What's your prediction on the Australian Dollar?

[drsmithy]

However the problem is that there are only so many loss producing properties one can support, after a while you can't earn enough money.....

Yep.

Which is why there's going to be a bloodbath as unemployment rises in coming years.

The tax rates unfortunately simply take too much of a big capital gain when all realised at once wheras cash flow can be managed effectively.

? CGT taxation in Australia is pretty low. It's one of the reasons people are so obsessed with property.

 

[JohnK]

No one is ever going to convince me that buying CASH FLOW POSITIVE property is not a smarter way to go. Capital gain is fine until you sell and the ATO holds out its hand. I would rather have a higher rate of return to convert to other currencies as I travel along the way and less capital gain to realise at the one time. Just me, others would see differently.

Owning property is too easy. You need to see it as an income source in retirement. No need to sell the property and if you really want to sell then wait until you are retired and sell into an annuity or allocated pension if you must.

And in my opinion the Capital Gains Tax on a $350,000 sale where the property cost $175,000 is next to nothing if you have little other income.

Either way I am miles in front of where I would have been had I invested solely into super.

 

[cove]

After about 30 years I only have gut feelings about the $AUD versus the $US.
Nothing more than that I am afraid to tell you.
Just trying to buy when it is up and if necessary sell it when it is low. Currently running with 0.94 money due on Friday will get sent to the US as a free transfer. My US Bank will clip $30 US from the funds because they can.
I will pump the money thru 2 or 3 US credit cards and make a stack of frequent flyer points and then do Groundhog Day next month.
It is just a game so play on.

 

[sumthinfornuthin]

Owning property is too easy. You need to see it as an income source in retirement. No need to sell the property and if you really want to sell then wait until you are retired and sell into an annuity or allocated pension if you must.

And in my opinion the Capital Gains Tax on a $350,000 sale where the property cost $175,000 is next to nothing if you have little other income.

Either way I am miles in front of where I would have been had I invested solely into super.

The tax is still around $ 60K unless you can split it with SWMBO...why sell ??....I agree....DON'T SELL, keep leveraging and live on the rent

 

[JohnK]

The tax is still around $ 60K unless you can split it with SWMBO...why sell ??....I agree....DON'T SELL, keep leveraging and live on the rent

I think tax will be a lot less than that taking into consideration buying and selling costs but you are right. Why sell? Easy income and if you split income into 2 then even easier.

 

[cove]

We have been selling off a property every 2 years so we don't get left stuck with something when we are too old to manage it. It does trigger capital gains tax but that applies at a concessional rate which could no longer apply some time in the future.
Everyone has different circumstances and I can tell you we are happy to have a little less property and a lot more money in shares and bonds where the entry and exit costs are incredibly low. You can sell something on Monday and have the money back in your account on Friday for a cost of 0.1%. You cannot do that with real estate.
We make sure that we have enough English pounds and US dollars for a year as lifestyle gets the nod over everything else.
My latest purchase of US dollars at 0.94 will go off to the US on Friday and if the $AUD goes up to parity yes I will buy some more.

 

[Deleted member]

Owning property is too easy. You need to see it as an income source in retirement. No need to sell the property and if you really want to sell then wait until you are retired and sell into an annuity or allocated pension if you must.

And in my opinion the Capital Gains Tax on a $350,000 sale where the property cost $175,000 is next to nothing if you have little other income.

Either way I am miles in front of where I would have been had I invested solely into super.

Unless you bought property through your super fund

 

[JohnK]

Unless you bought property through your super fund

Apologies. Your own managed funds excluded.

My very small superannuation nest egg has still not reached the level of 2008.:shock: How are you supposed to retire on super? For many years the super companies conveniently used to look at the past 20 years performance. Now they conveniently only look at the past 5 years. Until the next crash.

Thieves. Like the big boys club.

 

[DaveB]

I have always felt rental property works best for PAYG earners.
Business owners of small - medium companies need to weigh up their overall risk levels, not just leverage having seen too many sole trading friends lucky to end up keeping their shirts and marriages.
The combination of owning the business premises through a super fund, owning the business in a family trust, (selling to the trust after 10 years also works) being paid via fully franked dividends together with making personal tax deductable super contributions has produced very nice results for our family.

 

[drsmithy]

I have always felt rental property works best for PAYG earners.

The big problem with rental property as an investment in Australia, is that the property bubble means net yields are absurdly low (mostly negative, in fact) unless you were lucky enough to buy in 10-15+ years ago or have enough cash to buy the property outright. And if you have that kind of cash lying around, you get a better yield from a high-interest savings account, without any of the accompanying risks.

 

[cove]

With thousands of jobs vanishing in Perth rental vacancies are being let in some cases about $100 to $200 per week less than 12 months ago. For landlords who bought and negatively geared their losses would be growing quite a bit. One of my friends has an apartment that is coming vacant after 3 years at $900 to $950 a week and he will want to sell if he cannot get a new tenant.
Western Australia is shuddering with the currency at 0.94 as our State has to sell the stuff we dig up or process and that is running roughly.

 

[Cruiser Elite]

The combination of owning the business premises through a super fund, owning the business in a family trust, (selling to the trust after 10 years also works) being paid via fully franked dividends together with making personal tax deductable super contributions has produced very nice results for our family.

And the absolute icing on the cake is for the Super Fund to have its own merchant facility and the above market rate monthly rentals earning FF pts as the funds wash through - sweet as pie.

 

[rocket256]

Whats the restriction on buying commercial property through a SMSF and renting it to your own company? Does rent have to be the market rate or can it be $1 a week?

 

[DaveB]

It would need to be market rate. You could though structure the lease starting low and increasing dramatically in later years if cashflow an issue.

 

[whatmeworry]

Wow, reading all the tax break loopholes, no wonder generation now has to pay for generations past.

 

[amaroo]

Wow, reading all the tax break loopholes, no wonder generation now has to pay for generations past.

Being married to a CA specialising in tax and SMSF comes in handy. Amazing how things can be structured and the benefits that flow from that.....

 

[drsmithy]

Wow, reading all the tax break loopholes, no wonder generation now has to pay for generations past.

Indeed. Contemporary Australia is very much a tax rort nation - and that's after already having some of the lowest taxes in the developed world.

But it's considered far more just to condemn the unemployed under-30s to poverty and pay rich women to have babies, than try to fix confected budget problems by addressing them.

 

[amaroo]

Indeed. Contemporary Australia is very much a tax rort nation - and that's after already having some of the lowest taxes in the developed world.

But it's considered far more just to condemn the unemployed under-30s to poverty and pay rich women to have babies, than try to fix confected budget problems by addressing them.

LOL - I agree! The amount of people NOT paying tax in Contemporary Australia is a joke. The chart is out of date.....it's got worse!

 

[sumthinfornuthin]

I think tax will be a lot less than that taking into consideration buying and selling costs but you are right. Why sell? Easy income and if you split income into 2 then even easier.

working on 40-48.5 c in dollar at marginal levels

 

[sumthinfornuthin]

Whats the restriction on buying commercial property through a SMSF and renting it to your own company? Does rent have to be the market rate or can it be $1 a week?

market level or look out !