Hi,
i wona buy an investment property,… iv been thinking it for a while and found a nice city 1 bed unit for $270-300k, with decent rent of 350-400 a week. i make around 100k pa and wona make sure i get the most tax possible breaks so i wona neg gear it,.. anyone got any tips or tricks? ill be borrowing as much as possible to maximise the tax i get back..
cheers
Apartments run a higher risk of being valued by the bank at a lower value than the price you're paying to buy it, especially brand new apartments. For example, you've signed a contract for an apartment for 300k, but the bank's valuation comes back at 290k, then that extra 10k will have to be funded by yourself. The bank will also ask you to show evidence that you can fund the gap before they approve the loan.
With your income, you really should speak to a professional as previously mentioned because there are a lot of other investments you can do other than getting an apartment.
Perhaps i can use that to lower the sale price.
We all are so.. much into how to make more and more. Never happy with what we have…Believe me if this is the way we move forward….you wont get any happiness ever…..
People like this jack up the property prices. We all are part of this madness… Property has already grown to ridiculous amounts. Families are struggling. People are living like slaves in this country… working 8 to 12 hours like a dog. That 10k, 15k that you save in the tax, will be spend to buy a landrover Vogue(not in savings..). I am very sure we wont use that to feed few families who don't have much. You just make the real thief's (the banks) richer.
My advice is give what the government ask you to pay as tax (if you are too worried about that tax amount go and get a lower paid job so you save straightaway in tax), Gov do a lot of things for us. We elect the guys who's is sitting right at the top. If we don't like the way they do stuff, vote them out…
Stop thinking just about ME and start thinking about the society as a whole…
Buy one house for your family, Investment property is a gamble….. you might gain or lose a lot.(banks, taxman, realestate gurus wont lose a penny, they all will be after you till you die)
Stop getting advices from people who want to put you into more trouble ….
Go become a monk in Venezuela already.
hehe….
….. At least type your reply in word and let it fix some of the spelling mistakes before you post the comment.
"If yar wona point fingures look at the babey boomers."
When I see people write like that talking about being cashed up I start to think scotty34's school of thought might have actually have a point.
Meritocracy is dead, or 'deded' so that T1OOO can understand.
why cant i edit this?
Who says im trying to be happy?
The money i invest instead of letting the gov squander ultimately creates jobs.
Its economics. The whole point of negative gearing was to create more homes for people to live in. Especially those that couldn't afford them at the time. Its why it rewards people who try to create something instead of sitting on ur but defaulting the country like the usa and Europe.
If yar wona point figures look at the baby boomers. they own 75% of property or something ridicules like that.
And u say give the money to gov via taxes?
Howards fhog created the bloody problem of house prices doubling over night with cashed up bogans getting their deposit just for turning up and then some.
Uv been owned on the facts sir.
Please, for the love of whatever - put your posts through a word processor and make sure your sentiments appear coherent before posting.
It's very hard to read past a few words when you post, regardless of what you intend to convey, due to your incredibly poor grammar and spelling.
You should be embarrassed.
T1000… We all are trying to find happiness… I am not pointing finger on u..
When we see gov doing silly things with our money we should raise voice and pull them down…This is not Iraq (during saddam or after saddam).
Negative gearing might be good or bad but buying a house just to save some tax shouldn't be the first thing that makes us buy a property. More in your account will make us happier at retirement is a myth. Me or you will lose the job anytime, then negative gear will the become the reverse gear and the accelerator will be pushed down to the floor…
Yo dog, you serms to know what yo doin. Just don't be a wuss, go buy it, Don ask question. Whats the worst can happen?
Drop the biskit. Don't riskit.
Yukon do it. Just do it.
think about the baby b4 u get all crazy!
Ensure its strata titled and not company titled. If numbers work out, just go for it.
Also remembering tax laws can change. Choose a good investment regardless of taxes, not one with good tax advantages.
No offense op but by reading this thread, it seems you're trying to show your knowledge about investment. Anyone who's given you an idea or something, you've argued with them in return.
id think im showing the lack off,… i think the argument thing came about the miss understanding of a serviced apartment vs proper stand apartment.
i am not really knowledgeable on it, i havent done it,.. but at the same time i wanted to clear it up..
could just show my stubbornness?
and "argued" is such a harsh word, i think its “Discussed” or “conversed” would better aptly describe it.
