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22/07/2011 02:17
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22/07/2011 00:25
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22/07/2011 00:21
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21/07/2011 22:22
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21/07/2011 22:18
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19/07/2011 09:55
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MABEREOBE wrote:
19/07/2011 08:59
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boypronenioge wrote:
19/07/2011 08:55
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19/07/2011 03:45
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Soft wrote:
18/07/2011 22:55
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Most people think of bonds or stocks when they think of retirement. They might be paying out of their paychecks each pay period and be relying on those funds when they eventually retire. The better retirement option is property investment. Property investment is sound and reliable.
Let's take a look at the Americans. A 401k plan might seem stable and a great idea because your company is paying a percentage into your plan also. The problems with 401k plans occur when companies decide they want to borrow into the employees' plans. They may find that they are in a deep financial bind and unable to repay the money. Take Wolverine Tube, for example. Wolverine Tube is a nationwide multi-million dollar company that just filed for bankruptcy and closed many of their plants. All of their debts were paid except for the $400 million owed back to the employee pension plan. Imagine if this was your retirement plan and your business filed bankruptcy and didn't want to give you your pension. A property investment portfolio is not something anyone can dip into or borrow against, except you. A property investment is yours to keep and do with as you please until you retire. We need to learn the American lesson and not go in foolishly with our money.
The best way to fund a property investment portfolio is to begin by purchasing land without structures. This way you can slowly build homes on the properties and rent them out as residential or commercial properties. If you are having a hard time building or getting a loan for building, you can find homes that need to be moved for very low prices. Many people who find homes that need to be moved often get lucky if they can get the home for free if they pay for the cost of moving the home.
Rental property investment is a very good idea to build your portfolio. The more rental properties you have, the more money you will begin to make and be able to put into your savings. If there is no penalty for paying off the loans early, it would be a good idea to do that and reduce your debt to income ratio. This way, if you want another loan from the bank, they will not hesitate to give you one. Always be sure at least some of the money you receive monthly is put back into savings for emergency purposes. This will ensure that if a tenant does leave or cause damage, you can afford the repairs and have another tenant into the unit quickly.
Always take into consideration the time it could take to put another tenant into a property. Some landlords have serious problems with tenants taking care of the properties. Be sure you are wise about your tenant choice in your rental property investment. A property investment can make a loss, like stocks.
Property investment can make you a lot of money monthly as time passes. It is better to use property investment as a long-term savings account and sell the property when you are ready to retire. Use the monthly rental payments wisely and after many years, the property will be almost doubled in value.
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Acuttitty wrote:
18/07/2011 22:15
When you possess property investment, your worldly goal will be to make a profit and, yes like everyone else, you will have to pay tax on that, unfortunately. Therefore, wouldn't it be great if we could minimise the tax payments? There are various ways and means to get the best possible tax benefit on your property investment. In Australia, interest on your home loan(s) can be deducted from your income tax. The same is true for stamp duties charged by banks.
Also, the depreciation of your property can be deducted. Depreciation does not mean that the value of your house, as such, is decreasing. It simple means everything in the house goes down in value due to the use of it. Think of geysers, piping, wiring, taps, kitchens and bathrooms, etc. Over time they will get old and will become worthless and will have to be replaced. Make use of this opportunity.
Even general insurance and landlord liability insurance that relates to the property investment can be subtracted from your income tax. That is not all, maintenance and repairs, costs for a body corporate, garden maintenance, administrative costs and even travel costs (to collect the rent for instance) that relate to your property investment can be deducted as well. Agent fees, contractor hiring and property management fees can all be used to bring down the amount of your payable annual income tax.
Last, but not least, you would be able to deduct negative gearing. Since there is no deadline for claiming negative income it could be to your advantage to claim this in times when you make a lot of profit and so you can maximise your income tax deduction.
All these deductions can make it interesting for you to start property investment. As the landlord you have the duty to keep it in excellent condition, but you do not need to have sleepless nights over it. The positive proceedings that result from property investment will help you, and will provide for your financial needs later in life, like retirement for instance. Share portfolios in volatile markets, as is happening today, do not generate the same income anymore as they did many years ago. It can be said that this may also happen in the property market as well, but it is usually a temporary event and regains quickly again after a market crash has occurred.
In all instances, it is good to contact your accountant or financial adviser about your property investment. They will be able to give you guidance on what to do and when and also advise against what not to do and why not. So check it out for yourself. Find the right location for your property investment, make a list of all possible costs that will come with this investment, calculate how much rental income you could generate and how much you would have to pay the tax man and make use of the opportunities offered to you. You will not regret your property investment and you might even start thinking of investing more.
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MABEREOBE wrote:
18/07/2011 21:47
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boypronenioge wrote:
18/07/2011 21:42
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Astotoargurge wrote:
18/07/2011 20:53
A number of people may tell you that buying a property investment in something that has not yet been built is a risky business. They may point out that there is no guarantee what the final property will look like when it's complete. However, if you do your homework thoroughly and follow some good advice you can cut risks to a minimum and make yourself a tidy profit.
Real estate agents will always advise you that there are three top selection criteria when making a property investment. They are location, location and location. This is just as true when buying property off-the-plan. Whilst you may not know what the final property will look like, you can certainly understand the neighbourhood of where the property is going to be located. A central location is attractive and should be up at the top, or near the top, of your wish list. Being close to amenities, shops, cinemas and having good transport links all score well. The property itself should have a lock up garage, a courtyard or garden and a decent view, which are all key benefits.
When buying property off-the-plan, there are additional factors you need to consider. If you receive a glossy brochure or prospectus promising a fantastic lifestyle, high returns from an investment in an apartment block on the fringes of the city in an unattractive suburb, it is probably best to walk away. If the proposal seems too good to be true, it is probably just that. Units by their nature do not have as much land value as a detached house. Therefore, when considering investing in units, you should look at a location that has strong capital growth potential, for example, in a central location where housing demand is expected to continue to outstrip supply.
It is strongly recommended to look out for growing residential suburbs or areas where planning permission has been granted but are not yet on line. Consider at all times that being close to universities, hospitals or retail parks. Also a zone with good transport links will be attractive for renters and will boost the property investment value over a shorter period of time.
Selecting the best property is essential when making a buying-off-the-plan property investment. Ideal types are properties less than 15kms from the central business district. Small, low-rise developments or boutique-style apartments are ideal. Small town house estates are attractive too. In all cases it is advised to stick to developments of less than 50 units. Being close to amenities and easy access to public transport is important too.
It is important to maximise your property investment returns and this can be achieved by property investment in a development where the plan is 70% of the properties are owner-occupiers. It is important to keep the local competition in the rental market to a minimum; a good balance of owner and renters is advisable.
A real advantage of buying-off-the-plan property investment is that good plans can be achieved with zero upfront investment. You only pay as construction continues toward final completion. In a rising price market, such as Australia's, your property investment can be working for you even before you need to pay out.
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Acuttitty wrote:
18/07/2011 20:51
In today's property market, there are a myriad of options on where to put your money. You can build new units or buy old ones. You can rent ready-made units and sub-let them or you can choose to buy off-the plan investments. All these are wise property investment ideas that can give handsome returns depending on the choices you make. Property choice can be a little tricky when it comes to the issue of property investment. If you decide to go for new or old property, there are implications that must be clearly analysed before sinking money into a project that you are unaware or unsure of.
Buying off-the-plan is not new in the investment circles. It basically means buying property that is going to be built. In this case, there is no physical property to attach value to. Dealers in off-the-plan property investment have sample assets that they use to market the property under construction. Such assets have similar features and facilities as the ones being made available off-the-plan. When venturing into this kind of investment, basic investment rules states that you must be optimistic. Optimism here, however, does not mean sinking funds without reason into the project. Before committing yourself to off-the-plan property investment there are things that you must put to consideration.
Location is the most important factor to consider. Whether you are buying old or new property, location must be the first thing you should look at. It does not make sense buying off-the-plan property in a bad location hoping things will have improved by the time the construction is complete. You must remember that it is possible to have the best features in a property investment but if the location is bad you cannot expect good capital gains from it. Things that you should explore include access roads, sanitation, security and proximity to vital amenities like hospitals, markets and shopping malls. If, for instance, you are purchasing probable residential units for rental, how is the security in the area? How about drainage? If these things are not in good shape, you cannot expect good returns from such property investment.
Market is another factor that dictates the success of buying-off-the-plan property investment. How many other similar units are up for sale in the area? If there is an over-supply of such units around the area, then disposing of yours will be an uphill task. Stiff competition in property investment slows turnover and lowers capital gains. Such a case calls for thorough research before spending. A local agent or property manager should be able to advise you on such issues as the prevailing property rates in the area and the actual potential of making good property sales in the neighbourhood.
Type of property investment compared to the needs of the targeted market is also very important when buying off-the-plan. If, for instance, you are intending to use the investment property as college students' hostels, big residential property would not be practical since students prefer single units. A smart property investor must not ignore any of these factors if they want to make the best of an off-the-plan property investment.
Property investment and stocks are the two main avenues that you can use to obtain total financial security, both during your working years and even in retirement. The question on the lips of investors is which is the best option between the two? This is a debate that has been ongoing for a long time as supporters of either option have their own reasons to justify their views. The truth is that both investment methods have their own advantages as well as disadvantages. Furthermore, the success of either of them is dependent on other factors. All in all property investment remains the most consistent and stable of the two options.
Property investment offers more avenues for generating revenue than stocks. The basic success formula for property investment is maximising on the value of the property. Most of these assets are acquired using loan money. A property owner can either capitalize on the property equity to dispose upon appreciation or may choose to hold on to the assets and make positive cash flow through rental. The proceedings can be used to acquire more assets. Rent can be used to repay the loans and still leave a profit margin for the property owner. Property investment therefore creates a much faster avenue for creating wealth and a chance to get real financial muscle in a short time.
Stocks, on the other hand, are a long- term investment that depends on the prevailing market conditions. Returns from stocks investment is dividends. In most cases dividend payout depends on the performance of the companies that sell the stocks. The frequent fluctuations in the stocks market are the reason why it doesn't make the best investment method. Their advantage is that there is almost no management required on them once you buy. Again, if the firm performs well, you are assured of better returns on investment.
Even though property investment requires full time management through constant renovations, it is a faster generator of income than stocks. Almost all companies pay dividends annually. It therefore means that you can only benefit from your investment in stocks once every year. Property investment guarantees steady monthly income throughout the year if it is managed properly. If you want quick income from stocks, you may need to sell them off.
Inflation can have devastating effects on shares. If runaway inflation hits the economy of a nation, the value of stocks falls drastically. This is the problem that is being experienced in many countries at the moment. Selling off shares at such a time would lead to heavy losses. On the other hand, inflation is a good signal to property investors. When inflation rears its head, the cost of construction materials rises steadily. This leads to rise in home and property values. Property investment owners deciding to sell off their assets at such a moment enjoy attractive profits. All these are just some of the reasons why property investment is much more profitable than stocks. For the best financial advice on how to invest wisely it is good to speak to a trusted financial expert.
Capital gains tax in Australia is applied to any capital gains made from the sale of your property investment made after the 19th August 1985. Liability for capital gains tax will occur if, having completed your tax return for the year, you cannot offset sufficient capital losses against the capital gains you have made. It is important to remember that you are not subject to any capital gains should you sell your residential home. These gains, if any, are not taken into account. You will only be subject to capital gains tax on any property investment you have made to earn you rent and increase in value.
