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carlin
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May 4, 2009 - 11:11 pm
Still not clear Terry. The property is held in the wife's name. Does that mean that (for tax purposes) it's owned fully by her and therefore CGT (if it's sold) is based on her tax rate?
carlin
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May 4, 2009 - 11:06 pm
Don't get me wrong. We're cross collaterised too, using equity in our PPOR to buy IPs. As I understand it – as the IPs gain in value you can request the lender to release equity they're holding over your PPOR.
See if you can get hold of a copy of the API mag article I mentioned earlier in this thread. That's what guided us with the way we bought our last IP as we wanted to avoid further cross collaterising.
carlin
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May 4, 2009 - 11:25 am
Hi the7,
In our case, the loan for the 20% deposit from Lender A went to Lender B to pay that deposit. All the funds have been borrowed for an IP so interest on both loans (the 20% with Lender A and the remaining 80% with Lender is deductible.
I'm not an accountant, but my understanding is that as soon as you start mixing up funds used for non-investment purposes with those used for investments then you're muddying the waters in terms of what interest you can pay. We keep all our loans separate for this reason – there's no confusion about what interest is deductible come tax time.
cheers,
Carlin
carlin
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May 1, 2009 - 4:23 am
So perhaps we can read into this that RAMS are predicting rates to stay low for the next two years, then they either think they will rise or they're not sure hence increasing the fixed rates from 3years on.
Seems to be in line with predictions of those economists brave enough to make them in current climate.
carlin
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April 28, 2009 - 12:23 pm
Meant to say, they still look quite good compared to the big banks.
Wish there was a table that could be relied upon to be up to date + give comparison rates.
carlin
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April 28, 2009 - 12:21 pm
Not sure where you're looking, god-of-money.
Off HSBC website – 3 year fixed is 5.29% (5.68% comp rate).
4.99% is for just one year, and the comp rate is 5.73%.
Yes Richard….won't rely on ratecity.com. Perhaps they don't update very often.
carlin
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April 27, 2009 - 11:53 pm
Perhaps we are.
Investment 3 yr fixed – 5.49% (comp rate for $225,000 is 5.23).
Investment 5 yr fixed – 6.29% (comp rate for $225,000 is 5.64%)
I'm looking to fix a loan of around $200,000, hence my interest in comp rate for that amount.
These figures are off ratecity.com.au
When you look at the monthly repayments in the comparison tables they look very good to me – very close to what ING offering.
The advertised rates really mean nothing – comparison rates are where you get a true idea of what you're getting and some of the fees attached to some of the "great" fixed rates around at present are ridiculous.
cheers,
Carlin
carlin
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April 27, 2009 - 11:47 pm
Heard again that Reserve Bank likely to drop rate by full 1% before end of year.
So anyone able to respond to my second question in previous post? ie:…is it at all feasible that fixed rates will come down again??
carlin
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April 27, 2009 - 8:11 am
Geeeeezzz!!! I wish I'd seen that 10 year fixed rate!!! I wonder what the comparison rate was.
Any other 10 year fixed rates like that around still?
Also….I know fixed rates have gone up slightly, but if Reserve Bank drops the rate again is it at all feasible that fixed rates will come down again??
carlin
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April 26, 2009 - 12:43 pm
On the subject of Rams – now that they're owned by Westpace does that mean they're now a safe proposition?
Their fixed rates remain very competitive and we're considering refinancing a couple of loans with them.
And, yes, it is interesting that Rams seem to be offering a better deal than their parent company, Westpac. Perhaps Westpac is just trying to build up the Rams name again after all the bad publicity?
Thanks,
Carlin
carlin
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April 23, 2009 - 10:40 am
If you're not in a big hurry, I'd hold off. The great rush by FHBs has overinflated the lower range places thereby eating up any benefit the grants have. That rush is only going to get worse now.
Give it another 12mths and you'll have developers and sellers conditioned to accept less cos there'll be fewer buyers out there + interest rates likely to have gone slightly north by then, which will also reduce the buyer pool.
Carlin
carlin
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April 22, 2009 - 1:28 pm
From their website –
3.99% 1 year fixed rate. (Reverting to standard variable rollover rate. Comparison rate 5.60%.
Doesn't sound that great.
Am I missing something?
Carlin
carlin
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April 22, 2009 - 12:45 pm
Hi Terry,
Thanks for the info.
We don't have a LOC. We have our PPOR loan on a variable rate with mortgage offset account into which all IP rents go and from which we pay all bills.
The granny flat is self contained so it's a standard residential tenancy, not a boarder.
We're in SA. Will have to check re-stamp duty.
Wondering if it makes any difference how long the granny flat is rented out. eg: does the six year rule apply at all here?
thanks again,
Carlin
carlin
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April 21, 2009 - 11:55 pm
Not sure why this came off active topics list…..anyone able to help with my queries in previous post??
carlin
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April 20, 2009 - 10:55 am
On this same subject – we rent out a granny flat behind our PPOR on which we claim a percentage of our household utilities expenses against the income we make.
FIRST QUESTION – A friend advised us to stop making claims for deductions and depreciation (it's fully furnished and we cover all utilities) as this would mean that when we sell the CGT would be less. Of-course we would continue to declare income, as required by law.
Is our friend right? Is this a legitimate way to reduce CGT when it comes time to sell our PPOR?
SECOND QUESTION – I believe you can transfer a PPOR from joint spouse names to one spouse. Does this mean we could put it in my name and once again reduce CGT as I'm in a lower income tax threshold?
thanks,
Carlin
carlin
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April 20, 2009 - 10:49 am
Duckster,
I would love to know which API edition this article you're referring to appeared in so I can check this out too.
thanks,
Carlin
carlin
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April 3, 2009 - 11:16 am
Thanks for the answers….so now I'm really hoping that FHBG is extended beyond June 30 because my IP will be a slightly harder sell without it.
What are people's views on the likelihood of that extension happening?
There's been a bit of media about risk of our own sub-prime debacle because the FHBG is overinflating prices, so perhaps the govt's gone cold on the idea….
carlin
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March 3, 2009 - 11:33 am
Westpac's fixed rate of 4.99% for 3 years looked good, but I vaguely recall the comparison rate (taking into account fees and charges) was quite a jump higher.
Still, anything under 6% looks good after where we've been!
All our loans currently variable.
carlin
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February 13, 2009 - 9:36 pm
Thanks for the tips everyone.
Going to IKEA with measurements to see what we can do. Will checkout that Antonius system Ben. Gather it was cheaper to get the doors from Stegbar.
cheers,
Carlin
carlin
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January 28, 2009 - 6:41 pm
I hadn't planned to buy but I did. I saw a bargain, went for it before it got on the market, and got it. Have tenant signed up and we're not even at settlement yet. Rent yield 6.8%. Great location.
Plan is to lock in interest rates after the next drop next month. Not sure for how long.
The key, as always, is being confident about your research (both of the market and rental demand) + being able to service the loan without sleepless nights.
Find an area, know it inside out, find a niche style of investing (eg: reno and rent, multi-letting, whatever works for you and you ENJOY) and then get out there and look, not just on RE.com but pound those pavements.
Property investing should be fun, like a game of monopoly. Different tactics in different times.
I think many of those who continually prophesize doom are secretly harbouring regrets that they missed the boat in the past. But there's always time to get in. And, sure, there are many people who got caught up in the boom mentality and overstretched themselves. But if you read widely and do all your due diligence you won't be one of them.
cheers,
Carlin