Strategy Help for young property investor!

Hey Guys,

I?m currently building the foundations of my strategy and would like some advice/suggestions/criticisms.

What are some good strategy pointers for someone who will be on good income in their 20s & 30?s. (e.g. $100-150k p.a. at age 25 & $250-350k p.a. at age 30 and beyond). PS No, I?m not in the mines ? I?m in finance.

I?m planning to focus on land in desirable and scarce areas (e.g. Sydney?s eastern suburbs). The reasons are:
 I can afford the neg. equity
 Low risk
 Aiming purely for CG
 Potential for development, Reno?s, subdivision etc.
 I have project manager/building contacts who I trust

Planning on setting up PTY LTD company purely for investments and it will most likely be the owner of the properties.

I?m 23 at the moment and have a CF Neutral 2 bed unit within 5km of Brisbane CBD (purchased Dec-14). Will most likely purchase another 1 or 2 in Brisbane/Sydney within the next 1-2 years which should give me some good equity buy the time I?m 30 to either sell/leverage for land/house purchases in those desirable areas. From there my property net worth should skyrocket depending on depending on no. of development, purchases etc.

Does this sound like viable strategy?

I want to make the best use of my 2 strong points: 1) High income and 2) multiple properties by mid 20s

Any advice greatly appreciated.
 
Hey Guys,

Planning on setting up PTY LTD company purely for investments and it will most likely be the owner of the properties.

Have you had any formal advice regarding this?

Some form of trust is usually used with property as you may be entitled to CGT discount and in some forms provides more discretion in distributing income. Do you have any children or a partner?

How reliable is your income? Are you on a salary in a field that provides consistent employment? This obviously impacts you ability to borrow and your risk level.
 
Congratulations on making a start on the strategy.

Planning on setting up PTY LTD company purely for investments and it will most likely be the owner of the properties.
Probably needs more thought put into structure.
P/L has no free threshold on land tax & no GCT discounts after 12 months available to it. Possibly not the best asset protection either.

See a good property lawyer and accountant first.
 
Yeah that comment was more a guesstimate on structure... I would defintely be seeking professional advice on trusts & pty ltd company before leaping into anything.

My current IP is in my personal name (borrowed 105% using 20% guaruntee of parents home). Would also need to consider the implications transferring ownership over to a trust later down the track as well.

In terms of salary - i will always have a base of $150k (the remaining comes from bonus paid monthly). My company has a property finance dept. so i have the knowledge of mortgage brokers handy.

Am i right in going gung-ho at CG in blue chip areas? my throughts are alot of investors rely on cash flow and years on years of CG to be in a position able to develop.

My lifestyle isnt excessive by any means - not intersted in fancy cars or round-the-world holidays. My sole goal is to create as much wealth in my 20's and 30's before starting a family and having kids.
 
Transfer of ownership to another entity (trust or company) generally incurs stamp duty and CGT.

If you're not going to buy through your own name, a trust is usually the structure of choice, but make sure you understand how they work, along with the short and long term implications. Personal tax, land tax, asset protection, effect on your strategy to name a few.
 
Congratulations on making a start on the strategy.

Probably needs more thought put into structure.
P/L has no free threshold on land tax & no GCT discounts after 12 months available to it. Possibly not the best asset protection either.

See a good property lawyer and accountant first.

A company has a land tax free threshold in NSW - all states too I think. Very good for asset protection if shares held by a discretionary trust.

(but I am not suggesting this as a structure)
 
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