Any gurus out there (Queenslanders or otherwise) that can give me some hope??. I have had success with picking capital growth (-‘ve geared) but the cashflow is not sustainable in my plans to own many properties. I simply can not see any +’vely geared opportunities within cooee of Brisbane. Do they exist??.
The truth is out there.
Hi CJS
Not likely you may find neutrally geared properties along with some creative methodsCoreyj
CJS,
I’m not talking about buying way out in a mining
town. My example is based on typical properties in
one of our fastest growing shires, Caboolture. The
only catch is you need to be a high income earner
whose employer will allow you to salary sacrifice.
The following is based on a couple where the high
income earner earns $80,000pa and the low income
earners only income is the rent. They own the property
jointly.
House $230,000 Rent $210pw:
Income $210 x 52 = $10,920
Less Cash Flow Expenses:
Rates $1,600
Interest $230,000 x 6.5% 14,950
R&M 500
Insurance 400 17,450
Out of Pocket 6,530
Less Tax Refund 6564
Positive Cash flow 34Assume: Bldg Deprn $130,000 x 2.5% $3,250
Plant & Equipment Deprn 700Tax & Medicare on $80,000 $24,407
Tax & Medicare after introducing the
rental property & salary sacrificing the
ashflow expenses. 17,843
Tax Refund 6,564
Go to http://www.bantacs.com.au for a calculator that will allow you to work out your particular circumstances.Julia, Please explain exactly what you mean by “salary sacrifice”. In my limited experience only certain types of jobs (say doctors or not for profit organisations) can salary sacrifice. i.e. funding a mortgage payment before tax is taken (not after).
I am able to get a property that is slightly negatively geared to a neutral situation as per your calculations but there will be a point where i can not claim any further depreciation etc to make up for the shortfall of incoming dollars(rent) as I will eventually run out of income to deduct against. This is a problem as it limits the potential of the portfolio (not to mention the ramifications if one was to lose a job etc).Hi
Caboolture is my back door and I have looked at it very closely. I have several problems with the above example, 1) it does not meet the “30 second solution” 2) if you are not on maximum tax it’s negatively geared – as are most 3) to salary sacrifice – you need to get the advice of a registered financial advisor (tax agents cannot give financial advise from 1st April 2004)you can reduce your gross wages by sacrificing and/or packaging(put money into super and/or pay regular bills from your gross wage). this reduces you gross wages and therefore your tax each pay
(there may be a nominal cost). WARNING at the end of the finanical year the tax department will add back any packaging except super and re caculate gross wages and your tax bill – too many have had a big tax bill at the end of the year. the same problem occurs if you claim investment property expences on a per pay basis if you are trying to making a property positively geared by including tax incentives and claiming each week instead of waiting for a return. STRONGLY NOT ADVISED. If you are in receipt of any centrelink payments you have to add on all packaging each fortnight for centrelink payment caculation (salary sacrifice into super is the only deduction centrelink will allow)Basically if you’re not on maxium tax you will need to find a property that is positively geared before any tax incentives are included – accept as a bonus only especially in the begining. Have you read any of Steve’s books?
good luck!!!!!!!!!!!!!1
Hi CJS,
Do your strategies say that you HAVE to invest in SEQ? Are you investing with head or your heart?
Have you spent enough valuable time researching your niche?
I found you can spend endless number of hours doing your homework, yet there must be time when you are comfortable with going to the next step, the actual purchase of your first IP.Anything is possible, play within your own rules CJS
head above water
Afloat
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