I cant and dowana read dis tread nemore.
OP, you've done your calcs and looks like you're confident of the good outcome. Just do it! Don't delay, especially if you want to claim the property outgoings on your tax this EOFY. Loan approval and settlement can take a while so act as soon as you can. Keep us posted on how you go.
I agree with the op, assuming the figures he quoted are correct.
Yes the banks will class it as a "serviced" apartment and lend less, so future buyers can pay less. But then the op can use it to his advantage to buy at a lower price than if it wasn't a "serviced" apartment too.
yeah man, this is what im thinking, there are properties on the same level, the other one just lowed its price from 300+ to 290, so i def can play them off each other..
ill ask them for their bank evaluations ;-)
im thinking of putting a OZ bargain offer in at 245k!
ahhaha
Also to the speelliing naaziis - their (c w0t 1 d1d hear?) dere ist a diff beetwen beein abel 2 spel n n0t car1ng. hoope dis pos maks yu fil uncomphotarbel
vry cr8iv!
Got that out of your system? Back under the bridge now…
I so learned much investiment tipp T1ooo from.
Since posting, I've gained a bit more perspective, and change some of my thoughts,..
things to highlight:
I do need to speak to a financial adviser, but a good one, not one that is tied to a bank who is just a sales man trying to push their own vested product. I’d imagine they won’t be cheap either, so having a list of questions to ask will serve me good.
I do need to speak to an accountant also, again a good one who specialises in property investments. And I will need to get a good lawyer to look over the contract before I sign it. Perhaps even talk to a conveyancer?
I need to speak to people who have done it before me, in particular in strata serviced office type places… A friend of a friend has done so, so I will put out the feelers.
I need to read all the ATO stuff on IP. https://www.ato.gov.au/Individuals/Income-and-deductions/In-…
I need to visit somersoft and start posting and reading there, but everything seems so positive like it’s even easy to do, but I can’t help think it’s mainly people who are too pot committed and are trying to keep up the facade up and not really gona tell me the truth. Kind of a medieval kabal ;-(
I need to find people with horror stories, this advice I need, learn from others mistakes.
I need to think about houses, not just apartments, sure might not get me as much yield rent wise, but capital gains will be larger and no strata which would mean an extra 100,000 I can borrow instead of paying that.
Good Tenants will be important to find, kind of knew this myself already.
I do need to factor in 2-4% point rises in interest rates down the track, and see how that stacks up.
OZbargain isn’t really the place for this sort of thing, most (not all) don’t have the experience, and are too worried about nit picking spelling and grammar than being helpful,… finding great deals on that Bic set of 5 blue pens for $50 cents , Oz bargain is the right place, getting any sort of meaning full advise or discussion , nup.
Ill add that in the early 2000’s everyone that touched property MADE money and good money. For instance I bought a house, for 200k,.. a few years later I sub divided the land at the back and sold it(the land only) for 240k, ended up paying of the house outright… So basically got a house for free. But things are A LOT different now, Hardly anyone can make money, property prices will only stall if not fall for the next 3-5 years, perhaps in line with inflation. The FHOG being yanked really did put down ward pressure on the market, and it really is a buyers’ market now, so if you can find a good place its def a good time to buy, just don’t expect crazy capital gains growth.
And for the record, im time poor, so usually post on the go on my mobile, sorry if I didn’t use the right 12 point true type font or shade of colour or put capitals for each sentence, hopefully that doesn’t upset the English Professors around here.
I agree with the entirety of your post except #10, which seemed like a really pointless addition to me. If that's what you think of OzBargain why did you post this thread in the first place?
I don't think it is unreasonable for us to expect someone who earns $100,000 a year to at least have a grade-school level of grammar, punctuation and spelling.
I also agree particularly with your assessment of the property market in the early-2000s. It is for this exact reason that I don't think investing in property is a particularly smart move at the moment. There is a lot of risk - not only with interest rates but with the risk of having the property unoccupied, shit tenants, or requiring lots of work and upkeep, which will all erode your small gains anyway. There are so many good rental deals out there at the moment (especially in Adelaide, when I moved house at the start of the year I was amazed how much prices had dropped since I last entered a rental agreement in 2012) that I consider my savings are better invested in the share market, taking tax advantages through fully franked dividends instead. :)
If/when I move to Melbourne some day I'll look at buying a property then, but it'll be a property to live in.
