[Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024]

October 23, 2003 - 5:02 am

(-0_0-)

Couple of things to bear in mind with that strategy.

1) You are unable to purchase a property in your Super Fund from a related party – You.
2) If if it was not you but a 3rd party stamp duty would be payable.
3) Your Super Fund is not able to borrow to fund the purchase so you need to have sufficient monies in the fund to pay cash for it.
4) Super Funds normally pay tax at 15% unless the Superanuation Surchage applies. So treated slightly more favourable than a Pty Lty structure but less flexible.
5) Super Funds are not able to carry on a business so you can’t buy and sell as you would if you were trading property or renovating privately.
6)7)& Well i could go on.
Simple answer is beware as the Trustees are liable for breaching the Superanuation Act and the penalties are not light these days.

Cheers Richard
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October 23, 2003 - 4:43 am

Peter

I guess everyone who has answered your original question comes from different parts of Australia.

As a firm advocate of the Queensland market I feel we still have plenty of capital growth left in many of our regional towns. We are finding all day long client’s who purchased properties less than 3-6 months ago are having them revalued and amazed as to the percentage of capital growth.

Maybe not much when it comes to Sydney / Melbourne prices but we are proud of what we have here in Qld and it is not before time.

Why not consider buying a house as an IP using a P & I loan putting down say 10% deposit (MI is Tax deductible) and place the rest of your funds in offset account. You can add to that each fortnight as you are saving and still have immediate access to it should you need it.

Cheers Richard
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Richard Taylor | Australia's leading private lender

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October 23, 2003 - 1:41 am

Hi Uncle

I still own several properties in the SE of England after emigrating 12 years ago.

I think one of the biggest problems is the level of debt you are confortable with. Remember (if you had forgotten already) that you are borrowing in pounds and not dollars and you don’t get much for your money over there.

The other thing to bear in mind is that the Mortgage Brokering industry is a lot bigger over in the UK than it is in Oz. There are many institutions that offer 100% loans without Post Code restrictions so people you rent do it because they want to and not because they can’t get finance.

Anyway good luck and enjoy your travelling.
Its a hell of a place to live.

Cheers Richard
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Richard Taylor | Australia's leading private lender

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October 23, 2003 - 1:32 am

Guys

I guess I am slightly biased when it comes to location for +geared properties.

One simple answer is to look North to sunny Qld.

Cheers Richard
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October 23, 2003 - 1:21 am

Craig

When setting up your DIY Super Fund why not consider wrapping instead of just buying IP’s.

Combination of growth and cashflow. I have done several deals in Super as part of my overall investment strategy.

Cheers Richard
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October 22, 2003 - 12:35 am

Hi Hot Rod

1 point eveyone appears to have missed is that it is a breach of the Property Act to cross collateralise the loan on a property which is subsequently sold under an Installment Contract.

Cheers Richard
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October 14, 2003 - 11:39 pm

I agree with Steve if you are using the 11 second rule as a guide to purchasing your next investment they are certainly out there.

Cheers Richard
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October 14, 2003 - 10:35 pm

Hi Yatala

Nice to have you on the forum.

Based in Brisbane we would be happy to assist you with any finance queries. Please feel free to email me deal away from the public forum and I would be happy to run my eye over them.

Cheers Richard
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October 14, 2003 - 8:12 am

Westan

The other point is the 1 Year and 1 day rule.

Might seem petty but I assure you the ATO will not think so. Most people believe they only need hold the proprety for a year and we have seen to many sales end in tears that way.

Cheers Richard
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October 14, 2003 - 6:57 am

dennis

If you would consider Qld we have a 809 sq M block with DA for 5 x 3 bedroom townhouses in St Lucia right next to the Uni which we are selling for $150K / site.

Cheers Richard
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October 14, 2003 - 5:31 am

Mark

Concept sounds good but just make sure depending on which State you are in you have the correct license to do so.

You would hate to fall fowl of the Office of Fair Trading just for a few dollars.

Cheers Richard
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October 14, 2003 - 5:28 am

Hi Investor

Just a word of warning on the CGT.
It is calculated from Contract to Contract date rather than settlement date and is not 12 months but 12 months and 1 days to be on the safe side.

Cheers Richard
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October 13, 2003 - 8:04 am

Kristine

If you would like to email me some quick figures happy to give you a second opinion.

Cheers Richard
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October 13, 2003 - 7:35 am

Hi molkenr

As a fellow Pom (although I have been here for 12 years) would be happy to help.

Probuild Industries of which I am a Director specialise in small to medium residential / commercial development projects.

If you want to email me a list of the areas of supply that you are after I can try and give you some names of suppliers. I am presuming that you are not in sunny qld but if you are happy for you to piggy back our trade prices.

Cheers Richard
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October 13, 2003 - 4:38 am

middler

Whilst i am sure that Bill’s comments are well meanting just bear in mind 2 things:

1) In Qld it is illegal for an Agent to take more then REIQ commission by way of a bonus or incentive payment.
2) We don’t actually have an exchange of contracts in Qld.

Don’t be put off by the poor performance of your property. Bill makes a good point most of the properties on the GC I see across my desk have been sold by marketeers not bought by investors (There is a difference).

Perhaps, next time consider a freehold standing house with good positive cash flow. Hope the weather in England is not too cold just think of your unit on the sand and in the sun.

Cheers Richard
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October 13, 2003 - 4:00 am

Ian

One simple answers is to switch States.
Most of the properties we deal with are below <$100K

Cheers Richard
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October 10, 2003 - 6:19 am

Jason

There is nothing to stop your parents renting their home and treating the property as an IP. Just bear in mind when they only have a loan of $30K the amount of interest deductions will be limited.

Certainly they make obtain some building write off or depreciation depending on age but I guess they have to way all that up against the potential CGT they will pay if the ever sell it (calculated on the value when they moved out).

The other thing they have to consider is the interest costs they incur for the new construction are not tax deductible as it is a PPOR.

May want to consider selling the property using the cash to pay for the building and then use the equity to invest in +cash flow properties.

Cheers Richard
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October 10, 2003 - 5:30 am

Guys

LMI is refundable depending on the Company for upto 4 years. The lender get the refund on a sliding scale basis 60% back in Yr 1 45% Yr 2 etc down to 15% in Yr 4 and its upto you to request your refund. If you don’t it just goes in their coffers.

Cheers Richard
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October 10, 2003 - 3:12 am

Shanebal

Where are you based in the big State of ours?

Cheers Richard
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October 10, 2003 - 3:10 am

Hi Helen

I can’t beleive no one has answered your post yet so let me be the first.

Last Thursday we purchased a 3 bedroom house in Country Qld for $45,000 which is currently being rented out for $130 on a 12 month lease. All our research on the town stacked up and indeed the agent advised us that we could probably put the rent up in a year.

To be honest we will wrap in then rather than rent but 15% gross yield isn’t bad in the meantime.

Anyway happy hunting they are out there you just have to look.

Cheers Richard
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There is no such thing as a problem.
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Richard Taylor | Australia's leading private lender