complex. However it is only one bedroom – we intend to rent it out probably in the holiday pool because it appears to be the most lucrative and also enjoy more time on the coast ourselves. We are wondering what others might think of this type of investment. We are very new at this. Body corporate is low (2500) and returns appear to be good. We are hoping eventually (with the sale of our family home) it will help us to purchase a property close to the coast. Your thoughts will be welcomed.


    Profile photo of kooringalkooringal
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    caz, hang on to it, luv. enjoy your baby and hang on to that property. it is security for the future. a passive income in the future. a roof over your head in the future should ever you need one. make the repayments by hell or high water. don’t jeopardise YOUR financial future by being altruistic, ie thinking of your partner and your situation as a couple. Once the property is gone, there will be not much money left in your bank account, and it will dribble away…don’t do it…keep paying off that property bit by bit, and don’t feel guilty for being so bloody minded…when push comes to shove, and i hope it never does, you have to look out for you and your baby’s security, do it girl, hang on to that property,

    from one who sold, and wouldn’t do it again if time could be turned back. xxx good luck

    quote:


    Hi and thanks for the replies so far.

    It seems the consensus is to hold the property :)

    I realised on the weekend that if I put myself in the position of looking to buy a second IP would the existing property fit my criteria and decided that yes it did and I also thought that if another investor wants to offer me 95k (the offer was made theough an agent I had called just to see about how things were going in that area as I live some distance from it now and the properties in that area are generally only advertised in the community papers) then somebody else also thinks it is worth having and probably hopes to pick up a bargain.

    I have no idea about wraps but the tenant is a single mum with only centrelink income.

    The main reason I thought of selling was to clear the combined debts for myself and my defacto and increase our borrowing power for buying a home for us to live in. We currently rent. I am now thinking that we should perhaps look to buy another IP. So much to learn though!


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    Hi PG WA, as usual, this site blows me away with the wisdom and generosity of spirit of the contributors. They are giving really good advice I think.

    I think you have to give 2 months notice anyway for the rent increase to take effect…we do here in QLd I’ve just found out…?

    I think the best advice is to go and see her, have a chat, tell her you want to do reno at end of year, ask HER what would make her stay at the unit, what it needs, it will help YOU plan your reno, have a chat, see what she would need to stay, or she might not be that fabulous, but it’s good to leave on good terms, for both of you, and maybe your time together is up, and you need another tenant who can afford to pay $30/wk more…

    we have just given one of our tenants notice of a $10/wk rent rise (no increase for 3 years!) because they are ‘stable’ and pay on time, but the house is a brothel, ie a total filthy mess, they are SHOCKING tenants in terms of caring for the property, but nice people, not ‘wreckers’, just really dirty and messy, but…they always pay the rent on time and we’ve been too busy to address it…now we think the time has come…they’ve said they will leave if we increase the rent…and we’ve decided ….that’s the way it might just have to be. The house is rented probably $20/wk below market, and we’ve only raised the rent $10/wk, but if they go, well, it’s sad, we lose a ‘regular’ payment, but hopefully we can CLEAN the property, it SO needs it, and polish it up, and get someone who is happy to pay ‘market’ and hopefully who keeps it in a better state of cleanliness…we don’t ‘need’ the $10/wk extra rent as such, I just think …it’s time…they have stable jobs so it’s not like we’re ‘kicking’ the poor and I can live with their ‘outrage’ if we raise the rent after they’ve had it pretty good for a while – unfortunately, I doubt they will leave, they are paying less for better facilities than they will find in the same area, but if they do…

    good luck with your dilemma.

    kooringal

    quote:


    I inherited a tenant with a recent property purchase. She is a single mum with a couple of kids. Lease until Christmas but her contract states she is due for a rent review.

    She has already told me she will be leaving at the end of the tenency to look for a cheaper house due to budget restraints.

    She currently pays $230/week

    The area and similar houses attrack $240 – $260/week.

    I plan to do some renovations at the end of the year and so will have to ask to leave anyway.

    What would you do?

    a) Increase rent now after all it should be a business decision. She might be telling a tale to keep the rent low.

    b) Up the rent nomatter. Put emotion aside.


    Profile photo of kooringalkooringal
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    Post Count: 31

    Katsu, as Margaret Lomas would say, don’t just think of today, think of tomorrow. If the investment property will be paid off or positively geared within a short time, maybe it should go in your name, so you will effectively be ‘income splitting’, ie not all income will be earned in name of high income earner. We should have done this with one of our properties, but we went in blindly and put it into my hubby’s name, since I was having babies, but now it is pos geared and I would be better off ‘earning’ the income than him, paying 47 cents in the dollar…

    SO, if the prop will be neg geared for ages to come, maybe in her name, but think…

    Banks are fine about prop being in one name and both names on the loan – how do YOU feel about that, you’re responsible for half the debt, but you don’t get half the house? Your partner can sell the house without referring to you whenever she wants? Do you trust her? If you plan to work again soon, and you’re not so certain your partnership is for life, I’d be getting my name on that contract too, and buggar the neg gearing bit…THINK. What does your gut tell you?