It is important for Australian residents to remember that sales of houses or units that were bought as a property investment abroad will also need to be reported and profits or losses recorded. Capital gains taxes do not apply during your ownership of your property investment, even if the value of the property investment has risen. Capital gains tax will only be applied in the year in which you sold the property and any capital gains or capital losses calculated.
Having understood that any and all houses and units in your property investment portfolio are subject to capital gains tax, you need to understand how much you should expect to pay for capital gains. This is an area where there is a great deal of confusion and doubt. Many people mistakenly believe that capital gains you will need to pay will be at the top marginal tax rate. This is not necessarily true. Consider that the capital gains you have made on your property investment portfolio will be naturally treated as earnings. These earnings will be added to your earnings from work, or other income. Once all of your earnings have been gathered together, will your total earnings be known and then the appropriate tax rate will be applied. Therefore, it is quite possible that your combined income does not reach the top tax rate bracket and in fact you will be graded in the marginal tax rate instead.
Many couples that have decided to build a property investment portfolio decide that the properties they acquire will be held in the name of the lowest income earner. Assuming they choose to be tax assessed separately, this is an intelligent choice. There are also misconceptions about capital losses. A capital loss can only be used to offset capital gains. If your losses exceed the capital gains, do not expect a payment from the Australian Revenue.
When you are completing your tax return and entering in all the details for capital gains or losses, it is extremely important to keep all the documents concerning all of your sales and purchases. Don't forget to include all the details of expenses, legal bills and any costs you incurred during the course of the tax year. It is important that you can provide documentary evidence to support your tax return should there need to be an enquiry. Remember, to be eligible for the 50% deduction on capital gains tax for the property you added to your property investment portfolio, you must have been the owner for a full year or more.
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Astotoargurge wrote:
18/07/2011 18:14
In as much as investment is a brilliant idea to gain financial freedom, gathering the start-up capital is always a big challenge. There are numerous property financing options available but many of them are far out of reach to most middle and low-income earners. So why is Australia a property investment hotspot? The reason is simple. Property investment financing has been taken to the people that need it most. The government has invested heavily in improving the investment environment making the country one of the most investment friendly destinations in the world.
Property investment in Australia is a very profitable undertaking. Demand for rentals in most urban centres around the country is almost insatiable. With a rapidly growing population and millions of job opportunities being created each year, the problem of inadequate housing is set to double in the coming years. This is good tidings for people that are thinking of property investment.
Home loans and mortgages are common ways of financing property investment. Banks, building societies and credit unions all have low cost loans and mortgages that you can take advantage of to obtain new or old property investment. Before embarking on the process of obtaining costly property in Australia, you need to understand a few factors that make Australia one of the best investment locations.
The first is the availability of low cost property investment. The favourable investment environment boosted by a stable government and a booming economy has attracted thousands of overseas investors to set up camp in Australia. For instance, between 2002 and 2003 alone over 50 foreign property development firms were licensed to operate in Australia. This has led to a jostle for the market share leading to emergence of low cost property.
The second reason is stability. Stability here refers to both economic and political. As we speak, the GDP growth of Australia is ranked higher than that of UK, France and even Germany. This in essence means that the risk of property investment in Australia is minimal. This factor has been boosted by low inflation, high exchange rates and a high employment rate.
Next is Foreign Currency Exchange. The dollar and euro exchange rates in Australia are very favourable and steady. This makes it easy for foreign investors that do not want to risk losing money transacting with the local Australian dollar. This factor has also made it easy for immigrants to obtain more buying power in Australia than their mother countries.
All these factors, and more, are just some of the reasons why you stand to gain through property investment in Australia. If you are already a property owner, you have even better chances of using your property investment to obtain finance to acquire more assets. A property expert or a mortgage lender can give guidance if you are not well versed with how you can capitalize on your property equity for financing further investment. Capital gains are also another way of financing new property investment.
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Acuttitty wrote:
18/07/2011 18:12
Property financing is the chief determinant of your property investment aspirations. In the current market where loan products are more than the property on offer, it is a difficult to settle on the best loan option. The large pool of loan options has both advantages and disadvantages that will be analysed here. However, one thing that is true is that acquiring a property investment loan has never been easier. Lenders of such credit are literally begging customer to apply for them. If you have property investment dreams, you can take advantage of this rare opportunity. The biggest question is where do you start?
If you are a novice in property investment it is a wise idea to speak to a mortgage broker before applying for a property loan. Mortgage brokers have years of experience on the types of mortgages that are on offer. They can help you when it comes to sieving through the hundreds of offers that you will be hit with when you show interest. Remember not every mortgage that is on offer can suit your needs. Such an expert understands the mortgage jargon and interest calculation. Every little print in the plan means something and it has its own implications on the loan. An honest mortgage broker will lay all the facts on the table for you to make an informed choice. Remember to put into consideration all your preferences before settling on a property investment financier.
The amount that you want in the form of a loan is another factor that will lead you to the right lender. For instance, if you want a huge sum, which would be the best source? Is it the bank or the credit union? Some lenders have a limit to the amount they can give for property investment. You therefore need to approach a lender that will fully fund your plan.
If your repayment plan is tied to the income from the property investment, the property location and value are factors that must not be ignored. For instance, if you are borrowing for rental units, how much are you expecting in returns from rent? Is it enough to repay the loan? If not, do you have other sources of topping up the earnings?
Every property investor needs to consider the property loan flexibility. What are the lender's policies on repayment adjustments? Supposing you want to vary your loan, what is required? If the rates become favourable during the loan life, do they, for instance, allow mortgage refinancing? Mortgage refinancing allows an investor to take advantage of lower interest rates as they become available
Loan structure also determines the type of financing to choose for property investment. Structure of a property loan refers to the repayment period and schedule. A loan plan like Line Of Credit loans that have no tight repayment schedules are favourable because they allow the borrower to use the mortgage for other uses rather than property investment. For instance, many borrowers are now using equity or home value to acquire other loans or mortgages.
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Astotoargurge wrote:
18/07/2011 16:52
Retirement can be a dreadful time for some workers. Unfortunately, it is inevitable. When such a time comes and you have no steady source of income, life can be miserable. There are many ways of investing to fund your retirement. Early planning is of course essential if you want to have a secure retirement. Stocks are a good option. Investing in stocks helps you to enjoy dividends for as long as you want. There are also numerous retirement schemes that are available. Property investment, however, remains the most viable way of funding your retirement. This is the only sure way of attaining financial stability when you are no longer strong enough to work.
In Australia, property investment for retirement has a number of advantages. The first is tax cuts. In Australia, if you are investing in retirement age you enjoy handsome tax relief. This is why the country is one of the most favoured locations by retirees to live and work. Another advantage is the availability of funding for such property investment. Many lenders accept the same property as collateral for property financing. Renting out such property is an assurance that the property will repay the loan without problems.
Stocks and bonds are profitable but do not guarantee a steady income during your golden years. Many firms pay dividends dependent on the profitability of the company. This means that if the firm makes losses, there are low chances of getting income from the shares. Furthermore, many companies pay out these benefits annually. It is tedious and punishing to wait for such income once every year. Property investment is a quick payer with steady revenue coming in every month.
Property investment in Australia has never been easier. The property market is flourishing with new cheap homes coming up. Interest rates for property investment loans have also fallen considerably. This is why immigrants are flocking to Australia like never before. If you take advantage of these excellent economic conditions, you can retire in peace, knowing that you have a reliable source of income for many more years. A clever way to create wealth, even in retirement, is to buy property even when rates are low and sell off when prices improve.
Another intelligent way of property investment for old age is by obtaining mortgages using your current home equity. Since most Australian lenders accept home equity as security, you can use the same to invest in other income generating properties or homes for sale. Even if you are in the middle of repaying a mortgage, you can use the home equity to acquire another loan for more property investment.
The last and equally valuable tip is to begin investing early. The fact that you are young and strong does not mean you will not grow old and frail. Economic experts say wealth is created over a long time. Little by little, putting in the effort when you are young will ensure you have property that you can rely on for your income when you retire. Property investment is the only option that guarantees financial stability now, and in the years to come.
On the question of choosing a property investment portfolio over investing in stock, the results over the last 10 years for Australian investors will definitely show that a well-selected property investment portfolio was, from all points of view, the best decision. Stock, government bond and mixed mode managed fund portfolios have all taken a battering in the past 4 years. So much so that many investors have closed their investment fund certificates in the bottom drawer of their desk to be re-opened some time in late 2012.
Investing in property in Australia has, according to many experts, been the better option. They can use many arguments to back this statement up. A property investment portfolio has delivered better results than 85% of managed mixed stock and bond funds, according to most Australian investment analysts. Why is this situation prevalent? And what are the criteria they have used?
There are, according to investment analysts, a number of good reasons why building an Australian property investment portfolio is the best option compared to investing in international stocks and shares managed plan. Investing in bricks and mortar is, by nature, a solid plan. Whilst there may be seasonal fluctuations, the facts speak for themselves. Australia has a strong economy, is trading with the rest of the world with a healthy export trading surplus, and has a housing market where demand is outstripping supply. Better still, this situation is not expected to change in the short (1 Year) or medium (5 year) term.
Australia banks a minimum of $1.3 billion dollars a month in trade export surpluses for the commodities it exports to high demand foreign clients. This is resulting in extremely high employment and better salaries for employees. In the past 12 months many young people and couples are looking to buy into property of their own and avoid increasingly high rents. This is a double advantage for you as the property investment portfolio owner. You can either decide to sell your attractive properties to those buyers who are ready to pay the asking price at a good profit, or expand you property investment portfolio to offer new properties at rents that 12 months ago would not have been considered possible.
Those who have invested in stocks and shares will admit that they could never have imagined that huge corporate entities such as Enron, Lehman Brothers and AIG could suddenly go from boom to bust. How would they know? And what could they have done? In the end they lost nearly all of their investment. An Australian property investment is by far a better option. Your property investment will not, in most cases, make spectacular earnings in the short-term. However, over a medium to long-term period you will get excellent sustainable returns. If your reason for property investment in Australia is to provide income for your retirement, this is a smart choice. Should you need cash liquidity at any time you can sell you principal residence, downsize and use the capital gains tax exempt profits to strengthen your property investment portfolio.
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Astotoargurge wrote:
18/07/2011 15:33
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To finance some thing means to supply money to get a task, business venture, or even business. At Safe Property Investing, all of us suggest investing throughout property nationwide as being a good way to make your real-estate stock portfolio. The reason for this is that there are many options for investments throughout rapidly building places in addition to levy bonuses and also stamps responsibility breaks in your investments. But I'll save the actual litany of benefits to Australian property investing for an additional occasion. At this time I wish to assist you to answer the actual question: how would you financing the Australian investment property?
Simply because investment attributes are generally components you acquire with all the goal of hiring or perhaps rental to other people, the fundamental target regarding property investing is usually to gather more than you have to pay out on your property. As an example, the lease owners of the house purchase from you to rent your own property must, throughout rule, go beyond your own mortgage payment around the property eventually. In order to get so much that you create cash on your current [url=http://wealthcreationstrategies.wealthcreationworkshop-au.com]investment property[/url], you may very first should protected a good investment loan. You could possibly take advantage of talking with an economic broker, so that he or she can understand your particular requires along with assist you to find very good achievable mortgage lender. Remember that lenders can exact a new percentage for connecting you, the particular entrepreneur, on the lender as well as mortgage lender.
