iPropertyCo :: User Community - Recent Posts http://www.ipropertyco.com/forum/recent.aspx iPropertyCo :: User Community - Recent Posts en-us http://blogs.law.harvard.edu/tech/rss Jitbit AspNetForum Fri, 23 Sep 2011 10:14:42 GMT Fri, 23 Sep 2011 10:14:42 GMT http://www.ipropertyco.com/forum/topic111-welcome-to-north-financail.aspx Topic "Welcome to North Financail" a message from North Financial Thank you for requesting contact from North Financial.

I'll be in touch with you shortly.

You can also contact me directly on the numbers below:

Nic Harrigan
Senior Wealth Manager
P 1300 490 964
M 0410 647 780
Sydney |Brisbane | Canberra | Melbourne | Perth
edited by North Financial on 24/09/2011]]> Fri, 23 Sep 2011 10:14:42 GMT http://www.ipropertyco.com/forum/topic108-new-zealand-tax-rates--1-april-2011-to-31-march-2012.aspx Topic "New Zealand Tax Rates - 1 April 2011 to 31 March 2012" a message from Admin
We are currently in the middle of updating the NZ tax rates and changes to the Earners Levy. The new rates can be viewed at http://www.ird.govt.nz/how-to/taxrates-codes/itaxsalaryandwage-incometaxrates.html

Income tax rates for every $1 of taxable income (excluding ACC earners' levy)
up to $14,000 - 10.5 cents
from $14,001 to $48,000 - 17.5 cents
from $48,001 to $70,000 - 30 cents
$70,001 and over - 33 cents
No notification - 45 cents

We will email a notification once the new rates have been applied to the Property Analyser.
edited by Admin on 6/07/2011]]> Wed, 06 Jul 2011 19:35:37 GMT http://www.ipropertyco.com/forum/topic107-australian-tax-rates-for-20112012-tax-year.aspx Topic "Australian Tax Rates for 2011-2012 Tax Year" a message from Admin
The tax rates for 2011-2012 have recently been published on the ATO Website. The individual tax rates remain unchanged, yet the Flood levy needs to be applied to these rates:

Tax Rates 2011-2012

Taxable income Tax on this income
0 - $6,000 - Nil
$6,001 - $37,000 - 15c for each $1 over $6,000
$37,001 - $80,000 - $4,650 plus 30c for each $1 over $37,000
$80,001 - $180,000 - $17,550 plus 37c for each $1 over $80,000
$180,001 and over - $54,550 plus 45c for each $1 over $180,000

The applicable Flood Levy rates are:

Taxable income Flood levy on this income
$0 to $50,000 - Nil
$50,001 to $100,000 - Half a cent for each $1 over $50,000
Over $100,000 - $250 plus 1c for each $1 over $100,000

The government has introduced a Temporary Flood and Cyclone Reconstruction Levy (flood levy) applying to taxable income for the 2011-12 year only.
It is designed to assist affected communities to recover from the recent natural disasters by providing additional funding to rebuild essential infrastructure - for example, roads, bridges and schools.

The flood levy will only apply to taxable income derived between 1 July 2011 to 30 June 2012.

You can view more detailed information on these rates at the ATO website:
http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/00216565.htm&page=7&H7
http://www.ato.gov.au/individuals/content.aspx?doc=/content/12333.htm

As of publishing this article, we have not posted these updates to the Property Analyser - we will notify all users via email once these updates have been applied.

Regards,
iPropertyCo Team
edited by Admin on 6/07/2011]]> Wed, 06 Jul 2011 18:20:38 GMT http://www.ipropertyco.com/forum/topic106-comparing-and-scenarios.aspx Topic "Comparing and Scenarios" a message from Admin
The Property Analyser will save the data you entered during your last session. In order to compare multiple properties, print each analysis as a hard copy or PDF. Then you can make a comparison. The result will print with the property address at the top, so this allows you to recall the property you analysed.

You only need to change the details in the Property & Depreciation and Income & Expenses tabs - Typically the Investor & Tax and Loan Detail will always remain the same.



We exclude the ROI due to the fact that people often measure it in varying ways over varying time periods depending on their strategy. Therefore it causes confusion. When comparing properties, focus on the metrics that matter - Cash Flow and Equity.

