Or ring Jamie- he seems to have helped you quite a bit so far.Cheers,Luke

If you borrow 100k to buy the block of land for 100k (100% finance, assuming you have other equity), then you would pay approximately $35k interest on the loan @ 7% interest only. This is quite conservative as rates will likely be higher than 7% in the coming years.So if you sell for $110k in 5 years (that is the $10k growth you have said you…[Read more]

Anthony/Terry-Can you set up two trusts- one business trust and one porpoerty trust, and then distribute the profit from the business trust into the propety trust too offset any losses incurred in the first few years of operating the property trust?? Will this have any asset protection implications i.e. can any creditors of the company recover…[Read more]

For a bank to lend money to a trust, they require a personal guarentee from someone that they will repay the loan in the event of a default. Therefore, if the trust defaults on a loan, they will not pursue the trustee but rather the person who has guarenteed the loan. This is why they seek a perosnal guarentee on loans to trusts so they can recoup…[Read more]

You need to check the council rules about subdivision. Even if it is a large block, you might not be able to subdivide depending on their minumum block size requirements. And if all of the houses are on large blocks, would there be much demand for a small subdivided block of land??Luke.

You definitely need to check with council as to what their planning guidelines are. A big block may or may not be worth a lot depending on where it is. 1000m2 of land on a city fringe suburb may not be developable, however an identical sized block of land in an inner suburb might be able to be split into 4-5 unit sites.Where is the block of land…[Read more]

Sorry- good point by xdrew I meant!!!!

xdrew wrote:
Catalyst .. But if the banks wont let you borrow on it .. they probably also wont lend against it. It falls short in all sorts of ways from being an ideal investment base. That remains my problem with them.

Very good point by Catalyst. If you can not use the property to leverage into more property, then it would very likely be a…[Read more]

You are able to rent back a property from a trust that you are a beneficary to. However, the rent must be market rent (not a discounted rent) as you must show the ATO that it is a legitamite lease and not just a tax evasion scheme. Furthermore, you can rent out the property as 'Fully Furnished', which means you will be able to claim everything…[Read more]

fWord wrote:
Sure, prices could fall but that doesn't fuss me. And I'm not anticipating price falls of 30, 40 or 50% either. I'll rather take my chances at a better financial future (at the risk of losing everything) rather than wait around, do nothing, and be screwed anyway, wallowing in self-pity and poverty in my golden years as inflation…[Read more]

fWord wrote:

MRW wrote:
may as well keep this discussion going.http://seekingalpha.com/article/246486-australia-the-last-epic-bubble-formulating-a-coherent-investment-strategyI have no idea who this guy is, whether what he says is valid or not. Interesting read though.Who knows!– Mark

Interesting read, and judging by the comments, there's a…[Read more]

Derek wrote:
Too many small and very old units in Glendalough for my liking.

But if you can pick up a reasonable sized unit in a building that is in good condition, then I think you will be a good chance for above average growth.Luke

I think you will find that using a trust does not increase borrowing capacity. This has been discussed at length on these forums- Terryw and Richard Taylor might be able to comment more on this.As for trusts, anyone can create a trust and there are steps you need to go through. A good tax advisor or acocuntantand a solicitor will be able to help…[Read more]

I would suggest that you would be better off with the larger block. You can always add an extra room or two later down the track if you wish using some of the equity to fund a construction loan. I woud think growth would be better with the larger block, and the ability to subdivide/develop/add a granny flat is worth a lot to a property investor.Cheers,Luke

Good cashflow and cheap houses, but are there good opportunities for capital growth and is the risk low or high? With property there are three things: Risk, Growth and Cashflow. You rarely get all three on the same deal.cheers,Luke.

If your tax accountant has not heard of this before, then you may be better getting a better tax accountant who is an expert in property. Also make sure you are using the margin scheme for the GST calculation.Cheers,Luke

You may be better off purchasing properties in a trust with a corporate trustee. This allows for better asset protection and you can easily distribute profits to different individuals or companies to reduce your tax bill (if you set up a discretionary trust that is).Luke.

You would probably be able to add some value to a house and land package- but not enough to purchase a new house for the sole reason of adding value as it is very unlikely that you will ever ba able to add enough value to cover opening costs, closing costs, holding costs while leaving enough profit to make it worthwhile.Luke.

Sounds excessive to me, I would get one done every 2 years or so for a block of units.Luke.

I dont think there is any opportunity at all to ad value to a new house and land package.Luke.