All Topics / Help Needed! / Backpacking O/S in 12mths and looking to buy-HELP

Viewing 14 posts - 1 through 14 (of 14 total)
  • Profile photo of brisbanescoutingbrisbanescouting
    Participant
    @brisbanescouting
    Join Date: 2003
    Post Count: 27

    Hi Everyone,

    Obviously everyone is asking for advise but ill open this up for discussion – even if your not the resident expert. Keen to get people’s thoughts – there will probably be a handful of people who have travelled and were in the same situation as me.

    I will be doing the whole backpacking thing in 12 months time – I’ve saved $10k for an initial honey pot. I intend on working in my current profession [marketing] while in the UK, probably for 18 months (off and on) so i’ll have an income stream. My earning capacity will be strong.

    I’ve just sold my one bedroom unit in Southern NSW for a profit of $20K and left with an interesting scenario – I’m in the top tax bracket, earning close to a 6 figure income and all I have to show for it is $30k savings + $15K share portfolio. I want to reduce my tax – first priority. I’m in my early 20s but I’ve lost probably that much on horse racing -gambling, which I’ve just shaken [6 months without a single dollar on anything!]. I’ve probably got a few lessons for everyone – don’t get sucked in by the bright lights of gamlbing.

    My problem is that I’ll be earning a good income for the next 12 months and want to invest in something that is around $200K. From a maintenance perspective, a unit is probably my best bet and want something for the longer term i.e. 5-10 years. I’ll probably be overseas for 2 years + but don’t know as yet – might come back after 6 months. I can still get first homebuyers grant and looking for something that can be rented out – I have no plans to live there permanently but realise I need something to reduce my tax and as a growth investment.

    With that in mind, it would be great if anyone could suggest a strategy or any commentary on the direction I need to do some research in. I”m keen on QLD because of its growth potential but realise the market is half baked at the moment with room to go downwards.

    There are some smart chaps around and want to learn and make my own decisions. Examples of regions for growth, opportunities….anything that can help me on the road to recovery.

    I’m still very young but want to make a U-turn and get back on track.

    Appreciate anyones help :)
    AB

    Profile photo of nathan210nathan210
    Participant
    @nathan210
    Join Date: 2003
    Post Count: 81

    Hi bs,

    if you just sold a property that you owned, then how do you figure you can legally get the FHOG being that it is for First Home Owners?

    [blink]

    It is only your thoughts that create your future – Be careful what you think!

    Profile photo of grossrealisationgrossrealisation
    Member
    @grossrealisation
    Join Date: 2005
    Post Count: 1,031

    hi brisbanescouting
    Are you in Sydney.
    I would not give you advice as you need to structure your affairs to suit your needs but you should be looking a negative gearing in high growth areas for a number of reasons which I won’t list here as they are seen as financial advice (Which I don’t give)
    Have a chat with an accountant and they will explain

    here to help

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi AB

    I don’t want to argue with the above suggestion re negative gearing in high growth areas but remember that, as an expat, you can only offset your losses on a resdential property investment, against income earned in Australia.

    And when doing your planning, it is also worth knowing that there is no tax free threshold for non residents on any money they might earn in OZ while they are away.

    I hope this helps.

    Cheers, Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of brisbanescoutingbrisbanescouting
    Participant
    @brisbanescouting
    Join Date: 2003
    Post Count: 27

    So, if I buy something I can’t claim anything back when working / travelling overseas right?

    Neg gearing is a big thing for me due to tax bracket and keen for anyones thoughts.

    When people say high growth, could you give me an example i.e. northern suburbs of Brisbane

    Keen to invest in brisbane due to population increase over next 10 years

    Thanks for everyones comments and interesting in futher dialog

    BS

    Profile photo of grossrealisationgrossrealisation
    Member
    @grossrealisation
    Join Date: 2005
    Post Count: 1,031

    hi brisbanescouting.
    seek and find a good accountant that does both Australian and overseas tax.
    Not sure about claiming there maybe a possibilty depending on the structure used.
    Positive or negative is dependant on circumstance and the accountant can organise.
    for growth depends on the type of investment and your risk to profit mix again that is, work out your exposure requirement.
    There is no crystal ball stuff you need to look at the area you are looking at investing in and market research that area there are companies that will do the research for you but you pay for that I again are not one of them.

    here to help

    Profile photo of GPSnetworkGPSnetwork
    Member
    @gpsnetwork
    Join Date: 2005
    Post Count: 313

    Hi BS,

    You do sound like you need a negative property which I agree with due to your income and Parts of Qld are great places to invest, you just need to do your Research First! we are focusing on the Logan City currently, As well as Perth WA.

    Happy to assist.