Normally, mortgage lenders have to have a 10% deposit for that investment mortgage loan or perhaps, alternatively, equity upon another property that you individual. If you own many your own home, by way of example, the actual fairness made from this property can add in the direction of the particular lenders' necessity. There are many selections for the kinds of financial products intended for your own property investment, which includes fixed rate and adjustable rate house loans. No matter which you decide to borrow, you should study whether or not the financial institution will help you shell out beyond your established monthly payments. To put it differently, could it be possible for one to create lump sum obligations in your theory at any given time? Having the ability to do this may possibly enable to you personally to considerably reduce the tariff of your current investment.
Property buyers may want to build "offset" balances, that operate similarly to savings balances. Offset company accounts work in the next method: you might have your revenue (or a percentage of your earnings) transferred into the balance out account after which this kind of funds moves right toward your own home loan payment. Most of all, this takes place just before taxes can be calculated. Your monetary benefit to the balanced out bill, for that reason, is that it provides you with duty cost savings. Prospective problems with the actual balanced out bill are they've far more conditions and terms (my spouse and i.at the., twelve-monthly costs as well as bare minimum harmony demands) as compared to regular bank accounts, consequently make sure to shop around before hand and select the balance out bill that actually works most effective for you.
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Acuttitty wrote:
18/07/2011 15:31
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Astotoargurge wrote:
18/07/2011 14:13
Being able to maximise all of the property investment tax benefits available will make a great difference to being able to return a year on year profit from your property investment portfolio. It will require hard work and time to really understand how the whole system works. It would make good sense to take on a financial specialist to assist you. This would be a particularly good idea if you have a full time job and little time to dedicate to the necessary research and administration to make sure you achieve this goal.
It is important to get organised and understand the five key areas where you can maximise your tax benefits in Australia. Collect all the invoices and details of payments you have made to help your property investment portfolio and gain the best return on your investments.
Depreciation is an important contributor; each year your accountant will advise you of the amount you can depreciate your assets as acceptable by the Australian tax authorities. Depreciation allows you to reduce the value of fixtures and fittings because of wear and tear. Many property investment owners chose to install expensive fixtures and fittings, so that the depreciation amount is greater and this helps them to offset any gains they make on their other positive cash gearing properties. Take note that depreciation does not exactly match real wear and tear. For example, a cooking range from a top supplier can be perfectly operational after 5 years use. However, for the purposes of depreciation, the cost may have been already completely written off. The result will be that you can rent the property out at top rental rates again without having to complete a makeover.
Mortgage interest will probably be your biggest tax-deductible expense. As a landlord, you are perfectly entitled to claim a deduction on all the mortgage interest you are required to pay. Don't forget that stamp duty payments are also completely tax deductible. If you have had the need to take out home improvement loans to maintain you property investment portfolio, remember the interest these loans attract can be added to your tax deductions claim.
As a landlord in Australia, you are required by law to pay landlord's liability insurance for the properties in your property investment portfolio. The good news is that these payments are completely tax deductible. This also applies to employee worker's compensation insurance; so don't forget this important contributor to your tax deductions.
Maintenance and repairs are essential and necessary to maintain your property investment portfolio in good condition. You are able to claim for these costs too, together with land tax fees, gardening and landscaping maintenance and corporate fees. So, remember to gather these together in your tax benefit claim. Don't forget that painting and decorating, as well as the costs for repair of broken windows or a broken water pipe are also eligible.
Should you need to travel to collect rent or go to the properties in your property investment portfolio, you can claim for your travel expenses. Of course you do need to be able to provide evidence to support that your travel was really to attend to your properties. If you can be sure tenants and suppliers you may have visited can confirm you were there, then there should be no problems.
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Acuttitty wrote:
18/07/2011 14:10
Being able to maximise all of the property investment tax benefits available will make a great difference to being able to return a year on year profit from your property investment portfolio. It will require hard work and time to really understand how the whole system works. It would make good sense to take on a financial specialist to assist you. This would be a particularly good idea if you have a full time job and little time to dedicate to the necessary research and administration to make sure you achieve this goal.
It is important to get organised and understand the five key areas where you can maximise your tax benefits in Australia. Collect all the invoices and details of payments you have made to help your property investment portfolio and gain the best return on your investments.
Depreciation is an important contributor; each year your accountant will advise you of the amount you can depreciate your assets as acceptable by the Australian tax authorities. Depreciation allows you to reduce the value of fixtures and fittings because of wear and tear. Many property investment owners chose to install expensive fixtures and fittings, so that the depreciation amount is greater and this helps them to offset any gains they make on their other positive cash gearing properties. Take note that depreciation does not exactly match real wear and tear. For example, a cooking range from a top supplier can be perfectly operational after 5 years use. However, for the purposes of depreciation, the cost may have been already completely written off. The result will be that you can rent the property out at top rental rates again without having to complete a makeover.
Mortgage interest will probably be your biggest tax-deductible expense. As a landlord, you are perfectly entitled to claim a deduction on all the mortgage interest you are required to pay. Don't forget that stamp duty payments are also completely tax deductible. If you have had the need to take out home improvement loans to maintain you property investment portfolio, remember the interest these loans attract can be added to your tax deductions claim.
As a landlord in Australia, you are required by law to pay landlord's liability insurance for the properties in your property investment portfolio. The good news is that these payments are completely tax deductible. This also applies to employee worker's compensation insurance; so don't forget this important contributor to your tax deductions.
Maintenance and repairs are essential and necessary to maintain your property investment portfolio in good condition. You are able to claim for these costs too, together with land tax fees, gardening and landscaping maintenance and corporate fees. So, remember to gather these together in your tax benefit claim. Don't forget that painting and decorating, as well as the costs for repair of broken windows or a broken water pipe are also eligible.
Should you need to travel to collect rent or go to the properties in your property investment portfolio, you can claim for your travel expenses. Of course you do need to be able to provide evidence to support that your travel was really to attend to your properties. If you can be sure tenants and suppliers you may have visited can confirm you were there, then there should be no problems.
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Astotoargurge wrote:
18/07/2011 12:52
Property financing is the chief determinant of your property investment aspirations. In the current market where loan products are more than the property on offer, it is a difficult to settle on the best loan option. The large pool of loan options has both advantages and disadvantages that will be analysed here. However, one thing that is true is that acquiring a property investment loan has never been easier. Lenders of such credit are literally begging customer to apply for them. If you have property investment dreams, you can take advantage of this rare opportunity. The biggest question is where do you start?
If you are a novice in property investment it is a wise idea to speak to a mortgage broker before applying for a property loan. Mortgage brokers have years of experience on the types of mortgages that are on offer. They can help you when it comes to sieving through the hundreds of offers that you will be hit with when you show interest. Remember not every mortgage that is on offer can suit your needs. Such an expert understands the mortgage jargon and interest calculation. Every little print in the plan means something and it has its own implications on the loan. An honest mortgage broker will lay all the facts on the table for you to make an informed choice. Remember to put into consideration all your preferences before settling on a property investment financier.
The amount that you want in the form of a loan is another factor that will lead you to the right lender. For instance, if you want a huge sum, which would be the best source? Is it the bank or the credit union? Some lenders have a limit to the amount they can give for property investment. You therefore need to approach a lender that will fully fund your plan.
If your repayment plan is tied to the income from the property investment, the property location and value are factors that must not be ignored. For instance, if you are borrowing for rental units, how much are you expecting in returns from rent? Is it enough to repay the loan? If not, do you have other sources of topping up the earnings?
Every property investor needs to consider the property loan flexibility. What are the lender's policies on repayment adjustments? Supposing you want to vary your loan, what is required? If the rates become favourable during the loan life, do they, for instance, allow mortgage refinancing? Mortgage refinancing allows an investor to take advantage of lower interest rates as they become available
Loan structure also determines the type of financing to choose for property investment. Structure of a property loan refers to the repayment period and schedule. A loan plan like Line Of Credit loans that have no tight repayment schedules are favourable because they allow the borrower to use the mortgage for other uses rather than property investment. For instance, many borrowers are now using equity or home value to acquire other loans or mortgages.
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Acuttitty wrote:
18/07/2011 12:50
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Astotoargurge wrote:
18/07/2011 11:31
If you are thinking of investments for future financial security, stocks or property investment are both possible routes to take. The question is, which of the two is the better idea? The answer may not be forthright as it depends on which angle you view the two ideas from. Success or failure of both methods is dependent on many other factors. What is important though, is to look at the current economic status and rate which of the two is performing better. In that case, the answer is straightforward; property investment is the better option. Stocks are good if the market is stable and the company that you bought the shares from remains afloat and profitable. However, with the recent turbulence in the world economy the future of the share market looks bleak.
The uncertainty in share prices, liquidation of companies and sustained losses have made stocks investment one risky avenue to trend. Property market is not like that. In Australia property investment is the safest way to go, as the market is currently very stable. Homes are affordable and investors are making attractive capital gains as a result of favourable prices. The problems that have dogged the stocks market are hardly being felt in the property sector.
Unlike shares, property investment is not easily affected by a changing political situation. This is clearly evident in the Australian property market, as it has remained steady even though stocks waver with the changing political environment overseas. The stable government and a flourishing economy have given investors plenty of confidence to invest in the country. Job creation has also had a direct effect on the profitability of the property investment. Influx of immigrants and a growing working class has increased threefold the demand for houses.
Property investment has much higher cash flow than stocks. Monthly revenue from rent is definitely more helpful than waiting for annual dividends. Property assets also appreciate in value much faster than stocks. If, for instance, you decide to buy an undervalued property and carry out renovations, you could dispose it soon after at a much high value. This may take a month or less depending on the demand for the property and the work required.
Property investment allows leveraging. This means that you can acquire a multimillion-dollar property with just a fraction of the value of the asset. The property investment will pay for itself in another couple of months without having to borrow again. Ownership of such property has multiple benefits. Renting out to make some monthly revenue is just one of them. Equity or asset value can be capitalized to obtain a mortgage for other forms of investment. The same property can be used as security for credit. The investor can also decide to market the property with an aim of disposing it at a better value than the buying cost. The earnings can be used to clear the loan and the difference used to invest in something else. Stocks do not offer such opportunities. The only way you can benefit from them is waiting for the dividends or selling them off on a working day if you want instant cash.
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Acuttitty wrote:
18/07/2011 11:28
Negative gearing occurs when the mortgage payment and maintenance cost for a property investment outweigh the overall income from the property. In short, the property investment is running, or at least seems to be running, at a cash loss. So, if you are a potential investor, would you buy such property? The answer is a big "No!" So then, why do experienced investors go ahead and buy such property investments? This article looks at the facts behind negative gearing. In the end the decision on whether negative gearing makes sense or not is absolutely your call.
The Australian government has a very elaborate policy on property investment. This policy encompasses things like tax, importation, work permits, immigration issues and property ownership. All these are separate legislations that are aimed at encouraging the population as well as potential overseas investors to come and invest in the country. The laws relating to negative gearing provide for tax deduction on property investment that is making losses. This is as a way of reducing the burden on investors, which would have a counter effect on the government investment efforts. This way the government helps citizens in the task of housing provision without having to cough up more money.
So, what is the reason behind the rush for loss making property investment? Australia boasts a very vibrant property market. When recently the rest of the world was grappling with the effects of economic recession, the housing sector in Australia was on positive growth. This is an indicator of how lucrative the property market is in the country. A flourishing economy and sound property investment policies have made the country a hot spot for both local and international property investors. A vibrant economy has a direct effect on job creation. This has led to a huge demand for housing. This, in simple terms, means that whatever kind or property investment you have, you are sure of capital gains from it.
When you acquire the property, the initial cost of repairs and maintenance may be quite high, resulting in a loss. Painting, plumber works and lighting are some of the repairs that may eat up most of the income from the property investment during the first years. However, these are not recurrent. With time, these expenditures eventually subside. This leaves the property owner with only the mortgage to take care of.
