[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 26, 2003 - 12:32 am

quote:

---

But Rod, surely you end up with $71,353 in your bank account after all the dust has settled,

---

I don’t believe so.

My calcs are:
sale price ($322K) – purchase price ($230K) = $92K
subtracting costs ($14880) leaves $77120.
subtract tax (77120*0.5*0.485) leaves $58418
This is the amount which will end up in your bank account.
To get your overall return you then subtract the contribution over the years ($10065) which leaves
$48353.

So you’ve actually made $25353 as the other $23K is your original funds. The return on investment is 25353/23000 which is 110%.

Don’t know if I’ve expressed this very well.

rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 25, 2003 - 9:43 pm

quote:

---

The RE agent wrote the offer up for $55K with $50K going to the seller and $5K to me at settlement as per the annexure on the back of the contract. The bank sees $55K worth of property

---

Have you full disclosed to the bank what you are doing? For valuation figures banks usually take the lower of the valuation or the purchase price. This sounds like they are being misled on the purchase price.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 25, 2003 - 12:38 pm

quote:

---

your acquisition cost has changed from $230k to $250k so assuming this is just a transcription error, your gross capital gain should be $87,120

---

I think you mean $77120, this slightly changes your later figures.

The original $23K is subtracted from the gain as it isn’t gain – it’s your original investment. This is a cash on cash return, so you’re looking for how much return your original cash contribution ($23K) has given you.

I calculate a net gain of $25353, which gives a cash on cash return of 110% or 22%pa. Still better than the figures in the book.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 25, 2003 - 7:47 am

quote:

---

forum record goes to Shane!

---

I seem to remember hearing something about quality being more important than quantity.

Haven’t seen much quality here today.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 25, 2003 - 6:04 am

After 12 months you would have got a 50% discount on the CGT.

So you would have paid tax on 0.5*(145K-90K) at your marginal rate.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 25, 2003 - 6:00 am

You’ve got the general concept correct except:

You don’t need to sell, you can refinance to another IO loan or to a P&I loan. In fact you’ll find that many of the IO loans convert to a standard 25yr P&I loan at the end of the fixed period.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 25, 2003 - 5:57 am

Your question is far too broad.

How long is a piece of string?

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 24, 2003 - 10:23 am

There’s no CGT if it’s your primary residence. Doesn’t make any difference if you’ve been there < 1 year.
As CGT is a federal tax it doesn’t make any difference which state you’re in.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 9:49 pm

You’ll get your 2nd star at 50.

Welcome to the forum.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 11:25 am

They’re a capital expense so they get added to the purchase cost for for CG purposes. But as you don’t already own the asset at the time of the expense it’s not a deduction.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 8:29 am

“skilful, inventive, complex, mysterious”

I think we’re getting a bit too smart for our own good.[]

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 8:20 am

Huey,

I admire your attitude. You’ve summed up one of the really important things about this whole “game”. That is that you have to have your own goals and aims and work towards them in your own way. There’s no point trying to make a fortune just for the sake of it. There has to be a purpose.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 5:54 am

Interesting reading, The first article is available online at http://www.brw.com.au

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 5:33 am

chan only replied to get to 100 posts.[]

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 5:30 am

Me thinks you mean http://www.ato.gov.au

Ms Elvis, your conclusion is correct, but your terminolgy isn’t. Yes the $10K of improvements will be added to the capital base cost for CGT purposes and you will only be taxed on $40K.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 5:25 am

Yes, they can. One of the main reasons against cross-collaterising is that it makes future re-financing for further purchases more difficult.

It’s best not to give banks any more security than you need to.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 1:32 am

I think you’ll find there’s some people on this forum that have done >20 IPs whilst still holding down a full time job.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 1:27 am

Hey crashy,

I just noticed you’ve got your 100.

Well done.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 1:26 am

The rates seem to be quite high in a few places in QLD, compared to VIC. One thing to consider though is that these include the water and sewerage rates as well, as these are done by the council. Unlike our seperate water companies.

Rod.

[RodCMember@rodcJoin Date: 2002Post Count: 335]

August 21, 2003 - 1:21 am

quote:

---

“can you sell our products even though they are not the ideal product for the client, and pretend you know what you are doing?”

---

Yep, those are the ones I met.

Rod.