I posted because I thought it would be a good place to get info, AFTER I posted, iv changed my mind…. when I came into it I thought id get some helpful hints, like the tax thread in the past. Hence point 10 is valid.
I don't think it’s unreasonable if someone really doesn’t understand something, to just post seeking clarification, rather than posting insults, seeking no actual clarification, mainly because 1. They understood what I posted regardless of the lack of grammar and a few typos, they just don't care and want to nit-pick as there really isn't much more they can add and want to post anywasy. All im trying to do is get a head in this world, and I don’t really let it phase me too much, I suspect those that waste their time with it, wont have much to add in any case.
cheers
I see the stock market as very high risk, and much more complex,, I know about 20-40% about property, id know about 2-5% about the stock market of what I need to know.
I only know abit about fully franked dividends. They are where the tax has been paid for you? and you didnt need to pay tax? But see, I thought that by doing that its not as good as the shares the company has not paid tax on. However if you were to buy them and pay the tax yourself you would be paying the tax on them at a lower tax rate? Hence end up getting more for less….
see I don't really know much about it, not sure anyone does, but that was the jist of it, you get the share at a less tax though the marginal rate that you pay. Unless you want to explain it in a way I can understand it and why its better?
This gives a succinct explanation:
https://www.mywealth.commbank.com.au/learn/managing-investme…
You obviously need to be buying shares that pay fully franked dividends though, not all companies do.
The tax benefit only exists where you pay less income tax than the company tax rate. If you earn $100,000, you may well end up paying a total of 30% of that in tax so you will be limited in your ability to take advantage of fully franked dividends.
There are other ways to mitigate tax by investing in shares - margin loans (where you claim the cost of the loan as a tax deduction) being one of them.
There's risk in every investment. Go with what you are most comfortable. If you think you can make a decent amount of money out of a $200,000 or $300,000 apartment, then go for it - you should be able to easily manage that on your income. Just don't go expecting huge capital gains (whether you buy an apartment or a house) - not that it looks like you are expecting that anyway - I know of more than a few people who have bought houses only to sell them at a capital loss a few years later (thanks to flat property price growth since the GFC). Capital losses are however good for your income tax return… ;)
thanks, yes that's what I thought, my actual tax is less than 30% after deductions, ect.. so with an investment prop I can also take the shares too….. do I need to borrow and neg gear them too for maximum benefit?
ill read the link after lunch.
cheers
You still benefit from franking credits if you pay more than 30% tax, as fully-franked dividends represent income to you on which you only need to pay the difference between your marginal tax rate and the company tax rate (if you pay over 30% marginal tax). Before 1987, you would've lost the 30% company tax AND your marginal rate of tax on the dividend.
Yes, to maximise tax benefits you will need to borrow to invest (this is exactly the same as negatively gearing a property, mind you - your mortgage repayments must exceed your rental income) - and deduct the cost of that loan (interest, fees) from your income tax. But margin lending on shares is incredibly risky. It's not something I can recommend unless you are really confident in your share trading abilities, and in your ability to assess the strength of a company. It's not something I currently do, for example.
To try and explain it in simple terms for you. A fully franked dividend is when you get a tax credit (franking credit) for the tax the company has already paid (imputation system). The company tax rate in Australia is 30%. If you held a share in a company that pays dividends of $1 that is 100% franked to work out the franking component you multiply x3 then divide by 7 which gives you $0.4286. The franking credit is added to your income however the franking amount is also used as a tax offset. So in this example income is $1.4286 and the offset is $0.4286. Where fully franked shares work best is if you have income under $18,200 or have a superannuation pension in pension mode meaning the fund is tax free and 100% of the franking credit is returned to you giving you a higher yield than someone who pays tax with fully franked dividends.