    Roy H.
    L.R.E.A., Dip FS (FP)
    Guardian Property Specialists (GPS)
    http://www.gpsnetwork.com.au

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi AB

    Correct, i.e. as an individual, you will not be able to claim your losses against the income you earn overseas. However your accountant will be able to calculate your losses each year and these will accumulate. So when you get back you’ll be able to uses these losses, to offset your Australian income, in future tax returns.

    As always, please check all this with your accountant and, as has been said, spend the time to look for one that is experienced in looking after expats.

    Cheers, Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of Alistair PerryAlistair Perry
    Participant
    @aperry
    Join Date: 2004
    Post Count: 891

    AB,

    I suggest you take up Roy’s offer of a chat. He’s a very shrewd guy and your problems sounds right up his alley.

    Regards
    Alistair

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    AB

    If you want to shoot me an email i can pass your details onto a guy we use as a buyers agent in Brissie who finds undervalued property on a regular basis.

    Cheers Richard

    Ph: (07) 3720 1888
    [email protected]
    http://www.yourstatefinance.com

    IP funding and US property finance
    our speciality

    Richard Taylor | Australia's leading private lender

    Profile photo of ptdeeptdee
    Member
    @ptdee
    Join Date: 2005
    Post Count: 16

    Hi AB,

    I live in London now and work and pretty much are where you’re going to be. I have an IP back home and have found, for me, the most important thing when i’m over here is how much cash i’m going to have to send and more importantly, when. 2c currency shift can mean a few hundred dollars vaporised.

    I had to work out my cash flow here first as start up is a nightmare, you are moving to a new country to start a new life. If you’ve been here before i’m sure you know what i mean.

    As Paul mentioned above, your tax losses will accumulate but money is still being lost. This is not advice but for me, i can’t afford to just have losses building up, regardless. Mortgage structure is one of the most important things.

    Richard (above) and Simon are invaluable sources of info.

    Mail me if you need further info,

    PT

    Profile photo of gatsbygatsby
    Member
    @gatsby
    Join Date: 2003
    Post Count: 708

    Hi brisbanescouting,
    You sound pretty switched on and getting the best pro advise as recommended is not only sound advise but vital.
    9 years ago I decided to have a break from work for only 4-6 months. I came home nearly half dead 3 years later! I had no interest in property before I left and it ‘may'(?) have been in my favour, for ‘my’ situation. The point I’m making is that you will have no idea how long you’re going, despite any original plans as plans when you backpack tend to take care of themselves.
    I’m only saying this as you stated in your post that you don’t know how long you’ll be going (eg 6 months – 2 years). Also, if you are going on an Aussie citizen passport alone, I wouldn’t be letting customs know when you get there that you intend to work in any professional/non incidental capacity or you’ll get sent back. I’d even have your resume sent over after you get there.
    If I’m ignorant and have your situation totally back to front then my apologies. Just from your post, my humble 2 cents worth would be to have the ticket of freedom and do it now because you are right. You really have no idea how long you’ll be gone. I’d hate to cut backpacking short if you get the bug, only to have regrets years later on if you get right into property investing (or anything that life may hold for you for that matter). If it turns out you’re only gone for 6 months then nothing lost in the big picture.
    Again I apologise if I am being extremely presumptuos as I don’t know your exact situation. Backpacking isn’t a holiday, it’s your life! You’ll need a holiday when you return from it! (Or like others, just more backpacking!). Whatever your decisions and plans, enjoy and best of luck!
    “Backpacking in your 20’s can be saved, spent but never earnt??”
    Kind regards,
    Gatsby!!

    “Sometimes the hardest thing to do in life is often the best thing to do.”

    Profile photo of brisbanescoutingbrisbanescouting
    Participant
    @brisbanescouting
    Join Date: 2003
    Post Count: 27

    Thanks G!

    Well thats the unknown and I would prefer to keep it that way! If I stay for 10 years, I stay. If I stay 3 months and hate it, well so be it!

    I’m just conscience that if I dont funnel my surplus of funds, they may go to waste on travelling. I believe in bricks and mortar and long term, you can never go wrong.

    Obviously my strategy will need to take into consideration this which I know a few of you commented on – but would love others to provide commentary on their situation

    Regards,
    BS

    Profile photo of nazzysmithnazzysmith
    Member
    @nazzysmith
    Join Date: 2005
    Post Count: 102

    Purely as a suggestion, The market is reasonably flat, and your only talking about a 2 year period.
    Why not just slap the whole lot in the bank. If your earning that type of an income be serious and save part of it. 400$ aweek has to be easily achievable on that type of a wage if not more. (correct me if im wrong) You would be receiving around 1300 to 1400 aweek in the hand.
    If bricks and morter is your thing Build yourself a solid knowledge base over the next 2 years & take get the best interest rate you can.
    Take advantage of the low risk returns (at least 5.4%) & Come back with bigger buying potential.
    Now ill probably get shot down for all this. But the way i see it your gunna need your assets readily available. Because your on a HOLIDAY!!! Thats what back packing is!!!!!!!!

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