Strategy

1. wait

or

2. find someone to go in with you.

or

3. find someone to do the deal themselves.

Yes, Ziv, that is a good point about those getting swindled in USA, speakign the same language. I guess there are those who don't read contracts even if they are in English.. And it is not just language bit different ways of doing things that is important to consider.

You can never really rely on someone else.

I remember when I was in Thailand looking at a property and I couldn’t speak much Thai then, but knew some. I took a friend’s friend with me to interpret. I was asking “can I get a loan to buy this property” and she was translating “can he live alone here”.

You also really need to read contracts in the…[Read more]

AndyProfilio wrote:
living with my girlfriends .

Hey, just like Charlie Sheen!

Wouldn't this qualify as a controlled foreign company (CFC) and be included in your Australian assessible income even if you had not received any income.

I dont' know the answer as this is too complex, but look at http://www.ato.gov.au/businesses/content.aspx?doc=/content/64063.htm&pc=001/003/129/001/004&mnu=44866&mfp=001&st=&cy=…

And make sure you can speak the language of the country you are buying in!

Down sizing is good I think. You can speed things up dramatically.

If you have a non deductible loan and then use money in an offset that is linked to the loan then the interest would increase and it would not be deductible. Possibly best to pay down the loan to a certain level and then set up a LOC to use for deposits for the new IPs. Ideally…[Read more]

Plenty of reasons to use trust structures.

A few extra ones with certain structures
1. Ability to sell to your SMSF without stamp duty – and thereby extra cash from your super
2. ability to transfer units to others without stamp duty
3. ability to sell units to another trust and extract equity with the loan being deductible
4. ability to buy…[Read more]

Yes, stamp duty and conveyancing costs. Whole new loan too. CGT may apply as well.

There could be benefits.

The trust would be able to borrow 100% to buy from you and deduct the interest. This could release cash to you to pay down your PPOR loan and also you won't have the rental income which would have otherwise paid tax on . This will now be in the trust and be offset by the interest. Do the sums and see how long it would…[Read more]

Dongbell, you would have to speak to your legal advisor about something like this.

dongbell wrote:
Hi Terry,

Yes this  is going to be an investment and would you mind what you mean by "You can structure this so as to save more tax." how should I structure the investment in order to save more tax?

Cheers,
Dom

Dom,

there are many potential ways to structure something like this.
1. Use other proeprty as securty
2. Use other…[Read more]

If this is going to be an investment then I would suggest you borrow 105% even if you have the cash. You can structure this so as to save more tax.

You might also consider charging your parents market rent – even if you have to gift to them money to help them pay their rent.

dongbell wrote:
Hello all, first post and new to the forum…

My name is dom and I am looking to purchase my first investment property in Sydney eastwood. (a town house – budgeted around 600k) Currently, I am making around 150k and wife on around 80k. The purpose of the investment is mainly for a. Tax deduction on negative gearing and hoping…[Read more]

The main difference is the tax consequences.

I would only ever recommend a LOC for using equity built up in a property to be used as deposit and for costs of a further investment.

thorpef1 wrote:
Thanks again guys.

So if i move to interest only this will be positively geared (it will put about $100/month in my pocket after all expenses, BEFORE tax) wish my current offset amount

Before i ring my bank up and get them to switch it over to IO, is there anything that i need to be worried about.
I will be constantly topping…[Read more]

thorpef1 wrote:
Thanks Jamie & Terry.

How will this affect my borrowing capacity though since it would mean i have a large amount of debt?

Yes it may effect your borrowing capacity. If things are tight you can always just pay down the loan when required – the flexibility is still there.

Also keeping your loan interest only may assist with…[Read more]

I generally favour not paying down a loan, even if you don't have any non deductible debt. (unless you are tempted to spend and then you probably should).

Building up cash in the offset will have the same interest saving effect, but it will allow you the option of using this money later if you ever do buy a PPOR or upgrade a PPOR or wish to buy…[Read more]

Do you have a PPOR home loan or other non deductible debt? If so put your cash in the offset attached to this, or you will be paying higher interest which isn't deductible.

Sounds like your so called advisor may be nothing more than a sales person??? take care