In a worked example;
Investment $10,000
Fully franked dividend income $ 750
Franking Credit $ 321.43
Included in taxable income $ 1,071.43
Tax Payable at 39% $ 417.86
Less franking credit offset $ 321.43
Tax Payable $ 96.43
After tax income $ 653.57 ($750 dividend income minus $96.43 tax payable)
It's easy to work out that if you are in a lower tax bracket you will pay less tax and receive a higher after tax income figure. If you had no franking credit than the after tax income in the above would be $457.50 ($750 X 39% = $292.50) ($750 - $292.50 = $457.50) so you can see the benefits of fully franked dividends in the above example would give you $196.07 more income. ($653.57 - $196.07).
I haven't worked it out that far but I get it,… the franking credit is the tax portion associated with the share, what would ordinarily have to be paid at the 30% tax of the share,.. by passing it on to me, I should be able to pay less tax than then 30% there by keeping some of the franking credit tax as my own worth rather than passing it on to the ATO in full.. im skimming some of the bottom of it.
cheers
Why do you want to buy now then if you have the below view? this is an extract of your post.
But things are A LOT different now, Hardly anyone can make money, property prices will only stall if not fall for the next 3-5 years, perhaps in line with inflation. The FHOG being yanked really did put down ward pressure on the market, and it really is a buyers’ market now, so if you can find a good place its def a good time to buy, just don’t expect crazy capital gains growth".
Because I’m not chasing huge profits, neg gearing and tax breaks was my main thing, I’m more than happy with reasonable 5% growth. And I want to do it the right way, it will still make me money, not as much as before, but still be a good investment, in 25 years I should have an apartment worth a million paid of by someone else, why wouldn't I? that's what im in it for. After 6-7 years it should start being positively geared, and its just a turnkey set it and forget it till I come to collect when I retire.
Also, the other point, was that it’s a buyers’ market,.. I can get the property at a good value to cater for the stagnation in the long run. Its undervalued imo, still decent bargains to be found, but over all they will stagnate.
Not attacking you here but it seems you are looking for commentary/feedback around what you are looking to do.
So your view is the property market will stall if not fall for the next 3-5 years, which I agree for most of Australia except the 30km ring of Sydney, however you still want to buy right away. That implies you are ignoring your own economic views. You also contradict this by saying it's a buyer's market. Where are you looking to buy?
I must be the only one that does not realise that neg gearing and tax breaks makes you money and that positive gearing is bad!
Your figures are fairly simply minded as you assume property will only always go up and that you will always have enough surplus income to fund the negatively geared investment and will never be a distressed seller in negative market.
Why don't you put all the figures in a cash flow chart over 25 years to see what it looks like. I would keep rent in a straight line. So basically you have your income then subtract your cost and outflows, which gives your earnings before tax and depreciation. Work out the tax on that then add back depreciation and it should tell you were your at. You can then easily work out when the payback period for the purchase is likely to be and you can also work out if it meets your 5 growth target.
Is that 5% growth target an all up return or annualised?
Yes, houses won’t be going up or down much, which is why I’m leaning toward an apartment with its good rental income. That way I get to buy in a buyers’ market BUT avoid the issue of low capital gains with houses as apartments give LOWER gains in general anyways. If I were to buy a house and look for capital gains it would be next to impossible to buy and get a good deal on, rent wouldn't be as nice either. I’m hoping that in this market I can beat the price down even future of undervalued property.
Overall average is decline or steady for prices,.. But within that average some go up some go down more so,.. that why averages aren’t a good indicator. You want the MODE MEDIUM MEAN of range to work out the true value of something. For example 10 houses sell for 1million each, 10 houses sell for $1, that dosnt mean your house is worth $500,000, that’s the problem with averages. With Mean mode, you take the most occurring range and throw away the out lays, and then work out the average with in that to get a true indicator. What its really saying IMO, there is large(r) decline in property value across most of the board, but there is some decent value in the minority which is propping up what the average would have been had they not appreciated in value.
yes positively gearing is great, but I really know it wont happen, so the next best thing is this. In a normal market, yes id go for a house for capital gains over an apartment, but where on the bear end of the market.
Iv just finished paying off a 5 years loan, repayment of around $1200 to 1500 a month, so I do have the cash free to make up the short fall… I was also saving 2-3k while doing this anyways.. so cash flow isn't a massive issue. Like I said I have a house paid, so no mortgage to speak of, and im more yuppie than bogan as I like to buy finer things in life. I also have about 100k in super which I can look to play around with…
in the future 5-10 years, ill def want to get another house for its capital growth rather than an apartment.
