One of the first things I look at on my selection criteria list, as well as what you mentioned.
Then check local comparables for similar properties.
Artifically increasing the rent
- Thread starter georgie1
- Start date
Then check local comparables for similar properties.
on seconded reading, I interpret the op's thought patterns as this:
"hmmm property always goes up at X% pa regardless of location, demographics etc. Therefore I should buy the most expensive property I can afford as this will result in the largest capital gains."
Que GFC ...
"my property isn't returning me any capital gains like those other greedy property investors and its far from neutrally geared. I've had this property for a few years now, its costing me a lot, I should get out now and I'll make a small gain. If only I could get an extra $30 - $50K, that way I could tell my mates that I made a profit".
"even though when I add back in all my holding costs, stamp duty and real estate fees I won't really have made a profit, but my mates wont know any better when I tell them I sold it for a $100K profit..."
"hmmm property always goes up at X% pa regardless of location, demographics etc. Therefore I should buy the most expensive property I can afford as this will result in the largest capital gains."
Que GFC ...
"my property isn't returning me any capital gains like those other greedy property investors and its far from neutrally geared. I've had this property for a few years now, its costing me a lot, I should get out now and I'll make a small gain. If only I could get an extra $30 - $50K, that way I could tell my mates that I made a profit".
"even though when I add back in all my holding costs, stamp duty and real estate fees I won't really have made a profit, but my mates wont know any better when I tell them I sold it for a $100K profit..."
These are eyebrow raising comments to me. You are using some generalised, inaccurate & dare I say irrelevant assumptions to support your approach. Two separate issues.
I guess you need to expect that in a public forum, you will have diverging views on your tactics. I make no judgement personally about what you are trying to do, I just suspect as per my earlier response, that to find the buyer you are after may take some time and there may be other approaches to get you a similar net result. Although the comments of your lawyer are illuminating.
Is there another financial reason you are looking to extract an additional $30-50k as you mentioned? Does the sale only work for you if you get this extra amount?
The other aspect to this, is if you do sell for the extra amount, will the valuation from the buyer's bank, be able to be supported? This may not be a high possibility, but it is possible.
Only one way to find if it's legal give the "ATO" a call and see what they think..
.all circular arguments end back where they started...http://www.ato.gov.au/corporate/content.aspx?menuid=0&doc=/content/00220075.htm&page=12&H12
Only one way to find if it's legal give the "ATO" a call and see what they think..
That doesn't make sense. The ATO enforces tax law. If capital gains is declared correctly, the ATO won't have a problem with it.
Maybe i just read it the wrong way ,but why is it stated that the 2.5k is too keep the tenant quite during the selling process,we all think different Alex
Clearly, since I don't think the ATO is the sole legal authority.
If the increased rent is declared as taxable income, and the increased proceeds declared as income, and the 2.5k 'to keep the tenant quiet' is NOT declared as an expense, then the ATO won't have an issue with it because no tax laws have been broken.
When you look at it from a Accountants mindset then it's pure and simple,i was just looking at it from a different angle,just we both think different..
Bit harsh.
I for one have never tried to push the price up on any properties I've bought; on the contrary; tried to knock the prices down.
But amazingly; I have to keep lowering my asking price to what people will pay on the ones I have sold..
Just to let you know; property investors make up a very small % of total properties sold/bought.
If you want to blame anyone for high prices; blame the cost of building, and all the Govt charges which are attached to real estate transactions.
We built a home last year with pool etc.
Total cost of build was a smidge under $900k including plans and permits, soil tests and all the BS, etc..
The amount of money paid to the Govt in fees and taxes was over $100k
....good onya Marc....those boys leaning on the shovels at the Council will thank you muchly.
They'd be those 4 blokes who are supervisors, watching the guy in the trench having his tea-break?
The 5th guy would be the OH&S guy who is there to make sure they all lean on the shovels using the correct documented Union positions, and that the guy on tea-break is sitting on the documented Union approved ergonomic chair....with built in sunshade and temp control.
It's on Saturday as well; they all got called in because last Monday was a Public Holiday (no-one worked), and the work is piling up, so they're all on double time and a shift-change allowance.
