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Originally Posted by loofa
These have been good earners for me since 2004.
A little bit of selling at close to highs and buying back recently has been the way to go.
Currently I have both ING and GMT plus CFDs on both entered at 15%+ below the current prices.
Because CMC charge only 5% interest on the margin brrowed and these yield 12%+ it is "money for jam" if you keep an eye on moves.
What/who is "CMC" charge?
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Member
I am buying 4 LPTs for income. Have rental houses but LPTs are a no brainer, higher income yield no hassle. They will become my retirement income source one day. Suggest you have a spread they all have their own risks.
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Originally Posted by voltage
I am buying 4 LPTs for income. Have rental houses but LPTs are a no brainer, higher income yield no hassle. They will become my retirement income source one day. Suggest you have a spread they all have their own risks.
What if you evaluate selling off your houses and buying into LPTs? You can retire and live well off between 500,000 and a million in LPTS, depending on your needs. But I know many landlords with more than a dozen houses/flats and things, and still have to maintain a job. It's nonsense to consider residential property an investment. It just isn't anymore.
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......cudnt agree more FP. Ive had commercial/industrial in the past and wud have done very very well ( instead of just very well) if I hadnt sold when I did......but cant be bothered now with the hassels etc. Can you tell me...are all LPTs PIEs???....and does this mean that no further Personal Tax is paid on the net distributions??
Cheers
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Originally Posted by GR8DAY
......cudnt agree more FP. Ive had commercial/industrial in the past and wud have done very very well ( instead of just very well) if I hadnt sold when I did......but cant be bothered now with the hassels etc. Can you tell me...are all LPTs PIEs???....and does this mean that no further Personal Tax is paid on the net distributions??
Cheers
That's my understanding. Certainly KPF, ING, GMT, KIP, DNZ, APT are PIEs so distribution does not need to be returned as income. I pick up about $40,000 per annum from PIEs - no tax -my accountant doesn't even want to know about it. Just watch where you are reading the dividends though - some reports are all to hell. The higher your personal marginal tax rate - the bigger the advantage is with PIEs. I find not having to give a toss about the paperwork is a big enough bonus on its own.
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Member
FP spot on comments, i will eventually sell my properties and convert to LPTs. Only difference is that I have geared into rentals and wish to cement some capital gains first.
I suppose I could gear into LPTs to some extent. What are your thoughts. Thanks.
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Originally Posted by voltage
FP spot on comments, i will eventually sell my properties and convert to LPTs. Only difference is that I have geared into rentals and wish to cement some capital gains first.
I suppose I could gear into LPTs to some extent. What are your thoughts. Thanks.
LPTs are already geared, albeit conservatively. It all really depends on your situation and outlook. A lot of residential investors are propping up properties to the extent they are actually buying the capital gain (and that's just compulsory saving) Are you showing a profit? If so - is it an acceptable return on current value or just on historical cost? Is the higher return you will get from LPTs going to make up for possible capital gain? Is there more of a chance of capital gain in the listed trusts given that they are currently being given away (well below assett value)?
I know what I would do, but my philosophy has always been to just keep stacking up income, never sell anything, and regard any capital gain as a very welcome bonus.
So I suppose a lot depends if you want to build up an income to become financially independent - which is relatively easy; or do you want to try and do it through capital gain including the necessary selling to realise profit?
Good luck.
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Member
FP do you include LPts like westfield?
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Originally Posted by voltage
FP do you include LPts like westfield?
No, but only because I know nothing about Westfield. I presume they are still Aussie based. Generally the Aussie property companies are very highly geared, and gearing works both ways. When values fall - you get hammered. Also they are subject to CGT and of course are not PIEs. I have a heap of Centro managed MCS syndicate stuff. They are great - but Centro listed property has been disastrous, simply because of high leverage.
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Voltage Westfield Has the lowest gearing to the best of my knowledge but still a lot higher than most NZ LPTs
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