Forum Replies Created
Thanks heaps to everyone for your comments. I've now suggested to my MB that I don't understand why I need to cross collateralise – that I still find it confusing and am nervous about it. I'm now told I that I don't have to but check with my accountant.
I asked for but still haven't received any advice on why X-collateralising is a good idea.Since I've now got an option I won't be Xing.Thanks everyone – probably saved me a future headache by the sound of it.Baba JohnThanks Richard & Sanjiv for your replies.
Can you point me in the right direction to find out more about these perils & why to avoid at all costs.
Sorry for being naive but ….
My Mortgage broker has actually recommended we do it ?
X collateralise one IP against a new one.
Now I’m wondering why ???
I haven’t done it yet – so……
But I now know I really should undrstand this more.
Thanks – if you can help me learn more from somewhere.Baba John
[blink]Hi Devo
excuse my ignorance but where can I find more info on the ‘dangers’ of cross collateralising – and what do you now have to do to ‘fix it’ ?The negative gearing on your IP – looks to me like you have a loss before tax of about $9,000 a year. Hopefully your projected capital growth will easily cover that. If it does (and looks like it is at the moment then fine – good onya – but if not then ???
But looks to me that you are within your comfort zone – better to be in the market than not – especially if you are in an area of good growth.
I suppose you could have also borrowed $307,000 and put it all on the stock market (perhaps not a wise move at the current market position – but only a year or so back that $307,000 would have made a motza).
Swings and roundabouts I suppose.
Baba John
Thanks vyaw 2003 and JFisher for the replies.
After a cosmetic only reno (say $20,000 max – not counting any fence) the house is actually more like $100 – $150,000 less than comparable ones a street or two off the main road – as it is a sought after & relatively high capital growth area.
The big unknown is just how much of a negative is the road issue (I’m sure I’m not the only one baulking at the prospect – but perhaps there is value to add there ?).
We have also thought of the doctor/chiropractor/health studio type reno and are looking into that with Council. Could be a chance to get even better rental returns – but then again that is a much more limited and very different market.
I’ll keep doing my research – but if anyone out there has done a similar thing – & like I said – had good or bad results I’d be very appreciative to hear of them – you can send a PM to me if preferable.Thanks again for your help
Baba John[buz2]
The other thing I wanted to mention/ask is big fences to screen from the road – any comments on the merits of that ?[blink]
Thanks for the input Mr/Ms Devo
This one is on an access road into Semaphore and Port Adelaide – easily accessible to both.
Lots of development going on there – and properties moving fast.
The road is not overly congested and has a good green corridor and a proposed bike path along it. Good public transport as well.
I’m just concerned about the potential downside – the perceived ‘negative location’ factor – and how strongly that plays out into the future ??
Any advice – good or bad – from anyones past experiences would be invaluable.
Thanks again
John
