sfrodgers wrote:
The biggest trap with LOC is that people use them for investment purposes and use them to pay personal expenses. A LOC should be set up to have all your rent paid into that account and then all your IP's outgoings  paid from that account. No personal expense should be paid from the LOC because the tax department will crucify…[Read more]

valuation

Yes you can use a trust. But you will have to overcome the PSI rules – personal services income. Check with your tax advisor.

You can only have one PPOR at any one time, but if you were to get another property later you can change which one you class as the PPOR – and the first could be the main residence up to that point and be CGT exempt.I think it might be better to get a high LVR loan initially and then put the spare cash in the offset account. This will result in…[Read more]

Don't want to give away too many secrets – but a very good location. The commercial property was empty, but soon found a tenant with a couple offering more than expected. I think that one was around 15% yield based on purchase price and someone offered $100,000 more to buy it before it even settled.

yep, it would be unusual for a bank to give you a copy of the valuation. Sometimes you can get it out of them though.You should see a broker about borrowing, but as a very rough guide you could get around 5 to 6 times your annual gross income in total loans – but would depend on a lot of variables.. up  to 90% is still possible

This is how I would do it.Existing Loan, call it A, at $258,000 + offset account attachedLoan B, separate loan, at $79,500 Interest onlyFind a new property and take outLoan C for 90% of the value, Interest Onlyuse loan B for depositLoans B and C should be deductible and this will keep your house from being used as security for the investment. Loan…[Read more]

Scotts,Not really. The company is a separate legal entity that doesn't allow distributions to beneficiaries. Any profits would be distributed to shareholders in accordance with the % of shares held. there is no flexibility in distributing money.But there are ways to get money into the trust.The first is for the trust to perform some sort of work…[Read more]

Agents estimates are worthless from a tax perspective as they are mere pitches to get your business and not valuations.You can actually order a valuation and instruct the valuer that you want the value of the property as of a certain date.

oh, and one property doubled in value within a year too!

Usually high yields means high risks – the price had had to come to a level where the property could be sold.But a mate of mine has recently purchased two properties in Sydney with very high yields. He could retire and live on the profits after taking into account the expenses and 100% borrowings – thats how high the yields were. One was…[Read more]

I believe so – but this may need to be apportioned over the total time. eg if you sell within 12 months and live in it 6 months of this time then it was an IP for 50% of the time you held it so you may only be able to claim 50%.Also borrowing costs (such as LMI and app fees etc) are not capital costs and can be claimed against income over 5 years.

Since commission is varaible – it could be nil in some months couldn't it – the banks will need to see a long history of you receiving it before they will take it into account. You would need between 1 yr and 12 months history i thinkMaybe you could convince your employer to change you to a higher salary component for a month or so until you get…[Read more]

I think yield should not be regarded as profit but as return on investment (before costs). it doesn't take into account borrowings just return based on value.

Can you prove that?

There is no transfer required if you wish to change your property into an investment. You simply move out and rent it. Not really a loop hole in my opinion as the requirement for the FHOG is to live in the property for at least 6 months. As long as you do that you are abiding by the regulations.

I agree that you should only deal with a major bank, or you will regret it later when you want to change the loan, get a LOC, access equity or exit the loan.

I agree that you should only deal with a major bank, or you will regret it later when you want to change the loan, get a LOC, access equity or exit the loan.

subject to your income etc, the bank will allow a total loan of 80% of the value of the house – maybe 90% with LMI.To work out how much extra you could access just follow this forumula:value x 80% – current loan.Make sure you get this equity as a separate loan, ie don't increase your current loan but get a separate one.Then use this 2nd loan as…[Read more]

Possibly you may even have a capital loss.You will need something better than the "bank said" though if audited.