Regards,

iPropertyCo
edited by Admin on 20/01/2011]]> Thu, 20 Jan 2011 19:10:22 GMT http://www.ipropertyco.com/forum/topic106-comparing-and-scenarios.aspx Topic "Comparing and Scenarios" a message from barkemeyer Can I save properties to bring them up again later, i.e. to compare properties or scenarios?
The ROI is not provided - is there a reason for it?
Sven
edited by Admin on 20/01/2011]]> Mon, 17 Jan 2011 23:29:09 GMT http://www.ipropertyco.com/forum/topic104-a-builder-should-have-the-panache-for-building.aspx Topic "A builder should have the panache for building" a message from kenneth Everymanin this world probably dreams of owing a house of his own or ratherto have a house at least, which best suits his nature and character.In this case the house is a bit personified; in the sense that it actas a co-partner for the human. For many people in this world a househas become something more than a mere asylum. Many philosophers werealso heard saying that their houses speak to them. A house not onlyprotects human but also, it is a place which might be the onlywitness other than God, of almost all humanistic activities. A housemay not have life but it rather resembles of having the same and atthe same time sustains to have life in it.


Itis the builder who gives life to the dream of the customer whichmight be a mixture of many confused ideas and specifications. Thehard work, dedication, skill and the performance make a buildertrustworthy among the people. A good builder will always be consciousof his customers well being. Maintaining the productivity and thequality control also falls on the part of the builder which makes hisjob a bit risky as well. Above all for a good design to be born abuilder should have the panache for building itself.


Fora new BuilderWashington DC will be the wonderland of Alice, as he might find immense scope forhis caliber and exclusivity. Humans get easily accustomed with thenew house and thus it is the builder’s responsibility to create adesign at the convenience of the customer. Each and every square feetof the house should be maintained with utmost care and delicacy,which will add beauty to the house as a whole. To be a bitmetaphysical, when one, after his hot days toil returns back, thehome should welcome him with a smile. The design should be simple,which is mostly preferred. A good builder will always make thecustomer aware of the requirements and non-requirements. Thus aboveall it is the builder who helps in generating harmony in a house.
edited by Admin on 3/11/2010]]> Wed, 03 Nov 2010 17:41:33 GMT http://www.ipropertyco.com/forum/topic103-rba-raises-official-cash-rate--what-can-i-do-to-counter-the-impact-of-a-rate-rise.aspx Topic "RBA Raises Official Cash Rate - What can I do to counter the impact of a rate rise?" a message from Alex Barton
Regards,

Alex Barton
Australian Property Forum
edited by Alex Barton on 23/11/2010
edited by Admin on 26/11/2010]]> Tue, 02 Nov 2010 23:25:17 GMT http://www.ipropertyco.com/forum/topic99-subscription-rates.aspx Topic "Subscription Rates" a message from Alex Barton

Alex Barton
Australian Property Forum
edited by Alex Barton on 23/11/2010
edited by Admin on 26/11/2010]]> Tue, 02 Nov 2010 23:23:37 GMT http://www.ipropertyco.com/forum/topic103-rba-raises-official-cash-rate--what-can-i-do-to-counter-the-impact-of-a-rate-rise.aspx Topic "RBA Raises Official Cash Rate - What can I do to counter the impact of a rate rise?" a message from Admin
Statement by Glenn Stevens, Governor Monetary Policy RBA

The global economy grew faster than trend over the year to mid 2010. Global growth will probably ease back to about trend pace over the coming year as strong recoveries in the emerging world give way to a more sustainable pace of expansion and growth remains subdued in the United States and Europe. At the same time, concerns about the possibility of a larger than expected slowing in Chinese growth have lessened recently and most commodity prices have firmed, after a fall earlier in the year. The prices most important to Australia remain at very high levels, with the result that the terms of trade are at their highest since the early 1950s. The turmoil in financial markets earlier in the year has abated, though sentiment remains fragile.

So how will this interest rate rise effect my cash flow?

The impact on an investor's cash flow will vary depending on loan amounts and tax rates; on average values we've modeled, we'd expect the average investor to be loosing from $10 to $20 of cash flow per week. As an investor it's important that you assess the impact on your property by conducting a quick cash flow analysis. www.ipropertyco.com

What can I do to counter the impact of a rate rise?

Many investors overlook when their leases (rental agreements) expire and unfortunately most property managers are not proactive in informing you of the fact, or when you should suggest a rental increase. If you haven't already done so email your property managers with the following questions:
  • When is my current lease due for renewal?
  • Is my property currently rented at the market value? If so/not, on what basis have you made this assessment?
  • Can you suggest any improvements to my property that would attract a higher rent?