Speak to a Financial Advisor & an Accountant. There are so many variables you are not considering.
Source: work in an independent Financial planning & Accountancy firm.
Accountants aren't legally allowed to advise on strategy, financial planners aren't legally allowed to advice on speccific tax (can on general tax estimates).
Never speak to a bank financial planner. i really hope you don't do this on your own, i'm almost cringin over some of the above ocmments :(
If the adviser is registered tax (financial) adviser they can.
try emu farms
I wona smother you with my dictionary.
Signed up to say
Buy it and worry about it later, as long as its not off the plan
Cheers
Such a troll…
off the plan would only be interesting for its stamp duty concessions i get form the state government and federal. other wise if i buy something for 400k id imagine its true value is 300k
and thanks for signing up just for that, more useful than half the people here, inc the on that only posted to insult you,,, sigh….
iv been tossing up getting a house instead.
negatives.
1. more depreciation and more money needed for upkeep.
2. tenants can damage the house alot easier and more of it.
3. prices could fall even further than my buy price and im left holding the bag..
I doubt interest rates will stay at 5%. More like an average of about ~6.5% over the next 10 years. I can't see major capital gains, especially in a unit. I have been reading 60% of the off the plan units will lose money by the time it is built, due to over supply by end of 2016.
I dunno if my thinking is correct, but I always thought to not lose money on property CG > Interest + Fees - Rent - Depreciation -Gearing. So for a property netting 3.5% from rent after fees, and your mortgage is at 5%. You need capital gain of 1.5% + enough to cover your CGT. This is quite easy to achieve in the current climate. As interest rates rise you need a larger capital gain to just break even. Only problem is when interest rates rise, house prices increases slow down.
Ideally you want to hold on to it until the next boom. You only realise your gains and losses after you sell.
Opportunity costs are another matter to think about.
op costs are another thing, but its not my money, its a loan… i would have zero opp costs and then there's the risk.
i do agree with you thought, you only get the money once you sell and i have to hold and sell in a boom, if i ever do want to. Were basically close to the bust in the market atm, so it is a decent time to buy,… if i can ill try fix rates for 5 years… at say 4.8% if i can find that id be happy. haven't looked around just yet it great detail. There is talk about more cuts not, and it wouldnt be crazy if they were cut by 50 bases points just to give the economy that kick up the pants it needs and fill consumers with a bit of confidence. It would however be bad for the aust dollar so not sure about the overall effect long term.
but by the time the 5 years comes, then the rents should have also gone up to cover or at least cushion that, so might still be positively geared.
Don't bet on rents going up. If you have a primary property with a mortgage, you don't want the investment to be positively geared. You want to repay as much of the primary and claim negative gearing on the investment. Ultimately you want it to be generating income(positively geared). I would stay clear of those managed apartments that guarantee rent. Like buying part of a hotel and gifting it to the hotel management. Very little capital gain and return.
ppr is paid off……. but yes, if it wasnt id want to paid it off and have the iP neg geared.
wona…
@T1000 Fantastic for looking into any investment. A true investor does a great deal of research and even posting in a forum like this will reveal a wide range of responses and beliefs. We live in an economic society where we are rewarded financially for acquiring the right assets that also produce cashflow income.
I signed up today because a good friend of mine is on this site a lot, saw your post and all of the comments thought it would be worth while for me to add my comments in. I work for a company that has been in business for nearly 20 years and has created over 800 millionaires in that time with the most efficient ways of creating wealth, reducing tax and importantly reducing debt.
You are absolutely right in talking to the financial specialists and the best way to do that is to talk to these specialists all at the same time. What I find is that many people are torn when it comes to investments because they have to talk to all of the these specialists at different times and are still faced with the dilemma of making a decision - shares or property, then which shares or where do you find the right property. My team are all of the specialists who work compliantly together to help our clients achieve the best outcomes.
