Here is the Argument for Refinancing and never Sell

From my reading, I think @Gockie is saying that if her sister sold the property today, she would have made another $250K+.

 

Also selling means retiring debt, and in the current environment there isn't the same options to get that debt 'back' for the next investment opportunity.

 

That's assuming you achieved that debt prior to "current environment"

 

We don't need to look at Europe this happens in our own backyard, look at the markets that are currently falling/corrected... Perth, Darwin. In downturn no suburb is immune to correction, graphs will never tell you the full picture, you need to look at growth annually.

MTR

 

With the internet it is easier to search and find properties outside your local area but I wouldn't agree that there are more investors than say 10 years ago (probably more).
It may seem that way to you because you are on a property forum and networking with like minded people. But ask people where you work if they have IP's and you'll find very few. Also if you live in an area that's in a boom there are ads and property shows galore. In a slump it is different.
It's like when you buy a certain car, you see lots of them. Or if you are pregnant you see pregnant people everywhere. It's just that your focus has changed.

 

Unless you believe in timing the market (like I do) and timing buys and sells such that the gains locked in by doing so outweigh costs of doing this.

 

^^^ this. And an investor with limited resources may not be able to take their step without selling a property that has increased substantially but is negatively geared.

 

Another factor is that you often want to flip properties that you can generate a one off gain from i.e. buying below market value, renovations, subdivision to crystalise the lumpy capital gain. Every year that you continue to hold the property reduces your average capital gain over the holding period. That is assuming you have another project you can undertake with a similar value add that outweighs the buy and hold capital gain you would have got.

 

Yep, I agree. Think about why you bought it. Just do whatever you needed to, and hold for 12 months to get the 50% CGT discount. Take the profit, and do another project.

I think if you do it all the time you might then be classified as running a property business though.

 

If you structure in trust you pay 30% tax

 

This is what I do

I was a buy and hold investor when I started. I would never go back to Buy and hold, more money as an active investor and you open more doors/opportunities

 

I don't understand. If it is a discretionary trust, why wouldn't the trustee make distributions to zero/low tax paying beneficiaries.

Isn't that one reason why one sets up a trust in the first place?

 

As the old saying goes, NEVER say NEVER.

When you get older and you retire with a massive property and share portfolio, I bet you become a B&H investor again.

You most likely will want to enjoy the fruits of your labour. I am walking this path and the fruit is bloody nice and sweet.

The last thing I would want to do is be an active investor. That is so last century for me.

Each to their own.

 

yes we do and another strategy put money into smsf, I am not a tax expert leave this stuff to my accountant to sort out

 

What!?

Companies pay 30% tax, not trusts. Trusts generally pay no tax as the income is distributed. It is recipient of the income is taxed and the trust icome will be added to their other taxable income and taxed at their marginal tax rate, plus medicare.

 

I did retire 9 years ago at 47.

I then went on to USA check out some of my properties on media and became a property developer 3-4 years ago.

I do have a nice size property portfolio in Australia/USA, but I trade and I don't call this a job, it's my hobby, not without stress but I love what I do, otherwise I would not do it. Different strokes for different folks.

Trading does not mean I sell everything, you need to retain assets to also generate income and grow net worth

 

I leave to people like you, my acct sorts this out, I have clearly stuffed it up...but we don't pay more than 30% tax and distribute

 

Can a discretionary trust make a 'distribution' direct to a SMSF or must it make the 'distribution' to a beneficiary who makes a 'contribution' to their SMSF?

 

I rest my case .

 

In theory a trust could distribute to a SMSF but it would be non arms lenght income and there would be lots of issues.

In MTR's case the trust probably distirbutes to an individual who then contributes to the SMSF.