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Ideas... not advice

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Sounds like you are doing fine lindsayf, the last year should have crystallised your plan and shown that once in a lifetime events are happening much more often.
I still operate on a very conservative plan, which still allows for the worst and hopes for the best.
 
Still going to plan....with a very good dose of good luck.
Prepped it and Sold IP1 and got it unconditional just before we went into lockdown.
Sold after 3 days on the market. Got 4 offers all above asking price. Accepted 415 without conditions with 30 day settlement and they waived the cooling off period. They were investors from Melbourne I understand.
Very glad I stuck to my market assessment and not the agents. He would have put it on the market for 50k less than I insisted on.
Doesn't say much for the quality of the 'market professionals' assessment skills..but we all know they are more interested in a quick commission than the best price for the seller. In this case both were achieved - more or less.
 
well done , whether with it was good luck or not

enjoy
 
And yet another 2 years passes.
Second inv property sold. Another bought.
Yet another incompetent and unethical RE agent tried his best to under value the property by over 50K
Had to bully him up to get it into a reasonable asking price range.
Sold quickly in asking range at first open house and we are happy with the price and disgusted with RE agents generally.
If I ever sell again - I will do it privately.

Sold the property because we wanted to buy a townhouse across the river in NSW. Not happy with the idea of being a LL in Victoria anymore.

So here we are now - holding the PPOR (20acres out of town) and a townhouse which we may rent long or short stay.
Former has zero debt but leaving loan facility in place to access liquid funds for trading or life expenses.
Latter owned outright.
Both of us still working.

I do like that we are currently not paying any interest.

Dont know what the next step is or what the global economy may have in store. But I am positioned to deploy cash into the stock market if the opportunity presents.

We have done ok so far with property dealings.
But a $ now is not the same as a $ from 5 or 10 years ago.
 
Lindsey your post is an opportune time for me to perhaps add my strategies and findings.

Trading has always been a wonderful challenge and while making some good money Stocks and Futures is not something Id place over $500K in I personally have 2 other options which Pay way better and are less volatile.

I'm always keeping my future financial security foremost in mind.

Inflation erodes Cash So my self-managed fund is pretty void of excess cash in the whole scheme of things.

(1) I've selected Property as the vehicle to hedge inflation with. I have both a Private and Superfund portfolio.
only around 15% of property value is under any finance (Private).
The rent return on my initial capital invested is ---well amazing on 3 of the 5 properties and good enough on the other two.
The capital appreciation is stellar.

(2) The second choice is in business. Surplus cash is no longer wise to have sitting in cash flow.
Material Purchase ( Hot Dipped Galvanised Steel which doesn't degrade even over years) is returning 35-100% over a 6 mth period
demand is well over --- supply and used for my own company. (A clear advantage over competitors).

(3) The third part of the equation is being the sole equity Partner in my own company releasing TIME! (Selling is not an easy option and I don't have to).
The return as dividends on equity is way better than the Stock market and up there with Property in the short term and at times better.

So The passive income stream is 5 x Property rental.
Dividend returns from my own company
and Currently a wage as Im still 3-4 days a week until I fly off somewhere.

So this is how I've played it.
I've always said if I can control it then I'll do it.(Given an opportunity)

By That I mean Id never pass over 7 figures or even 6 figures to a third party to invest ----- no matter what the implied return was.

If you have income streams you just don't need to worry particularly if they are diversified.
Those streams are both in super and outside.

This may be helpful to someone in the planning process. I've been implementing the plan for over 30 years.

I wish anyone like Lindsey the very best.

PS Im definitely not adverse to using other people's money for investment where they receive an interest amount.
Most know about housing and trading leverage.

I can use it and other things as tax deductions or Depreciation and I can keep the capital gains and the money generated by say an equipment purchase. (Eg a $4000 a month Excavator purchase returns $ 140 an hour in net profit and they just keep working)

You could buy one---long term hire it and place an operator on it ---that's what I do with 10 of them.

Outside the square.
 
Be one of the 1% ers.

I've been asked by some how the excavator idea works
I'll explain below but a similar principle can be used in all
Equity-type business investments.

I have some in a few diverse fields where I receive a return on
my investment as an equity partner. I also have contacts and
business expertise.

One is a small Paving Brick manufacturer and Laying company.
20% equity
And strangely one is a Nail Salon (private home ) 25% equity.
Both are doing well and have an expansion program in place.

So The excavator situation (Brief form) for me is part of my own
company.

I need them and I keep them going all week every week.

But there are companies like RAM, Orange Hire , Loadex who
specialize purely in the hire of Big ticket Heavy equipment hire along
with a large range of attachments.

Most are dry hire where you need to supply your own operator.
But some are wet hire where they come with an operator.

I have dry-hired some machines when we run short of our own.
Most mid-sized Civil companies do from time to time and the
Larger ones often hire machines for months.

The benefit for us is we don’t need to service them or keep log books
other than when on our sites. All safety requirements are met with these
new machines. Most hire companies sell them off at 2500 hrs. When
company warranties expire. (We have bought some in the past).


So if you had one say 20-25 tonne machine you’d only need a couple of
Companies who use you and would be very easy. Attachments make massive.
$$s. Like Drill Rigs and Rock breakers. It would be a business and you’d need to
Have your contacts. Obviously, the supplier would service the machine.