    • My Subscription Has Expired - is there an offer to renew it at the moment?

    In order to help alleviate the latest rate rise, we're offering an 80% discount on all subscriptions. Simply enter RENEWIPC into the payment page. This offer expires on the 8th November.


    Happy Investing!
    edited by Admin on 2/11/2010]]>     Tue, 02 Nov 2010 20:03:41 GMT     http://www.ipropertyco.com/forum/topic53-pre-tax-positive-cash-flow-property--prove-it.aspx Topic "Pre Tax Positive Cash Flow Property - Prove it!" a message from Alex Barton
    Alex Barton
    Australian Property Forum
    -----
    edited by Alex Barton on 23/11/2010]]>     Thu, 28 Oct 2010 11:54:22 GMT     http://www.ipropertyco.com/forum/topic102-empty-cache--discount-subscription.aspx Topic "Empty Cache & Discount Subscription" a message from Admin To ensure you're getting the latest version, you will need to clear your cache and browsing history. Here are some basic instructions:
    • Internet Explorer - Tools > Delete Browsing History
    • Firefox - Tools > Clear Recent History > select "Cache" and time range to clear "Everything"
    • Safari - Safari > Empty Cache



    Subscription Discount


    We'd like to ensure you get the opportunity to try the latest version, so if your trial has expired you'll be very happy to know that we're offering a 95% discount if you renew before this Sunday. For a 3 month subscription, you'll only pay $3.25. Yes a very generous offer! Simply log into www.ipropertyco.com launch the Property Analyser and follow the prompts and use this code WE34567.


    Do You Need Support?


    If you ever need support while using the Property Analyser, simply log your question as a New Topic under User Support / iPropertyCo Property Analyser within the User Community. We constantly monitor the User Community and will ensure you get a response within one business day.


    That's it for now - Happy Investing!!!]]>     Tue, 19 Oct 2010 08:23:20 GMT     http://www.ipropertyco.com/forum/topic101-usage-tips--depreciation.aspx Topic "Usage Tips - Depreciation" a message from Admin

    What is depreciation and why is it important? Well first of all I’ll explain depreciation. When you purchase an existing property (typically) you purchase land and the building is an improvement. The building is comprised of items that don’t last forever, in effect they break, rot erode or simply become outdated. Our tax system recognises this and therefore allows us to right these losses off.


    But how does property go up in value I hear you say? Well again from a tax perspective, the land increases value, the building deprecates.


    So why is depreciation so important? Well I suggest you log into the Property Analyser and look for yourself. www.ipropertyco.com/UserLogin.aspx


    Take a look at the cash flow on a building that is 1 year old, then change the Building Value (Actual) and Fixture Value (Actual) to $100 and see what the impact is on your cash flow; it can be quite dramatic. If your tax rate is high, you’ll notice that the impact is even greater. This effect is termed as gearing, the reason why
    many people with high incomes purchase new dwellings in order to take advantage of Negative Gearing.


    There are two types of depreciation, Capital Costs (Building Write Off or Division 43) typically anything that is structural and Fixtures (Plant & Equipment), typically anything that can be removed without the roof falling in.


    The iPropertyCo Property Analyser has the ability to provide an estimate for depreciation calculations and this is handy if you have not completed a depreciation schedule through a quantity surveyor, in most cases the estimates are close, but only a depreciation schedule will give you an accurate calculation.


    Completing the Building Depreciation Section: Tax Legislation relating to building depreciation changed significantly between 1985 and 1987. If your property was built in that period, pay special attention to the help (?) text to work out what selection you should make for Building Write Off. You have the option to use the estimates or actual fields.


    Completing the Fixtures Section: We have taken a very simplistic approach calculating fixtures depreciation. The challenge here is that our tax system provides a different depreciable rate for many items, so we simply provide an estimate based on averages. Again you can use the estimates or you can enter an actual figure and this will be averaged over the depreciable period. The Property Analyser uses the Diminishing Value method.


    If you ever get stuck, or have any questions, simply add a post to the help section of the User Community and we’ll reply within a
    day. www.ipropertyco.com/UserCommunityHome.aspx


    Happy Investing,
    The iPropertyCo Team....]]>     Mon, 30 Aug 2010 22:59:03 GMT     http://www.ipropertyco.com/forum/topic99-subscription-rates.aspx Topic "Subscription Rates" a message from Admin rudra wrote:
    If I get a subscription now, will it just add onto the time I already have left on my trial?