Property investors that purchase such property do so with the hope that they will return to profit making soon. Indeed, such property investment returns to making profit after some years. At that time the owner can dispose of them, making millions of money in the deal. This is because the investors sell them off at a much higher value than they obtained them.
This is how wise investors have turned negative geared property into cash machines in just a few years. The secret is simple. These investors have learned how to take advantage of the government provided tax relief for negative geared property. At first it may look like an unprofitable idea to invest in such properties, but the brave and optimistic investor always has the last laugh!
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Astotoargurge wrote:
18/07/2011 10:08
If you are thinking of investments for future financial security, stocks or property investment are both possible routes to take. The question is, which of the two is the better idea? The answer may not be forthright as it depends on which angle you view the two ideas from. Success or failure of both methods is dependent on many other factors. What is important though, is to look at the current economic status and rate which of the two is performing better. In that case, the answer is straightforward; property investment is the better option. Stocks are good if the market is stable and the company that you bought the shares from remains afloat and profitable. However, with the recent turbulence in the world economy the future of the share market looks bleak.
The uncertainty in share prices, liquidation of companies and sustained losses have made stocks investment one risky avenue to trend. Property market is not like that. In Australia property investment is the safest way to go, as the market is currently very stable. Homes are affordable and investors are making attractive capital gains as a result of favourable prices. The problems that have dogged the stocks market are hardly being felt in the property sector.
Unlike shares, property investment is not easily affected by a changing political situation. This is clearly evident in the Australian property market, as it has remained steady even though stocks waver with the changing political environment overseas. The stable government and a flourishing economy have given investors plenty of confidence to invest in the country. Job creation has also had a direct effect on the profitability of the property investment. Influx of immigrants and a growing working class has increased threefold the demand for houses.
Property investment has much higher cash flow than stocks. Monthly revenue from rent is definitely more helpful than waiting for annual dividends. Property assets also appreciate in value much faster than stocks. If, for instance, you decide to buy an undervalued property and carry out renovations, you could dispose it soon after at a much high value. This may take a month or less depending on the demand for the property and the work required.
Property investment allows leveraging. This means that you can acquire a multimillion-dollar property with just a fraction of the value of the asset. The property investment will pay for itself in another couple of months without having to borrow again. Ownership of such property has multiple benefits. Renting out to make some monthly revenue is just one of them. Equity or asset value can be capitalized to obtain a mortgage for other forms of investment. The same property can be used as security for credit. The investor can also decide to market the property with an aim of disposing it at a better value than the buying cost. The earnings can be used to clear the loan and the difference used to invest in something else. Stocks do not offer such opportunities. The only way you can benefit from them is waiting for the dividends or selling them off on a working day if you want instant cash.
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Acuttitty wrote:
18/07/2011 10:05
Hi, I'm Jack Wilson from [url=http://propertyinvestment.propertyinvestmentstrategy-au.com]Investing For Beginners[/url]. The most salient questions that come up when you are considering property investing are those that are about money: "How much can my investment property make?" "How much will it cost?" and perhaps most importantly, "How will I finance my investment property?"
To finance something means to provide funding for a project, business venture, or enterprise. Here at Safe Property Investing, we recommend investing in property in Australia as a fantastic way to build your real estate portfolio. The reason for this is that there are many possibilities for investments in rapidly developing areas as well as tax incentives and stamp duty deductions on your investments. But I'll save the litany of benefits to Australian property investing for another time. Right now I want to help you answer the question: how will you finance your Australian investment property?
Because investment properties are properties you purchase with the intention of renting or leasing to other people, the fundamental goal of property investing is to collect more than you pay out on your property. For example, the rent tenants pay you to lease your property should, in principle, exceed your mortgage payment on the property in the long term. In order to get to the point where you are making money on your [url=http://newsouthwales.propertyinvestmentseminar-au.com]investment property[/url], you will first need to secure an investment loan. You might benefit from talking with a financial broker, so that he or she can understand your particular needs and help you to find the best possible mortgage lender. Keep in mind that mortgage brokers will exact a commission for connecting you, the investor, to the bank or mortgage lender.
Generally, mortgage lenders require a 10% down payment for the investment loan or, alternatively, equity on another property that you own. If you own the majority of your own home, for example, the equity generated by this property can contribute toward the lenders' requirement. There are many options for the types of loans available for your property investment, including fixed rate and variable rate mortgages. No matter which you decide to borrow, it is important to research whether the lender will allow you to pay beyond your predetermined monthly payments. In other words, will it be possible for you to make lump sum payments on your principle at any given time? Being able to do so may allow to you to significantly reduce the cost of your overall investment.
Property investors may choose to set up "offset" accounts, which function similarly to savings accounts. Offset accounts work in the following way: you have your income (or a percentage of your income) deposited directly into the offset account and then this money goes directly toward your home loan payment. Most importantly, this occurs before tax is calculated. The financial benefit to an offset account, therefore, is that it provides you with tax savings. Potential downsides to the offset account are that they have more stipulations (i.e., annual fees and minimum balance requirements) than regular bank accounts, so be sure to do your research ahead of time and choose the offset account that works best for you.
Remember that doing work on the front end-researching mortgage options and talking with a number of finance brokers and mortgage lenders-will lead you to ultimate financial freedom and flexibility through your Australian property investment. [url=http://wealthcreationseminar.propertyinvestmentseminar-au.com]Jack Wilson[/url] from Safe Property Investing is an expert in Australian investment property.
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Astotoargurge wrote:
18/07/2011 08:46
Property investment and making good returns on investment are two different things. This in essence means that you can make huge investments but fail to make anything sensible in terms of returns from them. Maintaining a positive cash flow from your property is important in order to realize the value of the investment. Otherwise growth in the investment will never be realized. Positive cash flow occurs when the property investment is comfortably able to maintain itself in terms of mortgage repayment, repairs and maintenance and leave a margin for the investor, which is termed as profit, after all expenses have been deducted.
Gains from property investment can happen through various ways. They can come through rent, business or even their sale. A property investment can have a positive cash flow but if expenditure is not checked, all the cash can melt away without awareness. It is therefore important that expenses be minimized as much as possible if you want to maintain a steady positive cash flow from your property investment. It is not easy, but with discipline it is possible. Failure to observe discipline in spending can lead to bankruptcy and other nasty financial consequences. The following are simple techniques that you can use to seal money wastage loopholes in a property investment in order to sustain positive cash flow.
Take advantage of tax deductibles
Taxes are one major expense that can eat up almost the entire earnings from your property investment. If there is an avenue for tax relief, take it at once. The Australian government has a number of tax benefits for property owners that you can use to maximise earnings from your property investment. Some of these include depreciation, insurance and negative gearing for the loss making investments.
Cut spending
Unplanned and extravagance in buying is a great money waster. When you go to buy property related items like accessories and fittings, stick to the budget. Look for low cost items but which are of a good quality to avoid spending on the same item again in the near future. If there is an opportunity to use old items in place of new ones, take advantage and save the few coins that would have been spent. In short, you must spend less than you are getting from your investment in order to sustain a positive cash flow.
Agreements and contracts
Be careful when you are getting into contracts. These include maintenance contracts or hire purchase agreements. Buying through instalments is expensive. If you can buy such items in cash then avoid credit buying. Long-term maintenance contracts are also costly. If you feel that such a contract doesn't make much sense, avoid it. If repair works are needed and are something you can do, why pay someone else to do it?
Maintenance
Your property investment must be in top shape to attract business. For instance, you must maintain good security, cleanliness and paint regularly to attract tenants to your rentals. People are motivated to pay more where they are getting the real value for their hard earned money.
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Acuttitty wrote:
18/07/2011 08:44
The issue of retirement funding has posed a major dilemma for Australians with the Government failing in its attempt at providing self funded retirement with the Superannuation Guarantee Contributions (SGC) introduced in 1992. The SGC was introduced with the goal of moving away from the traditional old aged pension to a more revolutionary self funding plan. But research has indicated that at the current levels, the SGC will in no way be able to provide Australians the required adequate income after retirement. The combined effect of a high level of rise among the number of retirees, a tendency towards longevity, and complex amendments targeting the SGC along with one's superannuation attracting the four levels of taxation has dramatically indicated that Australians should search immediately for other avenues of funding their retirements.
It is very confusing to decide upon a good way for funding retirement. A stock portfolio is a popular choice but with the volatile economy, such a choice borders on dangerous grounds. As also do investing in retirement funds. The ideal form of retirement funding lies in property investment. This entails a solid investment with potential to earn huge returns. In today's highly unpredictable and capricious market, any vehicle other than property investment will prove hazardous. Property investment appears to be the best viable option for retirement funding.
There are myriad advantages for choosing property investment as a vehicle for retirement funding. The primary advantage for property investment being that it attracts tax benefits. Secondly, property investment pays for itself because you can rent out the invested property and earn rentals which can easily help to recuperate the cost as well as maintenance expenses of the property investment. Traditionally, investment is always linked with risks, but now seems the most attractive time for property investment which will aid in your retirement funding.
The most alluring and smart aspect about property investment is the utility component of this investment. Whereas stocks and bonds will not give you any continuous value, property investment will generate a regular income by way of rentals and help you to offset expenses. It is absolutely essential that the golden years of your retirement should be free from stress and money worries. This property investment when rented properly will provide a steady income and will pay for itself while being a solid and tangible investment. Hence, property investment proves to be a worthwhile investment proposal to be diligently acted upon.
The present market climate has brought about a splurge in property investment in Australia. What more with falling prices and low interest rates being offered; property investment is the best avenue for retirement funding as on date. The prices of homes have dropped in Australia and have opened up opportunities for property investment which may not be available later on. You can feel at peace since your retirement funding is catered to and you are aware that your assets are tangible. This feeling of security gives you the free feeling to enjoy your life being assured that property investment has taken care of your retirement years. Now, you need not have to depend upon social security to have to foot your bills after retirement!
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Astotoargurge wrote:
18/07/2011 07:23
Being able to maximise all of the property investment tax benefits available will make a great difference to being able to return a year on year profit from your property investment portfolio. It will require hard work and time to really understand how the whole system works. It would make good sense to take on a financial specialist to assist you. This would be a particularly good idea if you have a full time job and little time to dedicate to the necessary research and administration to make sure you achieve this goal.
It is important to get organised and understand the five key areas where you can maximise your tax benefits in Australia. Collect all the invoices and details of payments you have made to help your property investment portfolio and gain the best return on your investments.
Depreciation is an important contributor; each year your accountant will advise you of the amount you can depreciate your assets as acceptable by the Australian tax authorities. Depreciation allows you to reduce the value of fixtures and fittings because of wear and tear. Many property investment owners chose to install expensive fixtures and fittings, so that the depreciation amount is greater and this helps them to offset any gains they make on their other positive cash gearing properties. Take note that depreciation does not exactly match real wear and tear. For example, a cooking range from a top supplier can be perfectly operational after 5 years use. However, for the purposes of depreciation, the cost may have been already completely written off. The result will be that you can rent the property out at top rental rates again without having to complete a makeover.
Mortgage interest will probably be your biggest tax-deductible expense. As a landlord, you are perfectly entitled to claim a deduction on all the mortgage interest you are required to pay. Don't forget that stamp duty payments are also completely tax deductible. If you have had the need to take out home improvement loans to maintain you property investment portfolio, remember the interest these loans attract can be added to your tax deductions claim.
As a landlord in Australia, you are required by law to pay landlord's liability insurance for the properties in your property investment portfolio. The good news is that these payments are completely tax deductible. This also applies to employee worker's compensation insurance; so don't forget this important contributor to your tax deductions.
