All Topics / Help Needed! / 1st meeting with accountant regarding property investing

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  • Profile photo of Aiden81Aiden81
    Participant
    @aiden81
    Join Date: 2013
    Post Count: 4

    Hi all,we have a meeting with an accountant regarding property investing. The accountant asked that we bring a list of questions to ask him. I have prepared the following;

    1) What is best structure for purchasing an investment property for tax minimisation?
    In joint names,
    Tenants in common
    Trust

    2) Benefits of buying new/near new property and older property for depreciation. How is it calculated ?

    3) Positive gearing V Negative gearing

    Anything else that we should be asking as first time property investors ?

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    I would start by asking what your accountant invests in. You may/may not be surprised that not all people including accountants are created equal. 

    Ask what their opinion of property investment is. If they say 'no' then you may be wasting your time.

    Ask about deductibility of interest on land purchase when you buy a house and land package. You may be surprised at how many accountants think this interest is not deductible.

    Add 'why' to all of your questions too. Get some depth in the answers you receive.

    Profile photo of Aiden81Aiden81
    Participant
    @aiden81
    Join Date: 2013
    Post Count: 4

    Thanks Derek.

    The accountant are Chartered Accountants & Business Advisors specialising in property both residential and commercial property and I know that he also invests in property. Will ask about the deductibility of interest on land purchase when you buy a house and land package.

    Anything else ?

    Profile photo of TheFinanceShopTheFinanceShop
    Participant
    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    The biggest and most important aspect is the future plan – all professionals i.e. Accountants, Finance Guys, etc should be asking and need to know your future plan/strategies so that the current structure whether it be asset protection, taxation or finance align with those strategies.

    Make sure you have this penciled before meeting him/her.

    Regards

    Shahin

    TheFinanceShop | Elite Property Finance
    http://www.elitepropertyfinance.com
    Email Me | Phone Me

    Residential and Commercial Brokerage

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    I agree with Derek.

    It's important to be on the same page as your accountant and like Derek said, not all are created equal. 

    An accountant that understands the intricacies of property investing (not just what you can claim and how gearing works) are quite handy to have on your side.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    What is better tax wise will depend on time – so have a horizon to work things out.

    Think of a lot of what ifs…

    And tax is not the only thing to consider, maybe it is a minor thing.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    https://terryw.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

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

    As Terry mentioned Tax is a small consideration as this will change with time.

    Few other things i would have been asking an Accountant about prior to Tax..

    Got an enquiry from a forum client yesterday whose Accountant had charged an arm and a leg for a super duppa Tax minimisation entity.

    Trouble is finance options are now limited and actually going to cost him circa 0.8% higher for the term of the loan.

    One of many things to think about.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of RPIRPI
    Participant
    @rpi
    Join Date: 2012
    Post Count: 308

    Spot on

    Absolutely 1st Question

    Do you invest personally in property.

    Many accountants know nothing about property investment, if you find one who actually does it they are going to be all over it.

    RPI | Certus Legal Group / PRO Town Planners
    http://www.certuslegal.com.au
    Email Me | Phone Me

    Property Lawyer & Town Planner

    Profile photo of RPIRPI
    Participant
    @rpi
    Join Date: 2012
    Post Count: 308

    You need a 3 way relationship that works.

    accountant 

    lawyer

    mortgage

    And you don't want any of the 3 to be a weak link.

    Letters after your name do not mean squat, look I have a huge collection  BApp Sci BEd GDLP LLM Juris Doctor.  Does that mean I know what I am doing? What about if I did all those quals straight out of school and had never invested, developed owned businesses whatever else.  If I did not have all the practical experience to apply those quals to, I would have an absolutely different perspective on things. 

    As an outstanding example,

    A client of mine lost a sale last week, because the buyer's  solicitor freaked them out because we had an "off the plan contract" or a "proposed lot contract" with a disclosure under the land sales act.  The solicitor had never heard of an off the plan contract.  I kid you not. This was the guy offering to do their conveyancing.  Never mind we have an approval under s19(2) in writing from the office of fair trading (allows you to sell up to 5 proposed lots where easily identifiable without registered survey plan). 

    I could list, except for confidentiality and client privilege reasons, the names of several of each of the following that I am currently suing for clients (different matters):

    Solicitors

    Accountants

    Real Estate Agents

    Buyer's Agents

    Financial Planners

    Builders

    Property Marketing Companies

    Building Certifiers

    A couple of whom were  outright intentionally negligent and thought they could get away with it.

    Most however either:

    stuffed up

    missed something

    or although they were legally allowed to work in that area of their profession, it was beyond their skills

    And we are not no win no fee litigators (apart from 3 times in 10 years in the history of the firm), we only litigate for commercial losses.

    Qualifications can often be only the minimum standard required to gain entry to a profession and a good starting point.  

    Choose the right people.  Recommendations on this forum area a great start,

    RPI | Certus Legal Group / PRO Town Planners
    http://www.certuslegal.com.au
    Email Me | Phone Me

    Property Lawyer & Town Planner

    Profile photo of Aiden81Aiden81
    Participant
    @aiden81
    Join Date: 2013
    Post Count: 4

    Thanks for all the advice, will take it all on board when deciding on the best accountant for our needs. 

    Profile photo of Anthony KAnthony K
    Participant
    @anthony-k
    Join Date: 2010
    Post Count: 56

    Hi Aiden and All

    You have three basic queries,

    2 Objective

    1 Subjective

    The 1st two

    1. Don’t buy in own name/s

    2. Buy land and build

    3. subjective: Positive v Negative

    Depends on you financial position to decide which is best for You

    A FREE TIP

    Your personal exit strategy is predicated on your entry decisions – it’s your only time to do it correctly for you.

    If you want know why – respond here and I will reply.

    Regards

    Anthony K

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