Property Investment Experts

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Daniela

Hi there
I had a visit from a Property Investment Expert the other day. He got me thinking about investing in a brand new house which I though we could never afford. But once he explained about negative gearing it made more sense.
We already have one rental property that is positively geared and wanting to buy another one that is negatively geared. We don't have any experience in this and I just want to ask a question about how can we do this without having to use third party?
Do you just go and buy a house off the plan and rented out? Who fills the tax sheet? He suggested the best way is to get interest only mortgage and get tax back every week. I want to know if we can do it ourselves to save more money and how do you go about claiming depreciation every week?
I appreciate every answer, I want to find out as much as I can before I see him again on the 28th this month.
Thanks
Daniela
 
Do you have a Website for "Property Investment Expert" ? When a consultant from an Investment company (for example) is trying to sell someone into a brand new house or unit then there's normally some very significant kickback to them from the Developer..

Dig deeper Daniela, there's very likely more going on here than you currently appreciate.
 
Daniela said:
Hi there
I
had a visit from a Property Investment Expert the other day. He got me thinking about investing in a brand new house which I though we could never afford. But once he explained about negative gearing it made more sense.
Click to expand...

The Expert bit has got me worried - these usually cost a lot of money..

We already have one rental property that is positively geared and wanting to buy another one that is negatively geared. We don't have any experience in this and I just want to ask a question about how can we do this without having to use third party?
Click to expand...

Good for you already in the game. Absolutely can be done without a third party and you in control. You have come to the right place - this forum is a wonderful wealth of knowledge and help.

Do you just go and buy a house off the plan and rented out?
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Yep. Almost that simple - not sure about off the plan though - but it can be.

Who fills the tax sheet?
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As in the tax return? You or your accountant. If its depreciation then a quantity surveyor can do this for you.

He suggested the best way is to get interest only mortgage and get tax back every week.
Click to expand...
Yep can be one of the best ways.

I want to know if we can do it ourselves to save more money and how do you go about claiming depreciation every week?

I appreciate every answer, I want to find out as much as I can before I see him again on the 28th this month.
Thanks
Daniela
Click to expand...


Hi Daniela

Welcome to the forum and keep asking questions - as they say the only dumb question is the one that isn't asked. (something like that I'm sure!)

Sunshine
 
Just make sure you get your own independent lawyer and mortgage broker (i.e. don't use the ones they recomment). And independently check the value of the property they suggest (look on the internet for similar properties, call local agents, etc. to see how much the properties are).
Alex
 
Thanks for the answers, I am still a bit confused. What sort of house do I need to buy to be able to do this? Does it have to be new or it can be few years old?
Then not sure if I need to see an accountant immediately to arrange for the tax, how is this part done?
Do I need to see a broker also? Never been to one, what exactly do they do, find the best mortgage and advice you what type to use I guess?
As I said I am pretty new to all this
 
What sort of a house do you need to buy to do what, exactly?

You may want to read a few property investment books before going further with this.
 
A lot of info to digest in one hit!

New properties: beware there are advantages and disadvantages
Off the plan properties: beware there are advantages and disadvantages

Tax: can wait for now. There is an instrument called the ITWV, but this is to assist you, not supposed to be a critical element in the plan.


Broker: how did you get the financing for your IP?

Cheers,

Th Y-man
 
Daniela said:
Thanks for the answers, I am still a bit confused. What sort of house do I need to buy to be able to do this? Does it have to be new or it can be few years old?
Click to expand...

It can be of any age, and any type of property.

All "negative gearing" is where your running costs and interest costs are greater than the rent you receive - i.e. you are losing money! :eek:

The only saving grace you are hoping for (ur, should I say "planning for" through thorough research) is that the property grows in value faster than you are losing money.

i.e. if the property costs you $5,000 a year to hold, you want your property to go up at least $5,000..... and that's about it :)

Cheers,

The Y-man
 
You can negatively gear most properties in Melbourne at the moment. Basically negative geared means that you have borrowed money to buy the property and that the rent does not cover the interest bills or all the other usual exepenses.

That loss can be offset against your salary income and you are able to claim back the tax you paid on that loss. For example if you need to pay $10K out of your pocket per year to hold the property you will be able to claim a refund of the tax paid on the top $10K of your salaried income. The actual % will depend upon what income bracket you are in.

You can also claim a depreciation loss on both the building and many fittings. These can be claimed on old or new buildings but newer buildings tend to have higher claims. Newer buildings are usually more expensive to purchase in the first instance so although you might be able to claim more in depreciation you are probably also paying a higher interest bill on your loan. You need to look at properties on a case by case basis and not limit yourself to new properties.

You can either wait until you do your tax return to claim the tax back or you can claim it each pay day throughout the year.

You don't need to pay an "expert" to arrange this for you. This is a standard arrangement for investment properties running at a loss in Australia.

Out of curiousity why are you wanting to buy a loss generating investment property?
 
It's very hard to find a positively geared property but if we come across one that is suitable for renting out we will definitely buy it.
 
Without meeting this "Expert", I would be very wary that he has a vested interest in the properties he is wanting you to buy. Do your research, & you may find that you will be a lot better off without him. Coming here is a good start. Going to some meetings in your area is another.

The people on the forum tend to be nice, so don't worry if you think you are asking a silly question. We have all been there & done that. If you don't ask the questions you don't find the answers.
 
Property Investment Expert
may be just expert at getting somebody else to invest in borderline/dodgy property.
"I had a visit from a property expert"
If you didnt call them, to come see you, run like hell.
 
select your team

Firstly find a good mortgage broker who understands investment properties many say they do but do not. Get preapproval on finance before you start looking. There is no point looking at something that you cannot afford.

It is important to what out a investing or life plan so you have an idea of what you what to achieve.

Always remember measure twice cut once. Do your research carefully, iof you do not understand something wait until you do.

Most people who make mistakes in investing do fso for 2 reasons they either move to quickly or take bad advice. Both come down to a lack of knowledge.

Take your time if the first is good you will be able to quickly move to the second.
 
Daniela said:
how do you go about claiming depreciation every week?
Click to expand...
G'day Daniela

There is a form from the Tax Office that you can fill in to declare your income for the year, so you work out how much you will earn minus the loss you make from your investment property and the new figure becomes your salary which you pay tax on, so in the end you pay less tax each pay because of the loss you are making on the negatively geared IP.

Hope that makes it a bit clearer.

cheers
quoll
 
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