Maintenance and repairs are essential and necessary to maintain your property investment portfolio in good condition. You are able to claim for these costs too, together with land tax fees, gardening and landscaping maintenance and corporate fees. So, remember to gather these together in your tax benefit claim. Don't forget that painting and decorating, as well as the costs for repair of broken windows or a broken water pipe are also eligible.
Should you need to travel to collect rent or go to the properties in your property investment portfolio, you can claim for your travel expenses. Of course you do need to be able to provide evidence to support that your travel was really to attend to your properties. If you can be sure tenants and suppliers you may have visited can confirm you were there, then there should be no problems.
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Acuttitty wrote:
18/07/2011 07:21
Property investment is one of the best ways to make money on a long term basis. Many investors are in favour of negative gearing with their investments. There are many pros and cons of negative gearing that might benefit you. Here are a few things to consider before you make a property investment.
Negative gearing is referred to borrowing money for a property investment with the sole purpose of renting it to a tenant. The rent is usually less than the accrued interest on the property, resulting in what is known as negative gearing. In most cases, the investor is at a loss for the first few years of the loan because he or she cannot obtain a 100% loan because of the residential crisis. Buying stocks, shares or dividends by borrowing is also known as negative gearing because you owe more than the investment is worth, hoping in many years that the profit will be bountiful.
One of the positive factors of negative gearing allows homes up for sale to be leased as private residential homes and they can give a citizen in need of a home a place to live. Many people who cannot afford to purchase a home put strain on the government by collecting assistance. Placing more rental properties on the market reduce government demand.
Property investment allows investors to build an income, assets can be sold later and money can be saved. When investors make money on negative gearing and sell their property investment homes, they build a sound retirement. A sound retirement for an individual means the investor will need less monetary assistance from the government also. Unlike most countries, Australia allows negative gearing to occur and the interest expenses and startup losses can be written off as tax deductions. All of the expenses for the first few years in maintenance, repair, and building costs can be much higher than the capital gains, reducing or eliminating the taxes normally required by the government.
When negative gearing occurs on a high level of property investment with many investors, it creates jobs. If investors are buying properties to build homes, jobs are created for builders, construction workers, landscapers, realtors, and more. This has a positive effect on the local economy. Many people who do not have money to buy a home or make a property investment often feel negative gearing is bad for the economy or for the housing market. The positive factor of paying less in taxes for the buyer could be reversed in saying the government needs the tax money.
Just to summarise it for you, a property investment is a monetary investment, whether you are living in the home or renting it to tenants. Negative gearing is the borrowing of money to make an investment for the property. The housing market history has always shown that it rises again after slumping and land is the one thing in life we cannot construct and make more of. Property investment is the smartest place to put your money and see true growth for your retirement - with or without negative gearing.
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Astotoargurge wrote:
18/07/2011 05:59
Property investment is one of the most viable investment methods. There are multiple ways through which you can benefit directly from your asset investment. You may choose to rent out the property for the purposes of a regular income, or you can hold on for it to accrue equity before selling at a higher value to make profit. In Australia, there are tax laws that govern both ownership and disposal of such assets. You therefore need to learn a thing or two concerning these tax laws before engaging in buying or selling of property investment. A tax consultant is best placed to give you all the relevant information regarding property taxes.
Capital gains tax is the tax levied on the income obtained from the sale of property investment. This tax is not levied as long as ownership of the asset doesn't change. The Australian tax laws define capital gain as the exact difference between the amount for which you sell an asset and the value for which you had acquired it. The difference is what is levied. There are number of factors that determine the amount of tax to be charged on the gains. One of them is the length of time the investor had held the property. The other is the type of property investment.
The capital gains tax keeps fluctuating. For instance, if you want to sell property after just a year of ownership, the tax may be higher. However, if you dispose after more than 2 years, it will be lower. As is the case with all taxes, it is wise that you understand a few tips that can help you to avoid heavy taxation on your property investment.
Capital gains tax is not levied on principle residence. For a house to be classified as principle or primary residence, you must have lived in it for over two years. If you decide to sell off such property, you will be spared capital gains tax. The two years here must not be sequential. All you need to do is to prove to the taxman that you lived in the house for a period totalling two years in the last five years. This basically means that you do not have to be residing in the house at the time when you decide to dispose of the property investment.
Another way that you can use to avoid capital gains tax is to re-invest the earnings from the sale of the property investment and buy more properties. This must be done strictly within two years after the sale of your first property. This is a tactic by the tax authorities to encourage widespread investment. It means that if you do not acquire new property investment two years after disposing of the first assets, you automatically become a candidate for capital gains tax.
If you are a new investor, it would be a good idea to enlist the help of an economic or tax advisor who will be able to help you understand these issues. This will help you to make the best use of your property investment and avoid heavy taxes, which eventually cuts your profit on the investment.
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Acuttitty wrote:
18/07/2011 05:56
Owning a home or an apartment in Australia can result into a huge tax break every year, amongst other benefits. In fact, one of the largest property investment choices you can ever make is to either to own a residential house or an apartment. The tax advantages make it one of the smartest financial decisions an individual can ever make, partially due the government's encouragement with the many tax breaks that are offered. These tax benefits make it a lot easier to buy and own a residential property in Australia. As a home owner, you are usually guaranteed excellent returns when you sell your property investment.
Nevertheless, taxes are normally incredibly complicated and usually depend on a majority of factors, for instance the home owner's income. So if you have any questions regarding the taxes, it would be beneficial to discuss them with a good accountant or a financial advisor if you have one. Discussed below are some ways of maximising your tax benefits if you have a property investment in Australia.
Deducting mortgage interest
The biggest tax break for owning a home comes from the interest that that you will pay on it which is normally capped at one million dollars to the maximum. Any type of a residential property investment qualifies for this type of tax benefit for its owner which means that they don't have to live in it as their primary residence as long as they live there for a short duration during the year. The time requirements are either 10% of the length of time it is rented out or merely fourteen days during the year.
The interest that can be deducted is up to $100,000 on any debts that may list your residential property investment as collateral. For instance, this can be a home equity loan. A limit might be placed on this especially if any of the funds that have been borrowed may cause the debt owed to rise higher than your home's value as listed on the property investment market.
Tax free profits
Another benefit to owning a home is that you are not subject to taxes on any income that you get when you sell your home. Typically, $250,000 in profit is excluded from the taxes for single people and $500,000 for couples. This also includes any land which is directly adjacent to your property investment. Of course, there are rules and regulations governing this. You must have resided there for a minimum of two of the five previous years prior to selling your property investment.
Property investment taxes
These taxes are also income tax deductible for both the primary home and others that a person may own.
Writing off your moving costs
Any individual has the possibility of writing off their moving costs to their new residential place as long as it is 50 miles or closer to their employment place than from their former home. Nevertheless, you have to work full time for at least 39 weeks in the area of your employment for the next year. Being self employed also allows your moving expenses to be deductible but you do have to work full time for 78 weeks during the course of the next two years.
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Astotoargurge wrote:
18/07/2011 04:33
Property financing is the chief determinant of your property investment aspirations. In the current market where loan products are more than the property on offer, it is a difficult to settle on the best loan option. The large pool of loan options has both advantages and disadvantages that will be analysed here. However, one thing that is true is that acquiring a property investment loan has never been easier. Lenders of such credit are literally begging customer to apply for them. If you have property investment dreams, you can take advantage of this rare opportunity. The biggest question is where do you start?
If you are a novice in property investment it is a wise idea to speak to a mortgage broker before applying for a property loan. Mortgage brokers have years of experience on the types of mortgages that are on offer. They can help you when it comes to sieving through the hundreds of offers that you will be hit with when you show interest. Remember not every mortgage that is on offer can suit your needs. Such an expert understands the mortgage jargon and interest calculation. Every little print in the plan means something and it has its own implications on the loan. An honest mortgage broker will lay all the facts on the table for you to make an informed choice. Remember to put into consideration all your preferences before settling on a property investment financier.
The amount that you want in the form of a loan is another factor that will lead you to the right lender. For instance, if you want a huge sum, which would be the best source? Is it the bank or the credit union? Some lenders have a limit to the amount they can give for property investment. You therefore need to approach a lender that will fully fund your plan.
If your repayment plan is tied to the income from the property investment, the property location and value are factors that must not be ignored. For instance, if you are borrowing for rental units, how much are you expecting in returns from rent? Is it enough to repay the loan? If not, do you have other sources of topping up the earnings?
Every property investor needs to consider the property loan flexibility. What are the lender's policies on repayment adjustments? Supposing you want to vary your loan, what is required? If the rates become favourable during the loan life, do they, for instance, allow mortgage refinancing? Mortgage refinancing allows an investor to take advantage of lower interest rates as they become available
Loan structure also determines the type of financing to choose for property investment. Structure of a property loan refers to the repayment period and schedule. A loan plan like Line Of Credit loans that have no tight repayment schedules are favourable because they allow the borrower to use the mortgage for other uses rather than property investment. For instance, many borrowers are now using equity or home value to acquire other loans or mortgages.
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Acuttitty wrote:
18/07/2011 04:31
Hi I am Jack Wilson and I am here to guide you through [url=http://queensland.propertyinvesting-au.com]safe property investing[/url]. The real estate market can be tricky. However, with my help you can unlock the secret to buying and selling property that can earn you a big return. With low interest rates and a huge drop in the median home price in Australia you may be able to capitalize like never before on this great investment. Just like any investment there are risks associated with entering the housing market. You may be wondering things like; what if I need the money out of my house and it takes too long for me to sell the house? It is true that homes are not very liquid assets, but there are ways to get around this.
You also may be wondering if you really want to bother with owning property. Owning a piece of property in Australia is a very tangible and rewarding thing to own. You have many options on what to do once you have established a position in the market. Renting out your house to cover the mortgage is a very viable option. With home prices being so low investing in a home seems like a very good choice, and it is, but you need to know some background as well as have a little bit of help from a professional.
My safe property investing videos are clear and concise giving you the knowledge you need to make smart investments. A well rounded portfolio very well could include an [url=http://wealthcreationstrategies.propertyinvestment-au.net]investment property[/url]. Diversification is always a good idea for the long term investor. It is always a good idea to proceed with caution when taking on new investments. If you go into a deal to acquire a property without understanding the market and the logistics of the process you may be in for a wild ride, or even worse you may end up losing money. With the right attitude and guidance you can win, and now is a better time than ever to make real money.
With these clear cut, and informative videos by Jack Wilson you can be confident knowing that you have reliable information to back up your decision. You can even find ways to own property even if you think that your credit is too poor or you don't have enough for a down payment. Learning the tricks of the trade has never been faster and easier. Once you have mastered the art of obtaining investment property you will be able to provide for your family without having to worry about running out of money in your golden years. This series may be the best way to look at a goldmine of opportunity.
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Astotoargurge wrote:
18/07/2011 03:06
How much money you can invest depends upon the difference between how much money you earn and how much you spend. Only surplus money at the end of the day will help you make any property investment. There is a requirement of a considerably large amount of money when you want to take any decision regarding property investment. When you decide to make a property investment, you need to choose the right location and size of the property and also the right time to make your property investment.
When you choose property investment you are bound to make a sizeable amount of investment. Also at the same time you will be flooded with offers from lenders willing enough to finance your property investment. After researching all these myriad offers you need to judiciously select the best one for your property investment. The offers from regular banks will include offers for financing your property investment only if you meet their stringent rules and conditions. On the other hand, there will be non-banking financial institutions who will give you fabulous offers for financing your property investment even if you do not meet the documentation required under normal conditions. But beware of the fine print!