    Rudra,




    Yes we can add the subscription to your existing trial. No Problem.]]>     Fri, 13 Aug 2010 21:53:26 GMT     http://www.ipropertyco.com/forum/topic99-subscription-rates.aspx Topic "Subscription Rates" a message from rudra Fri, 13 Aug 2010 08:39:16 GMT http://www.ipropertyco.com/forum/topic100-usage-tips--property-tab.aspx Topic "Usage Tips - Property Tab" a message from Admin
    Before I go further I'd just like to say election, election, election; for no reason other than everyone else is talking about it. Actually I was having a chuckle to myself the other day after hearing the journalists complaining about this election being uneventful; I reflected on a trip I took to the Philippines a number of years ago now. It was during the senatorial elections and I saw a news paper headline that read - our safest election in years, I went on to read the article that explained that it was a safe election because there was only 127 election related deaths. I'm happy to experience an uneventful Abbott / Gillard election as long as no one dies.

    So moving to the Property & Depreciation Tab - unlike the Investor & Tax or Loan Detail tabs, if you are using the Property Analyser to search for a new property, you will be changing the content of this tab regularly. The first section "Property" is fairly self explanatory. It allows you to complete the address so when you print the results you will remember what property they relate to OR when you log back into the Property Analyser at a later stage, you know what property you last analysed. The State field is the most important here, it allows the Property Analyser to calculate the correct Stamp Duty. The stamp duty calculations for each state vary in some cases significantly, so to get an accurate result you must ensure the state selection is correct.

    "Hot Tip" the Property Analyser saves all your inputs each time you select the Property Analysis tab.

    The next section is "Purchase" this allows you to enter the purchase price and the dutiable value separately. For most properties these values will be the same; the exception would be a house and land package where you buy and settle the land, then build a house. For New Zealand properties you don't need to worry about the Dutiable Value field as you don't have stamp duty.

    Market Value - This section allows you to enter the figures that calculate your growth projections. I always keep on the conservative side when completing these fields and it's important that the data you enter comes from a reputable source. For Market Value enter the value that you're buying the property for unless you have a valuation that states otherwise. Don't get sucked into what agents tell you a property is worth, if you're ever unsure and want an extra level of comfort, get a licensed valuer to give you a valuation. It won't cost you much and you can use the valuation to negotiate from too.

    For the expected capital growth - well who can read the future? Use a source like Residex, RPData or Homepriceguide.com.au stick to the more conservative figures such as the last 10yr growth, but remember you are trying to predict growth and there no exact science here.

    Purchase (Capital) Costs - Capital costs are not tax deductible and differ from an expense that is tax deductible. A simplistic way to differentiate these costs is to ask, is this a one off cost related to the purchase of the property? If yes account for it here. When you sell your property you won't pay Capital Gains tax on the value of these items. For example Sale Amount - (Original Purchase Cost + Capital Costs) = Taxable Gain.

    Before I go - always get a building and pest inspection done if you are buying an existing property. Make sure you get a building inspector who can provide a quote to rectify any defects they find, this way you can negotiate the value off your agreed purchase price. If you're buying a strata or community titled property, make sure you get access to the strata reports as these will often outline defects or issues with the complex.

    Happy Investing...
    edited by Admin on 12/08/2010]]>     Thu, 12 Aug 2010 22:03:25 GMT     http://www.ipropertyco.com/forum/topic99-subscription-rates.aspx Topic "Subscription Rates" a message from Admin


    There's a 60% discount until the end of this month if you use our promo code:




    R8E78SW]]>     Thu, 12 Aug 2010 20:13:01 GMT     http://www.ipropertyco.com/forum/topic92-usage-tips--loan-detail-tab.aspx Topic "Usage Tips - Loan Detail Tab" a message from rudra Thu, 12 Aug 2010 15:03:21 GMT http://www.ipropertyco.com/forum/topic99-subscription-rates.aspx Topic "Subscription Rates" a message from rudra


    Anyone heard about if there will be any changes to the subscription rate for the property analyser?







    Cheers

    Rudra]]>     Thu, 12 Aug 2010 14:53:15 GMT     http://www.ipropertyco.com/forum/topic96-clarification-on-compare-others-page--real-estate-investor-not-investar-or-real-estate-investar.aspx Topic "Clarification on Compare Others Page - Real Estate Investor NOT Investar OR Real Estate Investar" a message from Admin


    This message is intended to clarify information on our Compare Others Page http://www.ipropertyco.com/CompareOthers.aspx.




