News.com.au 4 homes by 32

I agree that well done to her for taking the plunge and investing while other people were sitting on the sidelines. I like the fact that she kept her expenses down and have strategies in place for when her loans are converted over as PI loans.

Not sure if her portfolio consists of just units or a mix, but personally for me I am not a fan of strata complexes and believe in land value more than anything, but a Bondi unit that sold for $2.5 million.
Is this Australia’s most expensive unit?

 

I guess so, but no guarantees on that one. Could be a noose around her neck for a long time to come. If she is able to work hard enough to service them all and eventually positively gear them on all repayments then good on her and she will be better for it in retirement.

 

That's not close to the most expensive - have a look at this: Crown Resorts scores jaw-dropping $40 million for level 61 apartment at One Barangaroo

 

I don't just start gushing because on the surface they have done well - I want to know more so I can learn and grow. That involves asking questions, trying to get more information, and analyzing the what is presented. That may come off as "trying to rip apart her story" if the facts are a bit thin and dont stand up to the sniff test...

Cheers,
Inertia

 

Now that is gold.

Too many people are given credit to just jump in and invest.

There is not carefully considered strategy...no what if scenarios done....so when people ask the detailed questions or probe it is seen to be tall poppy syndrome.

I for one have advised some people to sit on their hands...particularly if they only have capacity for 1-3 properties...they are going to have to make each purchase count..which means they need to get it right first time...otherwise their purchase will hold them back for years...

 

But even more people over-analyse things and end up with analysis paralysis especially for someone starting out.

It's rare to find someone that will get it right the first time. That's how we all learn, by making mistakes.

Talking about mistakes, when I bought my first property I did not even realise there was no cook-top or oven in the kitchen. It came with a portable stove. I felt like the most stupid person in the world lol but yeah we all learn eventually

 

Yes...you will make mistakes...but the issue is not to make the mistakes over and over.

But if you went merrily along the way and say your bought 4 overpriced units in say Melbourne or Brisbane...you will never recover....that was my point.

Things like no oven and portable stove might sound big but small in the grand scale of things.

 

Yes that's true but we can't know without hindsight that the units are over priced. If she paid market value then it's market value. If this same article was written back in 2012 right before the boom, we would get the same tall poppy responses no?

I remember back around that time, there were many news articles about Sydney property being overpriced and unsustainable (remember Steve Keen?). Same as now. No one can predict the future.

 

This was not Sydney...it applies to mostly....Melbourne and Brisbane.

No skin off my nose....lots of people will feel the pain in the next few years...some people who bought in Sydney have no idea about CF..when the IO period runs out...the land taxes ratchet up...and rents stablilise...it will get interesting....as I said most people are like frogs they sit as the water boils...and then it is too late...

 

What I dont like about these articles is that (done by the person or journalist I dont know) but buying a few props, and 1 minute later theyre all giving advice on finance, strategy, legal, investment

buying a few props makes you a investor, not an expert on anything else

 

Or the BA in an advertorial article who has never bought a property herself...

 

Doesn't matter where you invest, you will run into the same issues if you own multiple investment properties.

Where can I get 30 year IO loans ?

Land tax can be minimised in NSW by buying in different entities. She's got apartments so land value won't be that high. One in joint names and the other two in individual names would mean she would be paying under $1k land tax or probably no land tax at all.

 

Land tax can only be minimized under a company in NSW...trusts land tax applies from the first dollar.

She is spread out...so no land tax in VIC, Qld...but in Canberra land tax applies on all rental properties.

You can't get 30 year I/O..I grabbed a lot at 15 yrs I/O maximum term now is mostly on 10 years.

 

No I don't believe that's correct. A few years back I worked out the numbers based on examples on the OSR website. You can indeed reduce land tax in NSW by buying in different entities in individual names.

Edit: found a link that explains it. YIP mobile

 

Land tax | Revenue NSW this explains it....from what I am reading companies treated like individuals trust not...

 

Umm no not really.

Did you read what I linked? I have multiple properties in Sydney and can confirm that's how it works. There was an example on the NSW OSR page thatbshowsthow its calculated. I go through my land tax calculations and I can tell you if i did not put the properties in different names/entities then iiwould have to pay over $10k more in land tax.
"

1. Buy properties using different buying entities

The third option is to buy the four properties in different entities. Looking at this option, say Jack and Helen Scott had four properties. If Jack owned one, Helen owned one, they owned one jointly and the fourth was owned under a trust then again, there would be no land tax as there are four different entities owning the properties. "

 

Yes get that...but most trusts pay land tax on the first dollar. I get the but about different entities issue is trusts....

 

Companies get their own threshhold same as an individual. So you can buy properties in the company/trust up to the threshhold and not pay land tax.

But, you can only do this once, as further corporate trustees/companies fall afoul of the related companies proviso, and will pay land tax from the first dollar. They may even be aggregated so pay a higher rate from the first dollar.

Double check with accountant as may have changed since I last looked into it

 

That's true. How can we as investors adopt this going forward? Apart from the interest rate being slightly higher than standard loans, what are the downsides? Assuming one can pass serviceability, wouldn't it be much better to refinance all loans to an LOC to avoid the P & I cliff and not have to worry about it again ?