I use investment properties as part of my core strategy because:
* Generally high demand in the right areas - people have to live somewhere
* You can borrow 80% - 100%+ in some cases against the value of the property - interest rates are at a great level to really tuck into debt reduction
* The right property should have capital growth over long term
* Tenants are helping pay for the cost of the investment
* Tax benefits can be significant with the right investment property
* With interest rates where they are at the moment it is possible that you still get tax deductions and still end up with a cashflow positive property!
Guaranteed rents: I stay away from these as in many cases the people selling you the property will have built the guaranteed rent into the purchase price which means you are effectively pre-paying the rental guarantee yourself.
Debt reduction plan: Some investors I have seen who have purchased an investment property have not had a debt reduction plan in place. This means that if the capital growth is no there, there is still no equity in the investment and if it is used as a tax break, it is still costing you money out of your pocket. It is vital that all debts are being worked - ideally all "personal debt" first - ie home mortgage, personal loans, credit cards.
Absolutely all investments need to be diversified as time goes on - we engage the right conversations with highly qualified financial planners to discuss shares, managed funds, insurances, SMSF, superannuation and even one of my clients wanted to invest in whiskey barrels!
If you are interested, I normally complete a Financial Wealth Check with my clients for $220, but would be happy to offer this to you for free and at no obligation to take up any services. My clients like this because they gain a clear picture about their finances and where they want to be financially into the future. Then we can work out the best way to get there :-)
Have an awesome day!
anyways, iv got some news on this place, its not as nice as i thought…. lets consider this
another apartment in the complex, 310k they want. rent $400 (and i need to take out management fees, stamp & mail, advertising) i really end up getting $1500 out of the $1733 or what ever.
then i have to pay all the out going and strata, at 5.5k…. that leaves me with about $1k income and or $12,000 per year.
The mortgage would be $1,904. or ~23,000, meaning im gona have to make up the difference of about 11,000 pa…
5.5% @ 25years on 310k .. iv changed the numbers form 5% @ 30 years to give me more perspective, not just best case.
so really im gona have to be paying 11k,.. i would get the tax back of 37.5 in the dollar so about 7k its costing me to have this place,…. over the 25 years,.. 7 (average 4k) = 100k to have a 500k apartment in that time, not bad, just not as good as i thought…..
Hmm depends on how you look at it.
You are looking at a total purchase price of around 320k as you will need to pay stamp duty unless it is a new appt which hasn't been built yet.
Your annual yield is: ~3.75% (using your annual rent to be $12,000 and purchase price is $310,000 + $1000 stamp duty)
Note you are actually making a loss in terms of interest rates, as your interest paid to the bank will exceed the income you get from the property. You have to bet on the capital gains to give you the difference that you loss to the bank.
Also think about the following:
Apartments: capital gains is a lot lower, their prices increase a lot slower than any other property types. Therefore you may turn into making a loss over the long term as once the Interest rate goes up above your annual yield you are losing money.
Houses: Their annual yield is similar but costs more, however they often increase in price faster which means you get that buffer due to the increase in property prices.
Commercial: Their annual yield is generally higher, but costs more than houses in comparison. However their capital gain is between Houses and Apartments. However you are pretty much guaranteed long term rents (5-10yrs at a time). Their maintenance costs are reasonably low compared to a house. On going ownership costs is cheap too, as pretty much all fees including strata/owners corp is paid by the tenant.
You really need to determine which area do you want to start your portfolio with. Work out how much money you have, then work out what you can afford which will best maximize your gains over time.
Please seek professional help - I've read this post a few times, biting my tongue each time I read it - but each time I read it I also get slightly more worried for you (and I'm an advocate of real estate investment).
why bit you tongue? either talk or seek a doctor……..
Everyone has an opinion, me, you, the next guy to comment - who is right? Perhaps none of us? I always think that only those who are trained in providing this kind of advice OR those who have succeeded in amassing 4-5-10 properties (in SA) should be confident enough to vent lengthy opinions here to an impressionable newbie investor like yourself.
You want an opinion on the best Eneloop deal or the best deal on a LED torch, this is the place - most other opinions, I don't think this is the place to be.