Not only will there be ambiguous clauses for financing your property investment, but the rate of interest such non-banking lenders charge will be exorbitant and, in some cases, also compounded. This will be detrimental to your financial situation in the long run. There is a chance that the finances offered by the banks in Australia may not be adequate for your property investment, but they are genuine people and the rate of interest will also be economical. Also they may need you to deposit upfront a certain percentage of the cost of your property investment. Other lenders may not necessarily require that such stipulations be met by you and may agree to finance your property investment with bare minimum hassles.
The first step you need to take when thinking about any property investment is to calculate the actual amount you will need to purchase that property. That means considering the amount of finance you can readily muster and the amount of balance required for the property investment. You may envisage a specific amount, but in all likelihood, that amount will barely cover the basic cost of the property investment and you may find yourself needing more money to pay the other charges and closing costs of the property investment. Hence, it is advisable to keep a buffer in the amount you would like to borrow to finance your property investment.
If you are already the proud owner of a property in Australia that has earned equity, getting finance for your property investment is simpler. The equity on your first property can be used for standard amortisation and financing your property investment. Such financing can be repaid by way of amounts that constitute payment of principal, as well as interest, on the financing received for property investment. Another popular method of using this equity for property investment in Australia is to create a line of credit and this line of credit can be used to for purposes other than property investment also. In Australia you can also get an amortising equity loan against your home equity. The only difference is that when you alter the financed amount your payment schedule also changes which includes interest as well as the principal amounts.
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Acuttitty wrote:
18/07/2011 03:03
No property investment is attracted by an unhealthy economy. You will not want to increase the risks associated with investments by attempting any property investment in a sick economy. Hence, only when an economy is healthy and hearty will individuals flock here for property investment. The Australian economy is so robust that there is a flurry of property investment. Today, Australia is boasting an unprecedented high demand for its products which boosts the economy to a highly healthy level. The healthier the economy, the higher the attraction for individuals to opt for property investment and the present strength of the Australian economy is the cause for abundance of property investment endeavors.
A prudent individual will first study the economy and ascertain the viability of property investment such that it is sure to create profitable returns. The abundant demand for Australian local goods has generated high capital gains, resulting in increased employment and augmented the economy. This makes it very alluringly appealing for property investment as when there is a high employment rate, it is a sure sign that the relevant economy is healthy and investors will surely flock there for opportunities. The graph of the Australian economy is rising diagonally with no remote signs of even a slight slump and hence, property investment in Australia is guaranteed to be a profitable venture.
Any economy devoid of inflation is sure to be the target for property investment and the Australian economy is no exception. The inflation has been kept well under wraps by the Reserve Bank of Australia which has boosted confidence in the economy and irresistibly attracted a plethora of property investment. Any growth of population in a developed country is most welcomed as it promises a robust supply of manpower as well as a high level of demand which will enhance the propensity for property investment. Also, the expanded growth in population is sure to cause a scarcity in the property market with a corresponding increase in demand for property investment. Also in recent times, there has been restricted activity of construction which has further enhanced the dirge of property. This situation is an anomaly because it opens the doors for excellent property investment due to a glaring difference between what is available and what is required.
With high rentals being the norm of the day, first time buyers may find it to their advantage to make property investment. Not only locals at Down Under but even foreign investors are being lured by the Australian economy. These investors from across the seas find the blooming economy of Australia harvesting happy investment fields. One of the main causes for such an influx of foreign investment is the confidence exhibited by the Australians themselves which has been a beacon for these investors. It is a contra effect of a rosy economy and a confident satisfied local population which has led to a propensity for great property investment - literally a gold mine!
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The Australian economy is currently supporting growth, which is positive news for everyone, including property investors. This growth has seen employment rise and wages increase, and this continues to drive the country's export figures up. Inflation is stable as are interest rates, unlike many other countries around the world. Therefore, it is a perfect time for property investment. Buying in an economy that is rising slowly is the best way to secure a long term yield on property investment.
As the country continues to prosper, so does its population. This means there is a shortage of accommodation and property investment is the way to fulfill a good yield on investment and offer quality low-cost housing to those who need it. Buying off-the-plan property investment at this time is an excellent idea and if you are deciding to start in that arena for the first time then you will find that the government will offer a grant to help towards starting up.
Now it is a good time for property investment and Australia is certainly supportive of that. Improving housing and offering more rentals on an affordability basis is always welcomed. Interest rates will start to rise again over the next few years; there is very little doubt about that, so whilst they are low, it makes sense to invest in a commodity that will yield a good return in a few years' time. Some investors may not need to borrow capital from the banks to finance a property investment project and if this is the case then choosing the right property investment at this time will yield great rewards.
Off-the-plan properties have continued to inspire and receive a good amount of interest. Although in previous years, these have been reduced somewhat when the economy was a little unstable, now they are starting to return to popularity as money is more abundant or easier to obtain. Job security obviously helps when the banks consider financing mortgages or property investment of any kind. When a country is doing well and prospering, the confidence grows in the banking institutions and they are more likely to lend on prospects that would not be considered in times of hardship or stilted economic growth. This is very good news indeed for property investment in Down Under!
Supply and demand govern whether it is feasible to invest safely in an area or commodity. As we have seen the demand for good quality housing is currently high whilst the availability of that housing is low. The available government help, grants and other incentives aid the would-be property investor to get a step onto the ladder. Now is the ideal time at the beginning of the ascent of economic growth in Australia. Buying property at a reasonable price and renting it out for a period of time allowing it to establish a good yield over the years is an excellent way to make a return on investment capital. There are plenty of advisors and assistance available to help get started in this area and once you have taken the plunge, the rewards will simply be outstanding.
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Acuttitty wrote:
18/07/2011 01:33
Have you ever asked yourself why some people have built highly successful portfolios while their colleagues seem stuck for years? The answer is easy. How you approach your property investment from the start is what makes the difference. Property investment is a great way to create wealth and gain financial freedom at any age. All you need to do is set clear goals, plan properly and pursue the targets with optimism, determination and hard work. Failure to plan properly can lead to costly financial slip-ups, which can lead to terrible losses. For instance, application for the wrong property loan may result in unnecessarily high interest loans and burdens that could have been avoided.
The Australian property market offers a great opportunity to create wealth through property investment. A thriving market and good prices means that you can get maximum benefits on your investment if you make the right moves at the right time. For instance, a clever property investor is constantly on the lookout for potential deals, interested sellers and potential buyers.
With the changing economic times, and other factors, it is possible to acquire property for less than its actual worth. This is an avenue that presents a great opportunity to make a killing after renovation and proper marketing. With a bit of diligence, you can make a lot of wealth and a steady income from property investment. The following are some of the market tactics you can use.
Buying undervalued investment property is a tactic that has been used by investors to make millions in the property market. So, how do you undervalue property? The secret is simple. Look out for the motivated property sellers. Such people have other pressures pushing them to dispose of the property. At such a time, they will take any price to offload the burden of maintaining the property. That is the best time to quote your price. If such a buyer accepts, you will own a property investment that is way less than its actual worth. Disposing of such property later at the real value or more creates instant wealth.
Property appreciation is the next method of creating wealth through property investment. Whilst many people view the current inflation as a bad economic sign, it is good tidings to property investors. This is because an increase in inflation seems to increase property values as the cost of building materials rises with inflation. So if you had acquired your property investment a few years ago, it must have appreciated a great deal by now. Disposing of the asset and using the profits to invest in more property will multiply your portfolio.
Buying dilapidated property may seem reckless, but it is a method many have used to cross the poverty line. Such property that is in dire need of repairs will not cost you much. A clever investor will work out a way of repairing the property investment at a cost that is less than its worth. Selling such property at the correct value is instant profit to the investor.
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Astotoargurge wrote:
18/07/2011 00:01
When you possess property investment, your worldly goal will be to make a profit and, yes like everyone else, you will have to pay tax on that, unfortunately. Therefore, wouldn't it be great if we could minimise the tax payments? There are various ways and means to get the best possible tax benefit on your property investment. In Australia, interest on your home loan(s) can be deducted from your income tax. The same is true for stamp duties charged by banks.
Also, the depreciation of your property can be deducted. Depreciation does not mean that the value of your house, as such, is decreasing. It simple means everything in the house goes down in value due to the use of it. Think of geysers, piping, wiring, taps, kitchens and bathrooms, etc. Over time they will get old and will become worthless and will have to be replaced. Make use of this opportunity.
Even general insurance and landlord liability insurance that relates to the property investment can be subtracted from your income tax. That is not all, maintenance and repairs, costs for a body corporate, garden maintenance, administrative costs and even travel costs (to collect the rent for instance) that relate to your property investment can be deducted as well. Agent fees, contractor hiring and property management fees can all be used to bring down the amount of your payable annual income tax.
Last, but not least, you would be able to deduct negative gearing. Since there is no deadline for claiming negative income it could be to your advantage to claim this in times when you make a lot of profit and so you can maximise your income tax deduction.
All these deductions can make it interesting for you to start property investment. As the landlord you have the duty to keep it in excellent condition, but you do not need to have sleepless nights over it. The positive proceedings that result from property investment will help you, and will provide for your financial needs later in life, like retirement for instance. Share portfolios in volatile markets, as is happening today, do not generate the same income anymore as they did many years ago. It can be said that this may also happen in the property market as well, but it is usually a temporary event and regains quickly again after a market crash has occurred.
In all instances, it is good to contact your accountant or financial adviser about your property investment. They will be able to give you guidance on what to do and when and also advise against what not to do and why not. So check it out for yourself. Find the right location for your property investment, make a list of all possible costs that will come with this investment, calculate how much rental income you could generate and how much you would have to pay the tax man and make use of the opportunities offered to you. You will not regret your property investment and you might even start thinking of investing more.
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Acuttitty wrote:
17/07/2011 23:58
Retirement can be a dreadful time for some workers. Unfortunately, it is inevitable. When such a time comes and you have no steady source of income, life can be miserable. There are many ways of investing to fund your retirement. Early planning is of course essential if you want to have a secure retirement. Stocks are a good option. Investing in stocks helps you to enjoy dividends for as long as you want. There are also numerous retirement schemes that are available. Property investment, however, remains the most viable way of funding your retirement. This is the only sure way of attaining financial stability when you are no longer strong enough to work.
In Australia, property investment for retirement has a number of advantages. The first is tax cuts. In Australia, if you are investing in retirement age you enjoy handsome tax relief. This is why the country is one of the most favoured locations by retirees to live and work. Another advantage is the availability of funding for such property investment. Many lenders accept the same property as collateral for property financing. Renting out such property is an assurance that the property will repay the loan without problems.
Stocks and bonds are profitable but do not guarantee a steady income during your golden years. Many firms pay dividends dependent on the profitability of the company. This means that if the firm makes losses, there are low chances of getting income from the shares. Furthermore, many companies pay out these benefits annually. It is tedious and punishing to wait for such income once every year. Property investment is a quick payer with steady revenue coming in every month.
Property investment in Australia has never been easier. The property market is flourishing with new cheap homes coming up. Interest rates for property investment loans have also fallen considerably. This is why immigrants are flocking to Australia like never before. If you take advantage of these excellent economic conditions, you can retire in peace, knowing that you have a reliable source of income for many more years. A clever way to create wealth, even in retirement, is to buy property even when rates are low and sell off when prices improve.
Another intelligent way of property investment for old age is by obtaining mortgages using your current home equity. Since most Australian lenders accept home equity as security, you can use the same to invest in other income generating properties or homes for sale. Even if you are in the middle of repaying a mortgage, you can use the home equity to acquire another loan for more property investment.
