Hi all….
I am just starting out and would love some feedback.
I have two strategies which i plan to implement.
The first is in partnership with my parents. Our plan is to buy/renovate/increase the rent to achieve CF+, and use equity to finance the next investment. Our objective is to attain 20 properties in 10 years. We will be putting aside 5K each per year to cover any unexpected shortfalls. I know people advise not to go into business with family, but its not an issue. We have already bought our first property and are planning the second in the coming months.
My second strategy is one I am currently planning. As home prices are insanely high where i live (Port Macquarie NSW), I would like to buy unrenovated properties (units to start with), live in them for 6 months while i renovate, and then sell, hopefully gaining $20,000 after all costs. As i understand it i should avoid capital gains tax, yes?
Is it advisable to use the entire profits to fund the next property?, as there will probably be money left over each time i buy (after all costs), or should i invest the surplus money into another investment? eg shares, super, managed fund.
All comments welcome…
hi eezy
i think you plans look good.
i’m with you the family thing shouldn’t be seen as a negative.
with the second plan , if you can make 20k profit i’d say put it back into your property investing. Shares are at record highs, super you can’t touch till your Old, and managed funds, well if you want shares do it yourself.
all the best
regards westanI live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi eezy
sorry some thing that you may not have factored in.
stamp duty in NSW when you buy and when you sell, and Capital gains tax will be paid on the full amount if you own the property for less than 12 months (you may get away if its your own home). So a huge percent of your profits will be taken by the Govt. Then you have the agents selling costs also !!!If you want to be adventurous- your strategy would work great in NZ as there is no Stamp duty or CGT (unless your a trader). I’m active with this myself in NZ.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Thanks for your replies westan,
Yes i think you are right, putting profits back into property is probably wise. I would have more to put towards the deposit and costs for the next reno, and be able to buy in better areas. I plan to be able to buy into the lucrative canal homes within the next 6 years, which is where big money can be made.
As for the capital gains tax, as each property i renovate will be my PPOR, it should negate that shouldn’t it? Perhaps i need to live in each property for 12 months instead of my planned 6?
I guess there is no way around stamp duty, but as i am a carpenter/designer by trade i will save myself thousands in renovation costs, so i guess the money i save there can go towards stamp duty.
I think i’m a little too green to be venturing off shore just yet[cap], but its certainly something to think about for the future.
Thanks for the comments
You better check if 12 months is long enough to keep selling your ppor after renovations especially if your a carpenter. The ATO may deem this a business.
Your strategy is sound. Have you read the Peter Spann books. Thats what he does. Its a must read for you. I have read them both and sort of do this.
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