In short I believe you are getting advice from (some people) who clearly have limited idea and you seem to be taking it onboard, ie your view is being shaped by the wrong opinions - this is like going down to the local pub next to the Holden factory at Elizabeth and asking a bunch of random factory workers, office clerks, students with good ideas and no experience etc for advice on investing in Apartments in Adelaide - even though everyone has an opinion, there is probably 1:50 guys who actually owns one and 1:100 that owns more than 1 etc etc - tough gig finding the right person to listen to. I don't know you I feel kind of sorry for you (refer the post a week or so ago about the poor guy who lost everything).
I get shudders everytime someone mentions commercial real estate to a newbie, excites people about capital gain, negative gearing, buyers agent, dha etc etc - It is all very cool stuff, but requires an indepth understanding of the pro's and con's of each - and how the mix of determining these elements fits in with you personally and financially.
I've worked in developer property sales role (Management) for 18 years, live in SA, own a bit of property (inc an Apartment, small commercial, resi houses, dev site, strata units etc - I'd still rate myself as someone not appropriately versed to provide someone like you advice, so I'd suggest anyone who packs a smaller rap sheet than me is certainly also the wrong person to take advice from.
I'm not really just interested in WHAT people say as much as WHY they are saying it. That will lead me to being able to weigh up the advise and see if I do take it on board. My views have changed a little, in that apartments might not be the best option, but that doesn't make it wrong either does it? it's not like im taking on board every bit of advice….
As for commercial real-estate i already know that tenancy rates are lowest they have ever been and you need alot more money to get involved with alot more risk, so im not even going to be remotely interested in that area.
The thing is , alot of people are saying iv got lots to learn, but not really giving any tips or hints along the way expect very general nonsense like reads some books and stuff. I don't want to wait 5-10 years to be adequately versed in every minute aspect of investing,. just by buying tomorrow will see me get benefits , then lions share at least,.. the other smaller bits they can come along the way and would take a life time to master in any case,, but by an far just looking at reducing my tax this would be a good thing, and unless i make a terrible terrible decision with property first up, i dont see me losing too much money along the way. Investing in property is a decent move after all, even now, when your using someone elses money to buy and someone else is paying it off for you, Im just making up the difference at a tax deducted way to boot.
that's what i don't get, i mean if i was talking to someone who was a green newbie in my field, id know exactly the top 5 things or top 10 things to do and not to do,.. but on here it seems like pulling teeth, those that dono what they are talking about giving wrong advise and those that do seldom wanting to give any.
I might try somersoft forums but that seems more like a place for spruikers to paint the purely exaggerated positive picture by people who think we are still living in the early 2000's boom era and would put a Hitler youth rally to shame.
T1000 - I think you have a lot to learn. I think you need to get some good advice but I would also start off by reading some books on the subject. I have been Reading a couple by Michael Yardney - how to build a property portfolio in your spare time or Rules of property. At the very least they will give you and understanding of the basics and positives and negatives of investing.
you sound like you are in a good position to invest, but I don't think you really have any understanding of what you are talking about.
I think I am going to use a buyers agent to source me a couple of investment properties because whilst I am an accountant and can easily understand the figures, if I am being honest with myself I really don't know what to buy.
Hello all, I've come a bit late to this thread but it's interesting how often people here are saying 'see a financial adviser'. It's not that easy to find a good one and it's pretty expensive.
I've been working on this exact problem with a startup, called FinancialAsk, where you can get text based financial questions answered for free and find a financial planner. The site is at http://www.FinancialAsk.com.au
Happy to receive any feedback on the concept, hope it helps!
Here's something you are not usually told when you buy an investment property:
The annual depreciation which you claim as a tax deduction (both for the building and the fittings) is ADDED to your capital gains tax assessment years later when you sell!! So, if over 10 years you claim, say, $50K in deprection and you sell the property for $100K more than you paid for it, then your CGT is $150K, not just $100K.
Property spruikers will not tell you this; they will emphasise how wonderful the depreaciation is as a tax deduction.
Tread carefully
wow.. no off the plan property agents is willing to disclose that to their clients!
hmm so (i think) the best scenario is: buy new property, live in for 6 months, then rent out.
before 6 years, sell - you dont have to pay CGT, whilst enjoying huge depreciation (due to new built).
this is ofcourse assuming price increase
@c0balt:
good advise, actually a mate of a mate owns one in the other building, the one thats not as nice, but prices stil are the same.