angelinsydney wrote:
2. I never used to believe in the concept of "a lifestyle I have gotten used to." But in my old age, I discovered it is true. People get use to a certain lifestyle. And it's really very hard to wean them off the cafe latte. So, here's the clincher: there's no easy way. You will go through withdrawals. From the…[Read more]

Maybe I'm missing something, but why doesn't she just take the new job? Whats forcing her to turn up to the shop every day? You said she'd be prepared to lose the 70k and walk away, so whats the difference between signing everything over for free and taking the loss, or just going on with her life?

I don't have any advice for your family member, but its so sad that questions like these always come after the fact. If they were so worried, all of this should have been written into some kind of business contract before they went into business together. Its strange, but its almost more important to get written agreements when doing…[Read more]

By redrawing, you're essentially re-borrowing. You're borrowing those funds to buy your PPOR. The LOC likewise is a borrowing to buy your PPOR. Neither of these are deductible debt. Out of interest, if buying a new PPOR with greater than 100% lending is really something you want to do, to make things simpler (if your lender will allow it), I'd do…[Read more]

bjsaust wrote:
The $3,500 loss needs to be funded somehow, so unless you get fancy, you probably gift that $3,500 to the fund

This was the part of my scenario above I was mostly interested in clarifying. How you handle this shortfall. The advice I received, was that rather than loan just the 20% (in my case my plan was and still is only 10%) to…[Read more]

There's a difference between administering, and managing.

Oh, ok. I stand corrected. I thought even in those cases it still got charged.

Well, technically he does. But yes.

First thing I would do is confirm that your loan on the PPOR has a 100% offset account. Then I would figure on an amount that I felt good about having as a reserve buffer in case of emergencies. For instance I like the idea of paying the car off asap, but if that left you with $5k savings and your budget is $7k p/m, then you have less than a…[Read more]

Well, it depends on how much money you have to put into a loan. For instance, historically houses close to the CBDs of the capital cities have had the highest capital growth, so it makes sense to buy an investment property in a suburb fairly close to the CBD if you want to maximise capital growth over the long term. However, most people would…[Read more]

Break it down using Terry's numbers:1. You gift the money.You gift $100,000 to the trust from your LOC. Trust takes out $400,000 loan. Your 'gift' costs you $7,000 each year in non-deductible debt. Trust pays interest on the loan, and say makes a $3,500 profit.  It distributes that profit and you pay tax on it. Lets say you pay $1,000 in tax, so…[Read more]

It depends on how much you outsource basically. You could (and I think many people do), setup the SMSF then get someone else to administer and make investment decisions on your behalf. I've chose the middle ground for mine, our accountancy firm has a superannuation division, they handle the administration and auditing, but I make the investments.…[Read more]

Unencumbered just means there's no debt (mortgage) over the property.

chappy1970 wrote:
I have a PPOR loan (i9nterest only) with a Savings Account used as an offset account.Then I have my dedicated IP loan wich is Interest only.

Is the savings account a 100% offset v's PPOR loan?When you say all your salary goes into the PPOR IO loan, do you mean directly onto the loan itself, or into the savings account?Assuming…[Read more]

Since this has become a bit of a random "hows this lender?" thread, I was wondering if any of you have had dealings with State Custodians. I'm in the process of refinancing my PPOR there, but I guess any feedback before moving onto an investment loan would be useful.I chose them because of competitive rate (6.79%), flexibility (i.e., split loan,…[Read more]

Somebody may have a better answer for you, but when I read this post, the question that comes to mind is "whats your plan?". Why are you investing in property? Why did you choose Geelong in the first place? What attracted you to buying there? Is there any reason you believe St Kilda now suits your plan better?I think part of the reason you're…[Read more]

I doubt it, but it seems like a pretty simple phone call to find out.

Spandex wrote:
So aim for a cheap shack, still pay my 35k tax a year. Over buying a new house that costs me something out of pocket?

A fairly common approach is that of "adding value". For instance, if yields were 5% (an easy number that basically equates to weekly rents being purchase price/1000), then if you can buy a $200k "shack" and turn…[Read more]

People on this site are obviously very anti-NG, but bear in mind, it has worked for people before. It is a form of speculation though. You're intentionally taking a loss on the hope that property prices rise and you make your profit from capital growth. You need to look at the market though. Its flat right now. Some people may anticipate a slow…[Read more]

Also, LMI can reduce risk. Every time I've purchased (other than through SMSF)  I've used LMI and got a bit extra as well. If you have a 100% offset or similar, you can park that extra in the account, so your interest is no more than it would have been if you didn't, but you now have a built in buffer in case of emergencies.