The last and equally valuable tip is to begin investing early. The fact that you are young and strong does not mean you will not grow old and frail. Economic experts say wealth is created over a long time. Little by little, putting in the effort when you are young will ensure you have property that you can rely on for your income when you retire. Property investment is the only option that guarantees financial stability now, and in the years to come.
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Astotoargurge wrote:
17/07/2011 22:22
We all have our dreams. All of us have thought about property investment and thought a bit more. The vast majority will keep on dreaming and only a few will indeed take the step and start with the property investment dream. Particularly after the latest financial crisis, people are very reluctant to particularly invest in shares or other opportunities that, over time, could bring a comfortable and sustainable income.
Nothing comes for free and property investment is no different. You will have to put your mind to it and spend hours familiarising yourself with the subject and what it can really bring you. It needs dedication and perseverance. You will need to be able to find the pitfalls and deal with them decisively. Property investment is reachable, so don't just dream, do it!
The demand for affordable, good quality property is enormous, yet hardly available. With the low interest rate given by the banks at the moment, you could help boost the rental housing market by offering exactly what people are looking for. Furthermore, the construction of new property means that more people will have to be employed in this industry. That is all positive news, so what are you waiting for? Come and take that step.
Property investment for the rental market is not just an investment. It is like having your own business; your own product and your own (potential) customers who have all have their individual needs and wishes. You will have to differentiate yourself from other property investments. Ensure that the quality gives value for money. By maintaining your investment property you will ensure it keeps its value. By working with a manager who knows the market, you will receive advice on the next step. This will lead to your tenants being happy and satisfied customers.
It is a myth that you need a lot of start-up capital for the housing market. You can start with a small property investment by borrowing a few hundred thousand dollars and, with the help of the taxman, you will be able to deduct certain costs from your income tax. Particularly in the first few years when rental income might not exceed the costs for interest, maintenance and even water bills. That should put your mind at ease. When you start seeing the return on your investment progressing, you can start thinking again whether it is time to choose another property investment or whether it is time to spend money on something else.
You don't have to go through the process of property investment alone. Your property manager will assist you all the way. He will educate you in property law, finance and even marketing. This all will give you the knowledge and decision-making will be so much easier. When you have been in property investment for a while you may wonder why you did not start earlier. The wealth property investment brings in the medium to long-term is just the security needed to make a comfortable nest egg for retirement.
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Acuttitty wrote:
17/07/2011 22:18
Similar to a stock portfolio, it is possible to create a real estate portfolio by investing in property and generate wealth by achieving capital growth and an enhanced cash flow through rentals. In Australia, this practice of property investment to create wealth has resulted in the creation of wealth and in making people rich. Property investment is an excellent vehicle for creation of wealth and it would be most prudent while undertaking property investment to first research on certain vital aspects regarding the property.
As with all things new, the mindset has to be geared positively towards property investment which is vastly different from purchasing a home for residential purposes. Many individuals are accustomed to property investment as a form of wealth creation. There are numerous individuals who have purchased a home to live in which is also a form of property investment. This can form the first baby step to creating a portfolio of property investment and helping you get rolling on the path of riches.
All you have to do is that when adequate equity has been acquired by the first home, the same can be leveraged for additional property investment. This is possible with excellent planning and timing of action. Property investment is an investment in a solid and tangible asset. You need to have the staying financial power and strong will to ride out any difficult lean times when the property market may be facing a downward slump. With land being limited, its value is sure to appreciate and property Investment does form an excellent tool for creation of wealth. There has to be an appreciation and property investment will nearly always make money for you.
It is all the more exhilarating to go in for property investment when the proposal does not involve any financial outlay from your side. The first original property in which you are residing can be used as collateral to fund this new property investment. Also, it may so happen that the rentals you may receive from this new property will cover the entire interest payments and may leave some money over for you to spend and enjoy. The property investment needs to be in the right location and of the right size to generate good rentals. If it is a plain plot of land which you have invested in then the location also has to be premium. It is only then can you get excellent profitable offers for the plot of land. In addition, if you have the capacity to hold on to this plot for some time that might come up to a few years, then your property investment activity is sure to create wealth and give you superb returns.
You may also want to take note that in Australia, expenses incurred in the maintenance of any property investment can be offset against income earned not only by way of rentals but if there is a shortfall then the taxable income can come form other sources as well. The deductible expenses include items such as interest payable on the loan taken for property investment, any charges or fees incurred, any water and council rates as well as expenses on general maintenance.
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Astotoargurge wrote:
17/07/2011 20:33
Property investment is the best way to create wealth in the long-term for any investor. Many of the ways you can make money include monthly payments from tenants, an eventual sale, and capital gains taxes. Capital gains taxes are not a concern in Australia for property investment. Australia allows negative gearing to occur with property investment. Negative gearing means that if your investment and cost of the investment is more than the capital gains taxes, you can write off the costs as deductions. You won't suffer from high taxes because you are not using the property as your primary residence.
Rental properties are an excellent way to build a portfolio and a stable monthly income. You can always rent the property to a tenant for an amount higher than the monthly loan payment. Once the property investment loan is entirely paid off, the monthly payments on rent are total income. The more homes you purchase and use as rental properties, the higher your monthly income is. This will allow you to save money and build wealth for your retirement and future.
Property investment is a sound investment because it is a tangible asset you can touch and feel, unlike stocks. Properties are guaranteed to go up in value over years. Stocks are unstable and depend on the success of the company you invest in. If you choose a company that files bankruptcy and closes the doors, chances are you will lose all of your money. Creating wealth with stock is unpredictable and very difficult to do. Property investment is much easier. Most investors who are patient and wait many years enjoy the monthly income and a huge profit when the home sells.
Australia is an excellent place to purchase properties because salaries are increasing, the population continues to increase substantially and tourism is growing faster than ever. There are fewer homes available for residential purposes than there are people looking for homes to live in as a rental property. More people prefer a rental today because of the financial crisis and they are in no position to buy and own a home.
The cheapest way to make property investment work for you is by purchasing a plot of property and building a house on the land after you buy it. Taxes are always lower on a piece of land without a structure. The expenses of building a house for an investment can be deducted from your taxes and give you a possible return, or ensure you pay less at the end of the year.
Property investment is a smart way to create wealth for any investor looking for a way to build their retirement. Placing your money in a risky investment could cause you to have nothing for your retirement. Property is tangible and will increase in value in the long-term. You can enjoy the benefits of collecting monthly income and making property investment a full time job or just enjoy the additional monthly income. The goal is to build a sound retirement becoming entirely independent of need.
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Acuttitty wrote:
17/07/2011 20:30
In recent times, many people have seen their pensions and plans plummet due to interest rates being so low. So is there a sure-fire way of making money? Property investment has always been high up on the list of profitable ventures and it continues to lead the markets. Investing money in this way may not be exactly "sure-fire" but it is safer and more likely to make profits than any other type of investment.
Property investment is not for the investor who wants to make a quick return in 6 months or more. On average, a property will take around 2 years to show some returns. Sometimes it can take longer, sometimes shorter, so bear that in mind when you decide to invest your money. Choosing an off-the-plan property is a wise move for anyone interested in property investment and there are a few good reasons for this. An off-the-plan property is a property that has yet to be built. The ground has been acquired and everything is ready to go.
One of the finer benefits of an off-the-plan property is you are not required to pay a huge deposit for the property investment. Just to reserve it requires around 5% or 10% or sometimes property investment in this way can attract sales where no deposit is required. Reserving the property at the agreed price is likely to see an increase in value once the property has been built. The amount of profit should the property be sold will differ according to the market forces at the time of completion. Choosing property investment in this way can enable a shrewd investor to choose a prime plot for the accommodation, which will almost certainly appreciate in value.
Clearly, it is beneficial if you know the builders providing the off-the-plan property. That way you will be sure that your property investment is in safe hands. If you are unsure of the workmanship, your property investment may not give as good a return as you would hope. However, dealing with reliable builders and high calibre craftsmen will assure you of a quality finish to the building and a healthy return on your property investment. In fact, some builders will allow the investor a say in the internal finishing's.
Another great benefit of property investment in this way is that if interest rates rise, as they always do, you will not have to pay any more of those for your property as the price is fixed at the time of the deal. In fact, there are other ways to save too, for example in tax benefits and on stamp duty in some cases. Do be aware that patience is needed for your property investment as the building and construction trade can be beset with problems if weather conditions are harsh. There can also be timing difficulties with other professionals and so the property may not be ready exactly on time.
Property investment is usually closely regulated and so you can be sure that the final construction will meet with legal requirements and finishes. Waiting for 2 years or so for your property investment to flourish may seem a long time but when you see the returns, you will be so glad that you have chosen to invest in this arena.
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Astotoargurge wrote:
17/07/2011 18:36
It is attractive to many buyers to make a property investment in a house or unit even before a single brick has been laid down. This type of property investment is known as off-the-plan because the building doesn't even physically exist yet; the only information about it is contained in a developer's plan. You may be thinking that this is a risky way to make a property investment, but there are considerable advantages. One of the greatest advantages is that you, as the investor, can get considerable discounts taking the cost of the property, when it is eventually complete, below its market value. Secondly as the buying price of your property investment is made some months in advance of completion any appreciation in value will work totally in your favour when the property is complete.
Turning to the question of finance, the key question is how much can you borrow? On face value the rules are quite straightforward. As a first time buyer you can claim financial assistance of up to 95% of the agreed value. The same rate, 95% applies for investors too. Finance for a low doc borrower, those who are self-employed and therefore only submit an income statement the year after they have been in business, can claim up to 80% finance for off-the-plan property investment.
However, there are a number of conditions that financiers will attach to their loans for off-the-plan property investment. It is well advised to be perfectly clear what these are before accepting a proposal. Take time to shop around. Competitive basic loan discounts are available together with complete professional service packages. In a number of cases, lenders will not agree to final approval for your off-the-plan-purchase until the property has been completed, or at least is within 6-12 months of confirmed ready for occupancy. More often than not, the lender will want to see a certificate of occupancy before agreeing to settlement.
One of the problems the banks have is that their normal method of property valuation cannot be applied to off-the-plan valuations, as the property, at the time of the loan request, does not physically exist. In normal circumstances they would commission a property valuer to provide an estimate and compare that with the purchase price being requested. They would then take the lower value and decide how much to lend for your property investment. The challenge to the banks is that 12 months or even some years may pass from the moment the loan is requested until the final completion date arrives. For that reason banks use market value rather than purchase price in assessing the correct value.
You may think that requesting valuations from multiple investors could be a good idea. Certainly it would allow you to find the best deal from the lender who gives your request for property investment the highest value. However, there are risks. Getting a valuation normally requires that you request a loan. This request effectively adds the value to your credit score as a debt. Multiple requests could drop your credit rating drastically and result in you being unable to secure finance, so do take care.
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Acuttitty wrote:
17/07/2011 18:32
Property investment is the most viable wealth creation machine of all time. Although it may seem a slow and tedious method, all wise and patient investors that took this route have built empires for themselves and their families after a couple of years. Most of the affluent people that you envy have not attained the status in a year or two. Wealth creation is a slow and sometimes costly journey that only the resilient have successfully trodden.
Stocks and business are other means of investing for a secure future but none provides certainty for steady cash flow like property investment. However, it is not obvious that all property investment will give handsome returns. That is why is wise to speak to a financial expert before sinking your funds into a property investment that you know little about. This article merely puts into focus some of the tax benefits that property investors are entitled to.
