ackack Posted May 24, 2014 Share Posted May 24, 2014 Anyone done buy to let? What are your experiences? Where in victoria would you invest? we are thinking of splitting our money on smaller private house and one to let out. good idea or bad? Link to comment Share on other sites More sharing options...
Petals Posted May 24, 2014 Share Posted May 24, 2014 Depends how much money you have. Best buy to lets do not come cheap. Need to work out the rent return on the investment. Suggest you talk to a property expert. All property is very expensive in Melbourne so when you say a small cheaper house to live in, what is your budget, you would need probably 4 - 5 hundred thousand for a newish house in the burbs. Link to comment Share on other sites More sharing options...
rosiew Posted May 25, 2014 Share Posted May 25, 2014 I get the sense that buy to let landlords in the UK expect a greater return than you will get in many parts of Melbourne - most people here are looking for capital growth rather than expecting the rent to pay the mortgage. Having said that if you are after rent that will pay off the mortgage you can look at country areas. Ballarat for example has high rents compared to house prices and a lot of people invest in regional cities like that with great success. Link to comment Share on other sites More sharing options...
Marisawright Posted May 25, 2014 Share Posted May 25, 2014 Anyone done buy to let? What are your experiences? Where in victoria would you invest?we are thinking of splitting our money on smaller private house and one to let out. good idea or bad? So, do I take it that you're moving to Australia and thinking that instead of buying a house to live in, you're going to buy a smaller place to live in and another to rent out? I'd say it's a very bad idea, until you've been in Australia for a while and you're sure you're going to stay forever. As others have said, it can be hard to make a good return on an investment property, and what makes it worthwhile is the capital gain on the value of the property. Unfortunately, Australia has Capital Gains tax. The trouble is, the tax is different depending on whether you're resident or non-resident in Australia. Say you've bought the rental property but you decide to go back to the UK. You sell the property before you leave Oz. That means 50% of the profit gets added to your income for the year, and is taxed accordingly. It's likely you'll lose about 30% of your profit in tax - but it could be worse, if it pushes your total income into the next tax bracket. Say you want to avoid that tax, so you keep the property. That doesn't work either, because you'll have to pay 30% tax on your rental income - and you get NO tax-free threshold (this is Australian tax, not UK tax). Also, when you eventually sell, you'll be taxed on 100% of the profit instead of just 50%. Link to comment Share on other sites More sharing options...
pbishop Posted May 25, 2014 Share Posted May 25, 2014 Suggest that you speak to an Investment adviser. Depending on how much you earn, there are tax breaks by negative gearing, but its too complicated to explain on a forum page. If you're looking for capital growth, get advise, and be prepared to go for something that's not very sexy, and may be in regional victoria for best returns (again speak to an adviser). I'm happy to recommend a guy that we've dealt with in the past who was really good. He'll actually come to you, and provide a complete financial healthcheck (including advise on investment property). From memory, I think he charge around $300 for the initial report, but we saved 10 times that with the advise he gave. Happy to share details. PM me if you want an intro. Link to comment Share on other sites More sharing options...
rosiew Posted May 25, 2014 Share Posted May 25, 2014 Also bear in mind that you will need to qualify for finance. I think I'd just get here first and decide where you want to live rather than just seeing it as an investment. You could find yourself owning two poorly appreciating cheaper houses in an area you don't particularly like by splitting your assets. Remember that your house is a great tax free investment and you get to enjoy it. In Melbourne property in the inner suburbs has tended to increase in value over the years - but the entry price is high. There are now quite a number of suburbs in Melbourne with a median price well over a million. Link to comment Share on other sites More sharing options...
ackack Posted May 25, 2014 Author Share Posted May 25, 2014 We couldn't afford a buy-to-let in Melbourne. We'd look at Bendigo or Ballarat, or perhaps Bacchus Marsh. at the moment we're just playing with ideas, to see what might be possible. I will definitely look at a financial adviser, especially if the selling isn't straight forward, in terms of which tax to pay... Link to comment Share on other sites More sharing options...
julesktm1 Posted May 25, 2014 Share Posted May 25, 2014 We have bought but in Western australia we knew where we wanted to be based though. We wanted to start some sort of credit rating. We have been so lucky with both our tenants and real estate agent we will move into the house when we move. Best of luck xxx Link to comment Share on other sites More sharing options...
Marisawright Posted May 25, 2014 Share Posted May 25, 2014 We couldn't afford a buy-to-let in Melbourne. We'd look at Bendigo or Ballarat, or perhaps Bacchus Marsh. at the moment we're just playing with ideas, to see what might be possible. I will definitely look at a financial adviser, especially if the selling isn't straight forward, in terms of which tax to pay... Ackack, I explained the tax situation in my earlier post, did you read it? You don't get to choose whether to pay British or Australian tax - you'll pay Australian tax on your investments in Australia, whether you're a resident or a non-resident. If you're a resident you'll pay significantly more than if you're non-resident. I've just spent several weeks researching into it because we've been contemplating a move back to the UK Link to comment Share on other sites More sharing options...
ackack Posted May 26, 2014 Author Share Posted May 26, 2014 Ackack, I explained the tax situation in my earlier post, did you read it? You don't get to choose whether to pay British or Australian tax - you'll pay Australian tax on your investments in Australia, whether you're a resident or a non-resident. If you're a resident you'll pay significantly more than if you're non-resident. I've just spent several weeks researching into it because we've been contemplating a move back to the UK Yes, thank you, of course I read your post. And of course I can't chose where to pay tax, we will certainly be paying tax in Australia not the UK (plus we're currently not living in the UK but mainland Europe). I will be looking at a financial advisor closer to the time. That way I will have a much clearer picture of what to do with our money especially if buy-to-let isn't a good idea. I will also find a forum that is purely about investments and monies, rather than being on a general forum. I had just wanted to stick my feelers out and get a quick overview. I should have asked which reputable website and government websites are good to get information from rather than phrasing my question how I did. (The part about Melbourne was in reply to many people on here speaking about Melbourne.) Link to comment Share on other sites More sharing options...
Marisawright Posted May 26, 2014 Share Posted May 26, 2014 Good point, here's some that I found useful: http://www.realestate.com.au/blog/property-depreciation-101/ https://www.ato.gov.au/General/Capital-gains-tax/In-detail/International-issues/CGT-on-foreign-residents,-temporary-residents-and-changing-residency/ https://www.ato.gov.au/Individuals/International-tax-for-individuals/Investing-in-Australia/Investing-in-Australian-property/ Link to comment Share on other sites More sharing options...
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