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I agree with the others, but it still could be a good idea to do if your other debts have larger interest rates.
Terryw
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CPI (consumer price index) is a measure of inflation. It is determined by the prices of various commodities – not sure exactly is excluded, but most things are included. The CPI figures come out each quarter. You would want your property or shares to grow by at least the CPI or you will be going backwards.
Terryw
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What about comparing “cashflow vs capital growth” strategies.
Terryw
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Depending on the business, maybe neither.
If it is a general trading business, probably a company – for the limited liability factor.
If it is proerty, look at a trust, possible a unit trust and/or a discretionary trust. You may also need a company as trustee.
Terryw
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Be careful of buying low cost country properties.
Terryw
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What about just gettting a loan securred on one or more of your properties and then use this for your business setup. Interest would be deductible, and you could keep your properties and save on selling fees, CGT etc.
ps. you should not have property owned by a trading entity as it will be at risk if the business goes down.
Terryw
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hi Richard
Yes, Trust Magic is good isn’t it!
An accountant can set up your trust, but they will be simply buying one over the internet. You could do this yourself as well.
I don’t know about the costs. I have heard accountants say you can claim the costs, but I always thought the cost of estalishing a trust was a blackhole type expense.
Terryw
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Yes, they could be at risk. Having one house per trust would be a good idea, but it would greatly increase costs etc. I suppose it depends on how expensive your houses are.
Terryw
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Yes, having held an ABN for 2 years or more will help greatly in obtaining a low doc loan.
Terryw
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I think you could.
Terryw
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Just remember that there is not just one property market in Australia. There are many, each at different stages. Each city is different, and even within cities, there would be different stages for different areas.
Terryw
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You could increase the loan and use that to further your investing, but this is more risky (still low though) and it should speed up your acquisition of more property.
Terryw
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You should only put more cash into a deal if you haven’t got an existing home loan. If you have an existing home loan, it would be a lot better for you to place the money on the home loan.
Putting down more cash will also slow you down, as you will run out of deposits quicker.
Terryw
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Your at about 83% LVR now. If you bring the LVR up to 90% (based on $350,000), that would give you an extra $23,000, BUT you would have to pay LMI.
Selling the property only to rent it back would be very costly, and probably should only be considered as a last resort.
Terryw
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Well done Jason and Dazzling.
I suppose you culd offer an incentive to the agent as well. eg. Offer to pay a small bonus if the place is rented within X days. etc
Terryw
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Calvin
No, I haven’t done one of these, and have actually never seen one done. It is all theory so far – at this end.
Terryw
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Calvin
You could use any 3 of the methods you mentioned above. It all depends on your negotiating power and the vendor.
I would think vendor finance is fairly rare, and that you wouldn’t need any licence. It is just really a private loan agreement.
Terryw
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If you tell the SRO about issuing new cotnracts, they may make you pay the stamp duty twice. Talk to a solicitor before doing anything.
Terryw
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You can’t claim it as a main residence until you live in it. So during that time you will not get CGT exemption, so it is a good idea to live in it asap. No lenght of time is specified as the minimum, but generally 6 months is considered advisable.
Terryw
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Get some good advice before you do anything.
If you live in the property, you could class it as your main residence, and it will be CGT exempt for a period of up to 6 years if you do not class another proeprty as your main residence.
Terryw
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