I did it! - second property on the way

[En1gma]

So, we had finally bit the bullet after 6+ months of research.

Today, we made an official offer on a second property and I am so stoked, happy, excited yet nervous! All at the same time. I am already planning on how to decorate it.

So IIS, who has been down this path before? Any tips will be valued immensely!

P.S - I now have a clear backyard with 75% view of the skies and space for a *cough* observatory/pier *cough* - Lets just hope the second half does not understand these blue prints.. :lol:

Rob

[PCH]

Hi,

It's not clear from your post exactly what your plan is. Are you planning to live in both from time to time, - or are you going to be renting one of them to tenants?

[En1gma]

Hi Paul,

I will be renting my existing and living in the new house.

[bojan]

Congratulations! :thumbsup:

I did the same last August. my future residence is in Seymour, VIC (quite dark, compared to Mt Waverley !! )

It is rented at the moment.. when retirement time comes ( hopefully in a 2-3 years but one never knows what will happen and when.. ) we are going to live there.
The plans for 2.3 metres Sirius dome are already on the table ;)
There will be a space in a shed for workshop as well ( with mini lathe and milling machine).

[PCH]

Hi Robert,

well done! Welcome to the world of investing.

What decided you to go for this particular house?
Is the new house old/new?,
What distance from cbd?
What suburb?

If you still have a mortgage on your present house, don't forget to vary your PAYG tax if it's negatively geared once it has tenants installed.

Whoops, edit: I just realised you've only put the offer in so far. Let us know when it's been accepted hey!


Cheers, :thumbsup:

[En1gma]

Hey Paul,

As my child is growing up, we wanted to have a house to let him grow up in and also because it is close to his intended primary.

The townhouse itself is brand spanking new and is ~14km from they city (silverwater/newington)

Thanks on the tip for PayG. It will end up slightly - geared so will have to remember that. Dont want the tax man knocking on my door.

As for the offer, it was accepted today so, now it is just a matter of paperwork and settlement. Now to go shopping for a pier.. I mean sofa...

Rob

[OICURMT]

Similar to my story... purchased 35 acres in the foothills of Colorado back in 2000. I rent it out to graze cattle, thus my taxes are only U$2/yr. Plan on building as well on the top of the hill we have on the property. I'm 11 miles from the nearest town (pop. 620).

Retirement is still a few years away, but the dream is alive.

OIC!

[PCH]

Rob,

regarding the -ve gearing, the payg variation I mentioned means you'll pay less payg tax. You can claim the difference between cost (meaning the part of your repayment that is interest as opposed to capital - along with any other routine costs) versus income (meaning rental income) as a deduction against your personal tax (assuming the property was bought in your personal names).

You need to take care to get it right though. I mean, for example, that if you've bought the property as Joint Tenants on the offer, then only 50% of the deductions are yours, and 50% go to swmbo. You should talk to your accountant as it may differ slightly from state to state, but I'd think these basic details would be the same.

Cheers :thumbsup:

[PCH]

OIC,

wow, that sounds way cool :thumbsup:

Will there be any problem either building (being so far from any substantial town), or borrowing any funds that may be necessary, as you'd need to borrow from a US bank presumably. Are water and electricity likely to be available?

Sounds like a great idea though :thumbsup:

[OICURMT]

I will never understand how you can make money by losing money... Australia needs some tax reform in this area. In the USA, any interest you pay on your primary mortgage is directly tax deductible. Investment properties are DD&A'd over 18years.




Utilities were put into the area in 2002. There are 44 x 35acre plots in immediate vicinity. I'm the only one with plans to build an observatory. I chose the place because the local covenant requires compliance with the "Spirit of Dark Skies" lighting, using the IDA as a guide. On the downside, my dome must have earth toned colors, so white's out, but I can go with a light tan. Building is not a big deal, as just over the range is a city of 25000 people (about 45 miles away by road to the north).

The area is one of the last in Colorado near civilization that still has dark skies. The deep Rockies of course still have clear black skies, but I figure that once I retire, I want to be close enough to get medical attention if requires (15 minutes for an ambulance to arrive).

The missus and I did look at some acreage near Cloudcroft New Mexico, but to be honest, there were too many scientist living in the area (a lot of physicist of every type plus more...) due to its proximity to Alamogordo. Don't get me wrong, I love science like the passion for my better half... but to have only one primary/core conversation for the rest of my life? (Yes, did take time to have friendly chats with everyone in the area... I definitely would be the "Life of the community" if I rolled in ... http://www.iceinspace.com.au/forum/../vbiis/images/smilies/lol.gif )

OIC!

[tlgerdes]

Do you own your existing home? Or is it still a mortage?

We had an investment property in my wifes name that we had paid off completely. To finance a knockdown rebuild of our existing home, my wife sold the investment to me, I took out a new loan, Negative geared the "new" investment and my wife paid off the rebuild. :thumbsup:

Net effect, loan for rebuild the is a tax deduction.

[RickS]

We don't get the tax deduction on interest but we don't pay property tax either...

[OICURMT]

Technically you are correct, but you have something similar. Council rates, generally made up in two parts. 1) Services (which is not a "tax") and 2) General (which is, as it is based on the value of the property and so you might as well call it what it is... a "Rose").

[RickS]

Some similarities and some differences. Perhaps a miniature rose?

I'm sure we could improve our housing policies and taxation regime, but at least they haven't started a global financial crisis recently :)

[OICURMT]

Ha ha ... gotta admit us yanks are aggressive at everything and are willing to take risks. I blame Clinton and his "wonderfully" flawed bill that allowed banks to lower the lending requirement in order to allow poor people to buy homes (thus the sub-prime angle). Bush and Obama were left holding the bag. Bush made thing worse by spending WAY to much on the war. Everyone came on board to the new style of ARM's (Adjustable Rate Mortgages) and BOOM! ... we sneezed.

Old adage still holds true though, "When the U.S. sneezes, the world catches a cold".

OIC!