Give the department of fair trading a quick call. They are fairly helpful, and probably know the NII group by now and what they get up to.

Terryw
terry@discoverhomeloans.com.au

Psotive income means you will be making a profit and hence paying tax. You can reduce the tax you pay by other deductions such as travel expenses, study materials, maybe depreciation etc.

Holding the property in a trust would also help!

Terryw
terry@discoverhomeloans.com.au

Lend it to me!

No, seriously, you could use that money to buy a house for cash. It will have to be a good buy, under market value. Do some minor renos (mow the grass maybe?) and then approach a bank for finance. Tell them you have done the place up and it is now worth $20K more at least. You then may be able to get 100% finance and release your…[Read more]

As far as I am aware there are no fixed rules with doing this. But at some stage, the ATO will deem you to be operating a business and you will have to pay tax, even if you are living in the houses. I have heard it suggested that even a couple per year could raise the suspicion of the ATO.

You can make some really good money doing this…[Read more]

I just picked up the last copy at Dymocks, North Sydney. Looks good so far. It is a fairly big book at nearly 400 pages.

Terryw
terry@discoverhomeloans.com.au

Alanek, Just out of interest, what are the transport costs like?

Terryw
terry@discoverhomeloans.com.au

I beleive it can be done, but haven’t done it myself.

Advantages
-Can claim expenses against other income, ie negative gear
-Asset proection
-can also furnish the property, and claim or depreciate almost everything you buy!!!

Disadvantages
-ATO is cracking down?? (I recall something from a few years ago, maybe a tax ruling, about this and unit…[Read more]

And don’t forget to tell the valuer what you want it for. Don’t worry about paying another $300, it isn’t that much money when you consider the savings. It may even be worth getting 3 done and choosing the highest.

Terryw
terry@discoverhomeloans.com.au

I agree completely with JH.

Don’t know about Dave’s proposal of buying in a trust. On average Aussies move every 5 years or so, so you are likely to decide to move out of your house at some stage in the future. I suppose you could just keep it and rent it out, buy a new one in the trust and re-rent that. But if you sold the CGT could be…[Read more]

Kate

I would probably go for option 2. Buy a home, and use the equity.

The PPOR is really the only tax free investment you can make, so it is definetly worth buying anohter. Als if you were to pay $15,000 pa rent, you would really need to earn $25,000 before tax.

If you get a good high growth home to live in, even…[Read more]

The interest can be claimed for anything purchased that is investment related.

Legals
Stamp duty
mortgage stamp duty
inspection flights/hotels (maybe?)
repairs
improvements
gardening
cleaning
rates
inspection reports
strata levies
buyers agent fees
research
etc

Keep your cash to pay off your home loan and borrow the rest (if you…[Read more]

Tas Investor

Where is your property, Tasmania by any chance?

If it was in Sydney (ie expensive) you could probably get it down to under 2%, but if in a cheaper country type area, the agents are not making much.

Imagine if you were selling $35,000 properties in broken hill or $500,000 properties in Sydney. Imagine the diff in commissions. And it…[Read more]

It depends.

If you are just using the LOC for deposits on further IPs then it will work fine.

However if you intend to use it as a day to day account when related to investing, then watch out. The ATO considers any deposit to be a repayment. This means when you withdraw the money again, the interest may not be taxable.

Eg you purchase a…[Read more]

Hi Paul

Good point. I have all of the expenses paid by the tenants and so have (?) arranged for all rates notices, water rates etc go directly to them. I only get a copy if they don’t pay on time. I have a few water rates notices for these properties, but so far no rates notices. I just thought they were paying on time. But maybe not! The council…[Read more]

Hi I think Dram is correct.

In NSW you just state on the fron page of the contract where you want tenants in common (with % sahre) or joint tenants.

Loans will have to be joint at the same bank. Both parties income and expenses etc will be taken into account

Terryw
terryw@froggy.com.au

Yes it is pretty amazing. I had 5 properties with this bank, and I had already gotten to know the names of most staff in their complaints section. various thngs going wrong, delayed sttlements because papers were sent to wrong state etc. The bank is already paying for my extra legal fees on my last 2 property sales.

Now this is a strange…[Read more]

This is a difficult question that many people face.

If you rent it out you will have to pay tax on all the rent, at the same time you will be paying interest on your new home whith after tax dollars.

If you sell it would be CGT free. So maybe if you can get a good price, it would be better to sell, and use the money to pay off your new PPOR and…[Read more]

BruceG

Trusts may not protect you from the banks, but if you get sued as an individual it should protect the assets held in the trust.

But the major reason is tax savings.

Terryw
terryw@froggy.com.au

NewToPI

You could claim it as your PPOR, but the period is limited to 6 years. Since you moved into it again, the 6 years starts again. SO I think you probably could claim it as your PPOR. Check with your accountant.

Terryw
terryw@froggy.com.au

Purchasing an Option on a property is very common with Developers. One of my clients had a developer purchase an option on her property. He then went am purchased options on all 10 houses in that block. Once he had options on them all, he then submitted plans, DA etc to council and got approval to build a huge block of units.

The good things…[Read more]