Freelance

You are assuming that capital growth property is negative geared – this ain't always the case. The ideal proeprty would be one that is positive geared, in a area with high growth potential and one which can be value added (reno, sub-divided, extra room added etc).

Capital growth is what makes you rich. It doesn't really matter how you get it, but the more you get and the quicker you get it the better!

Daniel,

Why not use Eddie? or at least consider him? He seems very helpful and knowledgeable.

YEs, it will. You will be earning a shit load of money which doesn't hurt, and you can always get to know builders and other tradespersons and go and build a few houses cheap.

Banks generally only do this for spouses – married or defacto. They will ask what benefit does your brother obtain from going on the loan with you.

However, some banks may consider this under family assistance type loans – though this is usually parents.

Here are my non accounting views.

If the property is sub-divided there will be 2 separate titles. Each owned by the company, with half of the loan attributed to each. If one townhouse is sold to yourself, then the company will receive funds. It should use at least part of these funds to repay the existing loan – the half that was sold.

It is like borrowing from your LOC to buy shares. Once you sell the shares you can't just put the money into your home loan and keep claiming the interest on the money originally used to buy the shares – as the shares don't exist anymore. It may be different if the company you had shares in went under and you still had a loan.

Another problem is the bank's security. If you sell one property, then the company remaining property will not be worth enough to keep the original loan size.

Am I reading your post right?

And you don't have to buy 2 now, but you could do it so you have the ability to get the grant again in the future.

If you do have a holiday while going to inspect your apartment – or do any personal stuff, then you will need to apportion your claim.

Thanks for clearing things up with the losses Eddie.

It is interesting what you say about accountants and trusts. I had one client who was an accountant (not sure what qualifications) and he had no idea about trusts. There are many others that I deal with and they only know the basics.

It is the same with lawyers. Trust law is compulsory part of the degree but some lawyers do not understand the benefits of using a trust. A lawyer friend is involved in high risk business all the time, and he has always purchased properties in his own name for some reasons.

I guess it is like a doctor that smokes – they don't follow their own advice.

Check with your accountant – usually just a diary entry is that that is needed to prove travel. If you are flying interstate, then you can keep your boarding pass and hotel receipts – I think you could also claim meals to a certain extent. You may be able to claim more if you drive though – about 70c/km.

For the gardening, you can claim mowing while a tenant is there – but is this commercially justified? ie is the rent higher to cover this? Otherwise it is usual for a person to mow their own lawn.

Just as a rule of thumb, anything that you spend on your property or to increase rent, attract tenants etc could be claimed. Just start thinking creatively.

what about a guard dog? Can you depreciate a German Shepherd over 5 years? You could probably claim food etc. that reminds me there used to be a list of potential tax deductions at http://www.gatherumgoss.com