Forum Replies Created
Thanks Jamie
So technically if I was to refinance it whilst a ppor and take the equity and use it to the next ppor, get it valued then turn it to ip would this reduce the amount of CGT payable?
I have a site good for 5×2 bed units, plans are drawn up for 1 x duplex and 1 triplex has in the design would it be easier to go for two separate loans or keep it as a single loan? Would this work as they are on the one title, Its also in a rural area.
thanks heaps Richard
Thanks for that qlds007, so is this at any certain point of the construction (say after footing stage) or when you have spent 25% of the value?
Something to think about when investing in property is to think business like. When a business/company; spends/earns money it is treated different to a personal income from the ATO
personal income – pay tax – spend (bills etc.) – money left
business/company income – spend (bills etc.) – money left – pay tax
Get creative, think of different ways to add value renovate, subdivide, add a granny flat, buy a duplex and strata or turn a bigger house into a duplex. There are plenty of options to create equity/value/income.Think of how you can use money/loans to create more money/income remember that money used to make money is claimable from the ATO in someway. Instead of using equity and cross collateralizing your property, maybe use a line of credit, it will cost a bit more but taxable if using for investments.
Take this comment in general and consult your account and other professionals before doing anything. Everyone has different ways of doing things so do what best suits you.
Council – I have had a couple of clients looking into doing it in NSW. It is pretty simple to convert. In NSW we have a system called BASIX which was introduced by the state government to reduce water consumption, heating/cooling loads and energy. Technically it would have to pass the requirements for a clad framed house. Council may also consider the location of the block ie. if it was in the suburbs it may not be looked on as a favorable solution as it maybe on a hobby farm block of land.
Costs – I have heard of them costing as low as $1000 but check online auctions they have them, but factor in the delivery. It should be reasonably check to convert
Time frame – How quick can you work? Some come with timber floors in them already. You'll need to fix battens for plasterboard, ceiling, wall and floor insulation (if required in your state)., electrical wiring and lighting etc etc.
Design – keep in mined they can be stacked up to 7 containers high from memory, come in 12.2/6.1m l x 2.4m w x 2.59m h standard sizes. They are very structurally sound with around 3-4mm wall thickness
"Wouldn't want to be in one if struck by lightning " I hope this helps
Thanks Terryw. So as long as I keep records of what is what I wont affect the mortgage when it comes to tax time if just used for private borrowings?
Check with the drafts person to see if this includes everything for Development application and construction certificate. If anything like NSW it's not just plans that you'll require for a submission. Check with your council and get a list of requirement for a submission then see if/what they'll be giving you for $4500.
I'm a designer/draftsman and the price seems to be on the high side, just make sure you are getting everything required for the submission ie. sustainability report, footings certified by structural engineer, statement of environmental effects etc. etc.I hope this helps
Congrats on your first ip. Get experience, you'll find heaps of it here and most of the people have a fare bit it and best of all its free…many people have different ways of doing things…and I am no expert but someways to do it is
– buy lower than market value, renovate, force some equity in the property then use it against the next ip.
– learn how to use different loan types to benefit you, if you dont earn loads of money dont be affraid to use other people ie the banks
– Buying for income or for capital gains assets?
Work out what way suits you or mix it up.
Hope it helps
thanks, that's what i meant. When claiming for depreciation; with the house being ex. ppor does this change things at all or once it is an ip?
thanks terry,
are you able to tell me whan interest is claimed as a loss is the rent taken into consideration as income?
Thanks Jamie
The only reason for a company is security, My intention is owning numerous ip's in the future what would you recommend or just have them in mine and partners name.
Cheerstry this link it may or may not be useful as it is pretty general and doesn't include the specific's
http://www.homedesigndirectory.com.au/calculators/ConstructionCostEstimatorPage2.shtml
I think this one can be used for property investing
"In the middle of difficulty lay's opportunity"
Albert Einstein
If the zoning is as you say I would go to the Architect/draftsman first. I would only engage a Town planner is there was a different zoning other than residential or in a heritage part of town.
Check your local DCP – development control plan and/or LEP – land environment plan.Check the DCP for land to space ratio's, eg for 85m²+ residence per 250m² of site area. This will give you some indication of areas and how many townhouses you may be allowed. There may also be a street allotment size eg. off a main road they may require a minimum width for the block.
If the zoning is for med to high density I would suggest trying to max the block to maximize your potential development. I am not an Architect but I am a Structural and Architectural designer and suggest if you are on a budget and don't have alot of money to waste on fee's I would go to a designer as Architects can be over valued and may charge a percentage on the development, the highest I have heard of people paying up to 15% on the value of the development, so check first before you commit.
Most professionals should be able to give you a indication of what can be developed with a short consult. I hope this helps.
Thanks Terryw, So if I used the equity in the block for ppor2 would I be any better off? Sure the interest would be lower but I would also have 2 loans with most if not all of the return from the ip going back on to the loan with no passive income. I'm a novice on how using equity works but want it to get the most out of it. Would my idea not work or would I be doubling up on loans somewhere? Any suggestions? Cheers
Thanks for your thoughts, the theory behind the madness was to have the additional income coming in. Say if the rent would return approx. $180 p/w would the the return on the interest/tax be a better? I am open to suggestions if anyone has any.
Why not do what Steve done and try in a rural area? There are decent properties around the $150 to $200k even lower, how ever the capital gains are lower but if your looking for +ve property worth a try.
For a quick feasibility study to get a figure to work with
– for new building I allow $1500 to $2000 per m².
– tradies I allow $100m² (not including plumbers or sparkies)
– plumbers and sparkies upwards of $8000 for a house eachQuantity surveyors use Cordells or other costing programs then add a percentage for the relevant postcode
try this link
http://www.homedesigndirectory.com.au/calculators/ConstructionCostEstimatorPage2.shtmlI hope this helps. Cheers
Emptyvessel
– If you are looking at doing a Strata title check your council for section 64 and 94 contributions, with strata title they can amount to $10000 per dwelling/unit for (section 94) – sewer/water, section 64 contributions may be a % of the cost of the project. These are for NSW but check you local council, these are paid on approval.
– Have a building consultant check fire rating and party walls comply. If no masonry party walls fire rated plasterboard or similar will be required. A minimum of 900mm may apply
– There may be a minimum area size per unit/villa say around 250 to 300m² for a subdivision .
– Common areas also come into play.
– Consult your council first before you star forking out money for consultants.
