Aussie in Cayman Islands

Hi all, started reading this forum on the weekend, so still got a lot of reading to do, but here's a little about me.

Born and bred in Sydney, bought my first PPOR a 3 br unit in Five Dock, NSW in 2008. In 2010 moved to Cayman Islands for work (accountant specialising in insolvency/liquidations) and started renting out Five Dock (heavily negatively geared). Bought a 4 br house at Ermington, NSW in 2013 (parents live there, so with no rental income also negatively geared). In 2015 bought a 1 br condo in Cayman Islands (PPOR).

Now I have set up a family trust in Australia, and have purchased a house and land package (through a mob called Cashflow Capital) at Hervey Bay, QLD, land has settled and building work about to commence. Will be duel occupancy so will be positively geared (completion around Oct 2017)

I have been reading various articles, blogs, watching podcasts, etc. on property investing for a while now, and looking to vamp up my IPs, just haven't quite figured out how to do that yet. General strategy (a work in progress):

- buy a further 5-6 properties over next 10 years, sell a couple and pay off mortgages, retire on rental income;

- to do that I was planning to bring the portfolio into a more balanced mix of negatively geared and cashflow positive properties, however have been speaking to a BA (Metropole, subject of another post on here) who say only go after CG (negatively geared) properties and promote LOE (which, without fully understanding that, makes me a little nervous);

- also, I can work out whether, and by how much, a property is positively or negatively geared easily enough (once you eventually wrangle the info out of the real estate agent), but I can't work out how to obtain historical sales data for a property, or similar properties in an area, etc., and
calculate past, or estimate future, capital growth (I don't have an RP Data, etc., paid subscription)

- living on the other side of the planet I think I need to engage a buyers agent. As mentioned above I have contacted Metropole, but any suggestions (or ones to stay away from) will also be helpful (and I am slowing going through other threads on here re this)

Cheers
Phil

 

I'm intrigued, tell us more about the work you do in the Cayman Islands.

 

Biz, the work itself is not glamorous, is the same as any liquidator back in Australia, but usually with a couple of extra zero's added

 

Hi Phil,

I'd be speaking to a broker first and foremost as there's a few quirks to your scenario. Mostly, you need to get an idea of future borrowing capacity with the neg geared properties you hold - this could determine your strategy for you. Speak to a BA once you know what you're capable of.

 

That's a great idea Jess

 

Hi Phil
Welcome.
Yes please, tell us more, sounds very interesting.

MTR

 

Phil
Metropole I believe advocate blue chip property? Right?

 

@MTR needs an account in the Cayman islands to store all her positive cash from the USA.

 

that was going to be a personal PM...LOL reading my mind again

 

I think the IRS may have some FATCA issues re that. Besides, I find the hidden and misappropriated money, not do the hiding (but can probably refer some accountants)

 

From what I can gather so far only "blue chip" in inner suburbs of Syd + Mel, with a "twist" or someway to manufacture growth

 

I would suggest you consider the legal and tax side of your structure as well.

You are probably a non-resident of Australia so:

- No 50% CGT discount

- Foreign controlled trust

- Non-resident trustee?

- Director of trustee company resident?

- Negatively geared property but no rental income?

If your aim is to sell there would be a huge tax burden to contend with. Beware of taking ‘living off equity’ advice from a buyers agent too.

 

Thanks Terry, good thoughts - think I have this covered. I missed selling the former PPOR within 6 years (and avoid CG tax) so will just hold the two in my name for present / long term and not sell until a resident again (if at all), the other and next purchases in the Trust is an Australian resident trust with a resident director.

Yeah, the NG property with no income is a concern and thus my thoughts about looking to balance the portfolio

Noted re advice on LOE from a BA, and seeking further advice.

 

You probably already know that these markets have been booming since 2013?? Just something to be mindful of as you may be buying close to the peak, even if the property has a twist, wont stop a correction.

MTR

 

but my point was that you cannot claim anything if it has no rent coming in.

 

They can't trace @Phill74 - he's in the Caymans

 

unfortunately still need to lodge a tax return in Australia every year

 

and I'm pretty sure Malcolm Turnbull knows where Cayman Islands are