As a novice investor, I bought an IP in June in Brisbane to take advantage of the rising prices. However, the property is giving me negative cash flows. Because my income is tax exempt, I thought the better investment strategy for me is positive gearing and buy and sell rather than buy and hold. I finished reading Steve's book last week and would like to turn my IP into positive gearing via the lease-option strategy. Has anyone done it before or knows someone who is familiar with it to provide me with appropriate advice? Thanks.
If you are buying to take advantage of rising prices, then you may make less profit with by doing a lease option. This is because you (usually anyway) sell an option to the tenant at a certain amount. Later the property values can increase over this amount, but the tenant will still be able to purchase from you at this lower amount. This can result in the tenant making much more than yourself.. So you may end up given too much away to make some short term profit (small profit too).
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for your input. Is it possible then to fix a price taking into account the projected capital growth? How do sellers work out the selling price?
HI EveSydney!
Welcome to the site. I can help! If you like me to help with suggestions and maybe walking you through the process jut shoot me an email with you number and / or email and we can talk.
Happy days,
Beck
EveSydney wrote:Thanks for your input. Is it possible then to fix a price taking into account the projected capital growth? How do sellers work out the selling price?yes, it would be possible. eg. You could offer the tenant an option to purchase the house at a discount of X% against a sworn valuation – or the average of a valuation requested by yourself and a valuation requested by the option holder.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Beck wrote:HI EveSydney!Welcome to the site. I can help! If you like me to help with suggestions and maybe walking you through the process jut shoot me an email with you number and / or email and we can talk.
Happy days,
Beck
Hi Beck, what is your email address? Thanks.
Beck: please ignore earlier post asking for your email address. I have sent you a private message.
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