The return on $ invested even on one machine would be excellent once set up.
There are hire companies who float machines to site so you don’t need to own
A semi Client pays --- we have our own which is moving plant and material every day.

So there are hundreds of opportunities out there as an equity partner and more
If you have certain skills and excess $$s.
Everything should be in a business contract just like a house sale is.
Again, once set up is simple.
Keeping the original business owner as the principal means you have someone.
With a larger financial interest than you and a passion as its His/Hers.
I’m happy to be bought out once I’m not needed or add more if I see potential.

Eg my nail person has taken my advice and is looking at selling courses on line
Top end for 4 figures. Once in place, it's just an email /Australia Post rinse and
Repeat structure!

Don’t get me started on Fans Only. (investigating some of the opportunities here).
Way more diversified than the obvious. Its really marketing.

So I hope I've opened the eyes of some to ideas and opportunities never dreamed of.
If you can get some going you become in multiple areas from Property to Trading to
Business Equity partnerships or indeed small businesses can create multiple incomes.
Streams that can continue way beyond retirement.

It's not about how much you have its about how you use it!
Due diligence and professional help from Accountants and Solicitors you know and trust
Are a must.

Good luck.

You’ll never become wealthy working for a boss. Be one and at worst think like one.
A really good one!!!
 
Another 2 years pass.
Both still working but I have dropped a day.
I'm now 61 and wife is 54.

Still holding 1 IP (Owned outright) and the 25 acres PPOR( more or less owned outright but loan facility still active).
Big changes coming.
Next FY will see both sold and us relocate due to my wife's health issues. We need to be nearer to her family and health facilities.
Thinking that it will go something like this.
Sell IP for around 750.
It has been let for the last year or so so there will be some CGT.
Use these funds plus an amount of advance payments on current PPOR to buy new place outright.
Later on, sell the 25 acres. This has been valued at around 1.2m.
There will be CGT on this as well and I'm not sure what that will amount to.
The house if it was sold on the 2 ha around it would get around 1m....so I don't know how the rest will be valued. It has never been used for any income generation.
Then some the proceeds from that will go into my super and some will saty out of super as we dont want any of it to go into wifes super as it might be tied up there for too long.

Re current market situation. I am looking for another leg down ( here and US) to new lows over the next weeks and months. If that happens I will start buying selected shares and ETFs in my super and my wife may change her super from conservative/defensive to more growth orientated. If that occurs then we will just hold and see how it goes over the next several years.

Any insights or comments into any of this (esp the CGT on the 25 acres) is welcome and wont be taken as advice! And don't worry Kahuna1, it is all ok.
 
Last edited:
is the 25 Ha unimproved? There would be yearly rates assessments ... and this may help, as would a good accountant

Home on more than 2 hectares | Australian Taxation Office

Choose which part of your property is exempt from CGT if it's larger than 2 hectares.
www.ato.gov.au
 
You can/should actually do a valuation which will split the 25 acres between ppor and associated infrastructure...ideally any driveway, dam and pump, irrigation, etc
And the rest.
Then if recent enough, that valuation will define the split and give you a pro rata to use ppor vs capital gain subject land
Remember you are entitled to deduct from that cgt land all the pro rata rates, insurances, etc etc
So get back all these rates notices, farm insurance bills
Get the spreadsheet and then talk to your accountant
And if you actually did improvement on the cgt subject area,,: dam, clearing, weed spraying, tracks, these have to be deducted again from that land value gor cgt purpose
A lot of pre-work required, and then x visit to a knowledgeable in that area accountant.
But it helps for you to do your homework
 
I noticed that , 5 years ago, you mentioned a redraw facility. This may be of interest.... from the weekend paper.(!) .

...Interest expense is often the largest tax deduction for property investors, especially in the 2024 and 2025 financial years given current interest rate settings. Therefore, it’s crucial that investors maximise this deduction.

To qualify for a tax deduction for interest expense, taxpayers must clearly demonstrate that the loan is used for investment purposes. This requires a clear audit trail from loan drawdown to when the investment was made.

Don't mix multiple purposes in a single loan. It is particularly critical not to mix non-tax-deductible and tax-deductible debts in the same loan account. Even with tax-deductible loans, separating loans by purpose makes recording keeping clear. If, say, you use part of a loan for property deposits and part for sharemarket investments, it is best to split the loan into two accounts.

When refinancing investment loans, thorough record keeping is essential, especially when loan amounts change, or accounts are consolidated.

Investors must be careful using loan redraw facilities, as each redraw is considered a new loan from a tax perspective. Instead of repaying investment loan principal, set up the loan with interest-only repayment terms and park surplus funds in a linked offset account. This approach preserves the original tax-deductible status of the loan while still allowing you to minimise interest costs – a notional loan repayment.
 
Yes the land other than the house area is unimproved other than ; fencing repairs, plumbing repairs(pressure pump at dam)and weed control expenses.
Will certainly be seeing our accountant and/or a financial adviser in the short term.
But I understand that any CGT on sale of either property can be offset by making voluntary super contributions. I think that will work well for us but I need to understand how to maximise that scenario ie regarding annual non concessional limits and 3 year bring forward rules etc.
 
Thanks. The redraw amount is against our PPOR not an IP.
 
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