    We have been alerted to the fact that the product name second from the right hand side of the graph shows up pixelated and on some browsers may look like it says Investar when it actually says Investor. Albeit coincidental, we have not reviewed Real Estate Investar in the comparison. The comparison was done on a product called Real Estate Investor. Just in case you missed the difference it's the AR v's OR.




    The comparison was conducted on the 01/10/09 and to our knowledge the Real Estate Investar (that's AR) product didn't exist then.




    All this aside, we stand by our service and Users; We are so confident that you'll find the iPropertyCo Property Analyser is the easiest to use and our service superior to any other product or provider that we're more than happy to list their names so you can try their products and make up your own mind. We're fairly certain that you'll come back to us either way.




    We're making enhancements to the Compare Others page that should avoid future confusion.




    Regards,

    The Team....]]>     Mon, 02 Aug 2010 23:56:47 GMT     http://www.ipropertyco.com/forum/topic92-usage-tips--loan-detail-tab.aspx Topic "Usage Tips - Loan Detail Tab" a message from Rickshaw I think I know the answer to the quiz.



    Paying the principal down greatly reduces your cash flow and from my calculations this might mean that where you could afford two properties on interest only, you could only afford one on Principal and Interest. The other effect is that it reduces your tax deductions and that impacts your cash flow as well. A double whammy some might say!???]]>     Mon, 02 Aug 2010 22:46:31 GMT     http://www.ipropertyco.com/forum/topic93-how-to-use-property-analyser-to-calculate-scenario-when-extra-funds-borrowed-for-rental-shortfall.aspx Topic "How to use "property Analyser" to calculate scenario, when extra funds borrowed for rental shortfall" a message from Admin stu wrote:
    Hello All,
    My plan was to borrow enough additional funds to pay for rental shortfall for years 1-3...but when I add this figure to loan #2, it automatically changes the figure of loan #1. It always essentially makes your loan specific to the price of the property..I am a newbie with this program..any tips anyone?



    Stu - Rickshaw is right in questioning your intention. If you add the amount your will borrow for the rental shortfall in the Property & Depreciation / Purchase (Capital) Costs / Other this would be the most appropriate work around. This way your depreciation amounts won't be effected and you can account for the interest associated in lending the funds. You should seek financial advise before finalising your decision.]]>     Mon, 02 Aug 2010 22:32:42 GMT     http://www.ipropertyco.com/forum/topic93-how-to-use-property-analyser-to-calculate-scenario-when-extra-funds-borrowed-for-rental-shortfall.aspx Topic "How to use "property Analyser" to calculate scenario, when extra funds borrowed for rental shortfall" a message from Rickshaw


    Firstly be careful of doing that. Basically you are capitalising payments and if interest rates go up the period you have to cover the shortfall will decrease. Additionally, you are buying on the assumption that you will get a capital gain to cover the capitalised payments OR that rents will increase enough to improve your cash flow position. Either way, its risky - I would assume thats why it's not catered for in the Property Analyser.




    If you are putting a figure in the Deposit field, you could try reducing that by the amount you intend to borrow to pay rent OR increase the property value by the amount you'll borrow. But the latter will effect your depreciation calculations. You won't get a spot on accurate figure either way, but would be close.




    You shouldn't buy anything you can't afford to service on the day of purchase and it might pay to have a finance professional explain the risks to you.]]>     Fri, 30 Jul 2010 19:44:15 GMT     http://www.ipropertyco.com/forum/topic93-how-to-use-property-analyser-to-calculate-scenario-when-extra-funds-borrowed-for-rental-shortfall.aspx Topic "How to use "property Analyser" to calculate scenario, when extra funds borrowed for rental shortfall" a message from stu My plan was to borrow enough additional funds to pay for rental shortfall for years 1-3...but when I add this figure to loan #2, it automatically changes the figure of loan #1. It always essentially makes your loan specific to the price of the property..I am a newbie with this program..any tips anyone?]]> Fri, 30 Jul 2010 14:46:10 GMT http://www.ipropertyco.com/forum/topic92-usage-tips--loan-detail-tab.aspx Topic "Usage Tips - Loan Detail Tab" a message from Admin
    There's an exercise that involves a quiz at the bottom of this email - if you respond to the quiz in the User Community we'll give you 3 months free access.