Benefit on depreciation
All property investment owners are entitled to tax deduction on depreciation. This applies to both the building and the items inside. Depreciation basically refers to the reduction in an item value due to age and wear and tear. The Australian tax system has a percentage rate that it uses to calculate the depreciation rate for purposes of a tax benefit. A new property investment has a higher depreciation rate than an old one. Tax calculation on depreciation can be a bit confusing to a layman. This is due to the huge number of items in your property that qualify for the tax deductions on depreciation. A quantity surveyor or an accountant would be better placed to give advice on this area and even assist in compiling the claims.
Negative gearing
Negative gearing is another avenue that property investors can benefit from tax deductions. A property investor is said to be negative geared when the returns on property investment are lower than the cost of maintaining the property. In simple terms, the property is operating at a loss. For instance, if the monthly payments that the property owner makes for the mortgage are higher than the rental income from the property, then the investor can be said to be negative geared. This situation improves with time as the property appreciates in value and the loan amount decreases. To caution property owners from such eventualities, the taxman takes part of the loss while the rest is borne by the investor's other taxable incomes.
People have taken advantage of negative gearing tax benefits to buy low cost property investment which later turn into cash machines when they appreciate.
Capital gains tax
Capital gains tax is the money levied on earnings from the sale of property investment. This tax is based on certain ownership regulations. The Australian tax system exempts one from this tax if the proceedings from such a sale are used for re-investment within a certain period after the property sale. If you fail to show proof of property investment from these earnings, you are liable to pay the full capital gains tax. It is good to seek advice from a tax expert in order to take full advantage of these benefits.
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Astotoargurge wrote:
17/07/2011 16:29
Australia has been and is projected to remain as the most stable property investment market for many years to come. Even when the ordinary market swings are factored, the market still offers great prospects in the long term. The resilience of the Australian property market is aided by key drivers that have ensured that it remains on an upward trend even as other markets struggle with declining property investment prices.
The now easing Global Financial Crisis (GFC) is an indicator of the stability in the Australian property investment market. In the heat of the economic meltdown when most of the world economic giants' property markets were collapsing one after the other, the Australian market held on steadily. In fact, there was hardly any shock felt in the market. The next 12 months after the GFC when the international property investment registered almost zero growth rates, the Australian market recorded impressive capital growth. The question in the minds of most property owners as well as potential property investment owners is what is the future like for the Australian property market? For how long can the positive growth be sustained?
To answer this question satisfactorily, you first have to look at the government policy which plays a major role in the performance of the property investment market of a nation. At the height of the global economic crisis, the Australian government took serious steps to cushion the property market against the kind of collapse that was witnessed in USA. First it introduced new incentives in order to boost property investment demand. For instance, the First Homer Owners Grant was floated. Later, the government ordered a review of the foreign property ownership laws. Following the review, the laws were greatly relaxed, making it extremely easy for overseas investors to own property investment in Australia. These two measures were amazingly successful. In fact, the government had to later review the foreign investment policy for the second time to reduce the influx of foreign investors!
Employment plays a major role in the demand for housing and property investment. The Australian unemployment rate is very low compared to major economies of the world. At the same time, its GDP has been on an upward trend for the last couple of years. Earlier this year, IMF analysts predicted that the Australian economy will grow at a rate of over 3.5% in 2011. This has been given a shot on the arm by the massive demand of core and iron by China and other consumers.
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Acuttitty wrote:
17/07/2011 16:14
Negative gearing is a common way to borrow money for property investment purposes. It does not have to be limited to property but can be used for stocks and bonds and other forms of investment too. An investor will need to put some of his own money into the pot but the lion's share of the property price may be borrowed. Being able to borrow in this way can enable a property investment to be made as it arises. This is so much better and easier than having no funds available when a profitable proposition arises. If you don't take advantage of a potentially profitable situation, you can guarantee that someone else will.
Whilst in the long term, the property investment is likely to yield a profit or gain, in the short-term it may produce a loss, which can be offset against a tax bill. Basically with property investment, negative gearing means that the running costs such as repayments of the loan and other expenses are heavier than the income produced by way of rental income. This may sound like a bad deal as most people go into property investment to make a profit, don't they? Yes, they do and in the long run, a profit will be made. However, the short term is likely to make a loss.
Using negative gearing for property investment is the way that many businessmen make their money. They recognize that the losses are only minimal and short term when taking the whole investment into account as well as the fact that the property can be sold in later years at a huge profit. This is of course based on the assumption that property prices continue to rise. Holding onto a property for a minimum of 15 years or so would see prices fluctuate during that time, but overall they would be likely to increase at the finishing line. Property investment in this way allows investors to buy properties at minimal costs, which would not be possible any other way.
When property investment is purchased with negative gearing, there are substantial tax deductible savings that can be made on the purchasing. These can include stamp duty and valuations costs. Ongoing costs such as wear and tear as well as depreciation can also be taken into account on the annual tax bill. New properties are the best property investment as tax benefits are available for the investor. The government also provides incentive schemes to assist investors on their property investment too. Buying new property with a view to renting it out is a great way to have a regular income, even if it is a slight loss initially, as the new property can appreciate vastly over the years. The loss will not be anywhere near the amount the investor will make in profits at the time of sale and so negative gearing is considered a very good way to make money in property investment.
The answer is yes; negative gearing does make sense for property investment but do start small and slowly build your portfolio in this way. It will also give you a good idea on what to look at for your next property investment.
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Investing in property is one of the best ways to secure yourself a stable future. However, many people are locked out of the investment option due to the large capital output that is required. With Australia being one of the world's hottest property investment spots, it is only logical that many local and foreign investors are looking for ways to enter the property market. This being the case, financial institutions have come up with credit options that can help investors, even those in middle income category, own property.
Australia's GDP has been on the rise during the last decade. In fact, it was ranked higher than that of Germany, UK and France in 2010. The rise in GDP has been attributed to many employment opportunities and subsequent immigration of expatriates from other countries. This has led to an increase in the demand for houses in urban centers by the middle working class population. Thus, if you are looking for the best property investment destination, look no further than Australia. However, you might have to overcome one major hurdle: financing.
One of the most common financing options is to apply for a home loan or a mortgage. Most credit institutions offer these options to middle and upper income persons who wish to own property. Before approval, the applicant will be required to meet a minimum criteria set by the lender. This can include having a permanent source of income and a good credit history, be able to finance about 30 percent of the loan they are applying for, among other criteria. Before applying for financing from a particular lender, it is advisable to shop around and see what others are offering.
There are a couple of things one should consider when they are looking for a home loan, mortgage, property development loan or other forms of property financing credit. One is the interest rate that they will be charged for the credit. Lenders consider variety of factors when deciding at what interest rate they should offer financing to a borrower. These include the amount of down payment, their credit history, the term of the loan, and more. To reduce the overall payment, the borrower can offer to provide a larger down payment and reduce the lifespan of the loan.
Apart from the major lenders like banks and other credit institutions, there are others that are lesser known but offer custom property mortgage financing. These include private lenders, worker's credit unions and other credit organisations. This group of lenders is favoured by borrowers who do not have a good credit history, are not able to raise the initial down payment required by the mainstream lenders, or cannot qualify for home loans because they have a poor credit history. The lenders will readily welcome those who cannot get financing from mainstream lenders, but will usually impose higher interest rates and tougher conditions on the money loaned. Simply put, investing in Australia property market is a lucrative venture but only if you have the required capital (and there are lots of ways around this). Find out from your property investment advisor which financing options you can pursue!
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Acuttitty wrote:
17/07/2011 13:48
You acquire capital gains or capital losses whenever any event attracting Capital Gains Tax (CGT) occurs. Normally, when a CGT occurs, you make a capital gain when the sale proceeds are more than your purchase price for that capital asset like property investment. Similarly, you make a capital loss when the sale proceeds are less than the cost of the property investment. There is a chance that you can disregard any capital gain or loss if you had made the property investment before 20th September 1985 (the pre-CGT). Those who are Australian residents can acquire capital gains or losses even if the CGT event involves assets located in any nook and corner of the globe.
Capital gain or loss is related to the occurrence of a CGT event. These CGT events are myriad in nature and involve transactions wherein assets are sold like sale of shares, as also disposal of property investment. The occurrence of a CGT event happens when the capital asset owned by you is destroyed or lost, for example the property investment made by you may have been completely destroyed by the vagaries of nature like a hurricane or an earthquake or flood.
It may so happen that you may cancel, sell or surrender or redeem your shares inviting the occurrence of capital gains to happen. You may even grant an option to somebody to purchase your property investment or a liquidator declares that your assets are worthless which again paves the way for calculating capital gains and losses. Not only are shares and units in a unit trust or investment fund CGT assets, but so also are jewellery, furniture and property investment. You have to bear in mind that capital assets also include options and contractual rights as well as goodwill money and foreign currency.
There are some rollovers and exemptions provided by law. The main one is that if you have made a property investment before the 220th of September 2011, then you may not give any cognizance to capital gains or losses. Similarly, capital gains or losses may be ignored when the assets concerned are vehicles or motorcycles. There may be instances where the purchase cost of a personal asset is less than $10,000 like a boat or some furniture, or household items or any such items used for personal use only, then such transactions will not fit the CGT bill and be exempted. A vital point to be noted is that when you sell the main residential property investment such a sale does not come under the purview of a CGT transaction and capital gain or loss needs to be calculated. If you have a business and you have disposed of an asset which attracts the 15 year rule then such property investment will also not attract any capital gain or loss.
Normally, you make a capital gain if the sale proceeds of any property investment are more than the purchase price of the property investment and will be liable for payment of capital gains tax. But there are some additions to this basic cost price of your property investment which you need to add before calculating any capital gains. Generally, any property investment will involve many other charges and maintenance costs while acquiring the property and holding on to it as well as while selling the property investment. The incidence of capital gain or loss on sale of any property investment is calculated only after these charges are added up and subtracted from the amount received by sale of the property investment.
You need to be aware that if the sale proceeds from any property investment are less than this total cost then you will have incurred a capital loss. Though such capital loss cannot be deducted from your taxable income, the capital loss can be used to offset the capital gains from any other CGT event. Another important point to be noted is that any capital loss exceeding your capital gains for a particular year can be carried forward to the next financial year and the capital loss set off against capital gains made during that year.
There are three ways in which to calculate your capital gains from any property investments and only one way to calculate your capital loss. The advantage is that you have a choice for selecting one of these three methods and you can choose the one most beneficial for your sale of property investment. The indexation method permits you to add to your basic purchase costs a factor of index based on the CPI up to September 1999. This method is applicable when the property investment made is for more than twelve months old and will be more beneficial to you than the discount method. Use of this method is for property investment and purchase of assets made before 21st September 1999. The modus operandi for calculation is simple. All you have to do is to apply the index factor mentioned in the table and then delete the result from the sale proceeds of the property investment to arrive at the capital gain amount.
The discount method makes provision for allowing you to discount your capital gains. For individuals and trusts, the discount is 50% and for superannuation funds which comply with the statutory regulations and conditions; it is 33 and 1/3%. You have the option to use this method for calculating the capital gain on your property investment of more than 12 months old and if it is more beneficial than the indexation method. In this method, you first deduct the capitalization cost of your property investment from the sale proceeds and then apply the discount applicable to arrive at the capital gain amount.
The 'other' method is basically reducing the basic cost from the proceeds of any CGT transaction of your property investment. This method is mostly applicable when both the discount as well as the indexation method is not used for example, when the capital asset or the property investment is less than twelve months old. You need to reduce the base cost of the asset from the sale proceeds to arrive at the capital gains.
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