Property Investing/ Property Advice: Series 7 of 7; Series 7: Your Property Team: Part 1

I believe you must engage a Buyers Agent with every property purchase, Using a Buyers Agents/Buyers Advocate and Property Advisor is key to more property investment success. These are extracts from my latest book “The Australia Property Investment Handbook 2018-2019″. In all good book stores now. Also Read Property Finance Made Simple and Property Investing Made Simple. Property investment, using buyers agents/ buyers advocates, is so important, and if looking in Melbourne for example, you should look for Melbourne Buyers Agents or Melbourne Property Advisors. We also service NSW and QLD, so look for Sydney Buyers agents and Brisbane Buyers agents, and QPIA advisors

Investment strategists, property investment, buyers’ agents, Melbourne buyers advocates, Melbourne Buyers Agents, Melbourne Property Advisors,

 

 

Sydney Buyers agents, Brisbane Buyers agents, QPIA advisors, Property Investing Made Simple, Property Finance Made Simple, Investment strategists, property investment, buyers agents, Melbourne buyers advocates, Melbourne Buyers Agents, Melbourne Property Advisors, The Australia Property Investment Handbook 2018-2019,

 

Before reading on, here is a useful link to some capital gains considerations and information to discuss with your accountant.

 

http://rfegroup.com.au/capital-gains-tax-simple-calculation/

 

 

YOUR PROPERTY TEAM

 

 

The importance of having a team around you cannot be overstated. No one has enough knowledge to wear every hat needed in a property purchase situation. It is naive for anyone to think they can do it all themselves. I will list the team in order of when you need them; some will naturally overlap, as it is not a perfect sequence.

 

RULE: Use a good conveyancer/lawyer, one that will help you fill in the contract. A lawyer is often better as they can provide legal advice. A conveyancer, unless they are a lawyer, is limited in the advice they can provide.

 

  1. Accountant

Make sure yours has initiative. Even more importantly, ensure that they specialise in investment property, or at least have adequate knowledge.

Benefits of an accountant are as follows:

  • Determination of whether you buy in a trust name, company name or your own name.
  • If in your own name, determination of the percentage of ownership split between all purchasers. Given the higher income earner will normally pay more tax, if you have someone not earning an income with a high percentage of ownership on title you could be paying unnecessary tax.
  • Help avoid purchasing too many negatively geared properties, as there could be no tax advantages in holding more than one or two negatively geared properties, as it could place their income below the tax-free threshold and result in a negative outcome.
  • Correctly determine how any costs for renovations be apportioned. Many people make the mistake of incorrectly claiming costs in their first tax return rather than the costs being apportioned as capital costs.
  • A good accountant can ensure you don’t miss out on claimable items for extra tax deductions.
  • The accountant will help you look after your investment property, which is best done from day one, by minimising holding costs and helping ensure the property is more affordable.
  • They help you plan your money more effectively in order to have a balance with your property ownership and any changing interest rates and the effect of the interest rate on the property. I’ve seen people buy in a company, but not realise there are absolutely no capital gains tax concessions. At least in their personal name they are entitled to a 50% tax concession on capital gains tax, if they own the property for more than 12 months.

 

Many people do not realise that by being entitled to claim depreciation on the property, they will end up paying more capital gains tax when they sell. Notice I say, ‘entitled to’ whether they claim depreciation or not, they will pay more capital gains tax if there were any claimable depreciable items during ownership of the property. Depreciating the building reduces the value of the building, which in turn widens the gap between its depreciated value and the sale price.

A quality property is not just about it doubling in value but it’s also about not having a property that is costing you an arm and a leg. Accountants can assist you with preparing a profit and loss schedule, and a PAYG withholding variation (if applicable).

Do not use an accountant that receives kickbacks from referring you to someone selling properties – that accountant is no better that the dastardly spruiker.