    One of the most important factors to consider when purchasing an investment property is your finance. Considering that interest charges are typically the largest cost in holding your investment, it's imperative to get your finance right. I could go on all day about finance, but to avoid doing that, I'll share two tips with you:

  • Use a broker with access to a large panel of lenders so they do all the ground work for you. The best thing about using a broker is after they have already written a loan for you, they have all your financial information and you don't have to dig it up again when you purchase another property or refinance. That saves loads of time.

  • It's important to get a good rate, but more importantly make sure you select a loan with low break costs. Personally I was stung on a loan that was under $200k and after having it for 5 years, I had to pay $3,500 to exit the loan and refinance with another lender. Most loans these days have very low break costs after 2yrs.
    • So back to my Usage Tips; when you first access the Loan Detail tab, you may be surprised to see that you can't edit the Loan Amount field and the figure in the field doesn't seem to relate to the price of your property, however it does. The way we calculate the loan amount looks like this:


    Total Purchasing Costs - Deposit = Loan Amount. Total Purchasing costs includes everything from stamps to legals, even loan costs.

    You then have the ability to split the loan amount by entering a figure into Loan B. This allows us to ensure that the total cost to purchase the property is accounted for and sits within loan A, B or Deposit. Another trick to be aware of is that the Loan Amount draws the purchasing costs from the Property & Depreciation tab, so make sure that tab is completed properly before you reference the data.
    The reason we provide a section for loan A and B (two loans) is; it allows you to account for varying interest rates you would typically expect when you draw equity out of an existing loan and use it for the purchase of the new property. This way you can easily account for differing interest rates OR a loan with a fixed and variable split.


    Special Note: Over the last two years Mortgagee Stamp Duty has been abolished in all states of Australia with the exception of one condition. Purchasing a property in New South Wales under a company structure. The broke as a joke NSW Government just couldn't let that one go. If this is applicable to you add the value in Other Loan Costs.



    So here's the quiz: In relation to holding an investment property, what is the drawback of having paying down the Principal as opposed to an Interest Only loan? Log into the Property Analyser and see for your self. Pay special attention to you Tax Credit and Pre/After Tax Cash Flows in the Property Analyser Tab.



    Respond on the User Community at this link.


    Happy Investing,
    Investment Property Co
    edited by Admin on 27/07/2010]]>     Tue, 27 Jul 2010 22:50:35 GMT     http://www.ipropertyco.com/forum/topic62-interest-rate-rise--when-to-fix-your-rate--if-ever.aspx Topic "Interest Rate Rise & When to fix your rate - if ever?" a message from Aussie Mon, 19 Jul 2010 14:09:24 GMT http://www.ipropertyco.com/forum/topic90-the-future-of-interest-rates.aspx Topic "The future of interest rates" a message from Aussie
    Whilst major banks like CBA are able to raise significant amounts of money from domestic savings, they still have to borrow money on the open market to meet total demand. One of the plus sides of the current cost of borrowing wholesale money is that the banks find it cheaper to raise their funds domestically. This has caused a war amongst the banks for "Term deposits". Look around and you will see many of the banks offering 6% or better on term deposits. When you consider that in a lot of cases they are lending it out again at about 6.75% they are not making much margin on their funds. If the Australian public stop saving and start spending again then the money they are able to raise will dry up and they will be forced to buy it "Wholesale" if and when this happens the margin pressure will probably see the banks increase their home loan interest rates out of step with the reserve.

    I think we are safe for a little while though as it is unlikely that they will attempt anything like this before an election. Stay tuned though, interesting times ahead.]]>     Thu, 15 Jul 2010 13:45:10 GMT     http://www.ipropertyco.com/forum/topic89-usage-tips--purchasing-structure.aspx Topic "Usage Tips - Purchasing Structure" a message from Admin

    Before I get into the detail, lets get one thing clear. I'm not providing financial advice because I'm not qualified to do so. Should you be in the market for an investment property, you should seek the advice of a qualified professional. If you're not having any luck finding a professional with experience in property investment, Michele Dodd of Conluceo Consulting is a Tax Lawyer and iPropertyCo User; feel free to contact her through this link.

    Upon logging into the Property Analyser, you will notice that it's laid out across six tabs, the first one being Investor & Tax. This tab allows you to outline what your purchasing structure will be. In most cases it only needs to be completed once, when you define your purchasing structure the Analyser will save your preferences for future use.