    Re stamp duty. I THINK, if you rent the house as an IP for a while, but then you both move in there, and it is your PPOR, ie you get your mail there, you put it on the electoral role as your address, etc, you can get your name put on to the house title free of stamp duty. Basically, ring Office of State Revenue if you want to check the rulings exactly, but effectively your partner ‘gifts’ half the house to you, for nil dollars, so no stamp duty owing, BUT ONLY IF IT IS YOUR PPOR, not an IP.

    Good luck.

    Kooringal

    quote:


    Hi Wise ones,

    I’m about to purchase a house for my frist IP,(neg gear) but not sure what is best for tax and the bank.

    Suitation is , my partner is in the higher income than me and I’m about to losse my job due to retrenchment so I’m not sure how long that I will be out of a job. ( Banks does’nt know ).I pefer to have my partner name on the title because she is in a higher tax bracket.

    Questions

    1. How can I get one name on the title and would the bank be happy ?

    2. Is there a way you can change ownership without paying stamp duty?.

    3. What are my options.


    Profile photo of kooringalkooringal
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    Post Count: 31

    brendan, do whatever it takes, but my tip is NOT to sell the unit, do whatever it takes to hang on to it. I don’t know where you could buy anywhere else so nice so cheaply, and it will be passive income in years to come and the area will appreciate. Put that unit in your back pocket and don’t touch it.

    Re mum, see how it all goes. Can you put up with it for a while? She might get well enough to go into the unit?

    DON’T Sell that unit!

    I think it’s wonderful you are going to help out your mum. Family is everything. It will be darn hard, but at the end of the day, you will be glad you did it.

    love Kooringal.

    quote:


    “Sell my mother” I wish.

    The unit is – geared and i am out of pocket about $20 p/w

    I will definitely try to hold on to it now and i am going to check out a broker regarding the finance.

    Talking to you guys has helped me remain objective and posting here has been a great help.

    Thanks for the encouragement.


    Profile photo of kooringalkooringal
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    Post Count: 31

    Hey bruce, you sound like a bit of a cranky buggar! sometimes we THINK we know what we are doing, but it’s nice to run it by others and there are lots out there with some really good ideas/tips. we’re not all greedy. we like to provide for our future and we like other people to be providing for theirs too – then we’ll all have less tax to pay in years to come, if we all learn to look after ourselves and give a bit to the community too. Kooringal.

    quote]
    g’day,
    i’ve been around these websites for years, i even remember when S.Mc.K. use to post on another website years ago,as a another poster.
    i can even remember thinking at the time that his posts were way above the “rest”of the pack.
    I even subscribed to his first newsletter.very imformative and entertaining.nothing to do with wraps. that came later.although i wasn’t(and still not)interested in wraps.due to his wraps i haven’t visited his new website until a fortnight ago. i’m very impressed.i would say it rates as the best one that i’ve seen.
    another site seems to ask too many stupid questions.surely,if you are going to invest in property,you must use your brains by aquiring some
    knowledge of the subject.without expecting people
    to fall over themselves to assist you.
    two posters on this site who impressed me are david u.and investor.
    look forward to reading lots of everyones postings.
    bruceG.(sydney)[:)][:)]
    [/quote]

    Profile photo of kooringalkooringal
    Member
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    Post Count: 31

    [
    Hi there, I love Wellie Pt but I don’t like the sound of that house at all. Did you buy or let it go or are you still negotiating? GO LOW!

    It is true termites are ‘everywhere’ in Qld, but NOT in the structure of brick houses you pay $270,000 for and rent at a loss.

    NO NO NO

    Don’t listen to the pest inspector. He wants you to spend $2500 on termite treatment.

    WALK

    We just bought a 60 year old house and it has NO SIGNS of termites and other house in the street have had them and this house is TIMBER.

    Queenslanders are VERY scared to buy anything with even a HINT of termite about it – so if you are dead set keen on buying this house, offer $200,000 – but I don’t know if I’d take it, even for that!

    IT will NOT be an easy house to sell, I don’t reckon.

    My two cents worth.

    Good Luck, Kooringal.

    quote]
    Thanks a lot everyone.

    I just spoke to the pest inspector.

    He said that in QLD, termites are every where. If he finds live termites, he classfies the risk
    of termite attach as high (as opposed to moderate and moderate to high). Most of the houses
    (more than 50%) will be in moderate to high category.

    Houses less than 3 yrs old will be in moderate category.
    Houses between 3 and 20 yrs old will be in moderate to high category.
    He also said most old houses (> 20 years old) wii be in moderate to high category.

    He strongly recommended installing chemical barriers to the property.

    Is he abit biased or not ? I don’ know

    Any suggestion ?
    [/quote]

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