    The reason it's so important to get your structure right, is once you exchange a contract (generally speaking - because it varies state to state) you may be liable to pay stamp duty should you decide to change the name of the purchasing entity, in some cases even if the property has not settled. In all cases after a property has settled you cannot change the entity without paying stamp duties. So considering that the stamp duty on a $300k property in NSW would be est. $9,000 and add legals and applicable capital gains tax, you can see how getting this wrong could cost you a lot of money.

    So let me take you through a couple of scenarios:

    Jack and Judy are a young married couple with incomes of $150,000 each. Because they pay a lot of tax they decide to by a new property with a negative gearing strategy in mind. They locate a new townhouse in WA for $400,000 and rent is $400 per week. (I'm using averages for purchasing costs and expenses). Their projected cash flow in year 3 is -$1,852 or -$36 per week. However once they reach the third year of ownership Judy falls pregnant with their first child and leaves work expecting that she'll take a few years off as they start a family.

    Now that Judy has no income the negative gearing benefit from her portion of the property is gone and the tax flow decreases to -$5,184 or -$100 per week, a difference of $3,332 per year and assume Judy takes a few years off work the cost is multiplied.

    A similar scenario could be a person who owns negative geared property and then leaves Australia to work overseas, reducing their tax rate to 0 and forgoing depreciation benefits altogether. Using our before mentioned WA property, the investor could loose $6,664 per year in cash flow.
    The above examples relate to cash flow, but when it comes to situations where investors are buying with the intent to hold a property for a short time before selling, such as a renovating to increase value, the structure you purchase in is also very important as it may greatly influence the amount of capital gains tax you're liable for. The wrong structure could see you paying far more tax than you need to.

    These are some simple examples based on fairly common scenarios, when you start to look at more complex investment strategies like building a large portfolio with positive cash flow properties, the structure you set up will have an impact on your tax / cash flow position and your ability to borrow money.... but that's a discussion for another time.

    As a general rule, make sure you discuss your investment strategy with a professional, before you commit to purchasing an investment property. It's much cheaper to avoid making a mistake than it is to fix it.

    Regards,
    iPropertyCo
    edited by Admin on 14/07/2010]]>     Wed, 14 Jul 2010 22:41:43 GMT     http://www.ipropertyco.com/forum/topic88-service-disruptions--week-of-june-28th-2010.aspx Topic "Service Disruptions - week of June 28th 2010" a message from Admin



    We are rolling out a major update to the Property Analyser that includes many enhancements requested by our users. These include the two top requests, a single view Analysis Page - yes we've axed the scroll bar! and print functionality for analysis results.




    Thanks for your patience!]]>     Mon, 28 Jun 2010 20:52:56 GMT     http://www.ipropertyco.com/forum/topic87-ipropertycos-new-landing-page.aspx Topic "iPropertyCo's New Landing Page." a message from Admin


    We've set up a new landing page for iPropertyCo. This page will link to many of our online ads.




    http://www.ipropertyco.com/property_analyser_trial.htm]]>     Sun, 27 Jun 2010 18:47:49 GMT     http://www.ipropertyco.com/forum/topic86-rental-income-apportioning.aspx Topic "Rental Income Apportioning" a message from Rickshaw


    You should talk to your accountant about it. But the way I would approach this is:

    Firstly I would determine if the property was positive or negative. If it was positive I would transfer it into a trust that way the profits can be distributed annually to the person who may have the most favourable tax rate. Search Michele on this forum and you'll see a post with phone number of a tax lawyer I use who could set that up for you.




    If the property is negative its not as easy to work out what to do. Basically the current title should indicate the ownership shares and the losses/profits should be distributed accordingly. But it's not easy to change the ownership shares year on year to distribute losses. Michele set me up with a unit trust structure that allows me to absorb losses from a trust structure and perhaps the unit volumes could be changed to distribute losses annually, but there is a lot of work involved in that.




    Investing with multiple owners is never recommended and I wouldn't get involved with it as multiple parties' situations can change and managing the distribution of income and losses is a nightmare.




    If the property is positive go a trust, if it is negative, simply peg the losses against one person with the highest tax rate. Refinance the property and extract your equity portion through your own split on the loan then build your own portfolio that you have full control over. That's what I would do.




    Good luck...]]>     Tue, 27 Apr 2010 16:57:07 GMT