Forum Replies Created
If the spousal transfer option isn't available then a sale is not a bad thing apart from selling costs.
It means you'll have approx $500K to reduce your new mortgage by. The total savings in non-deductible interest payments will be very significant indeed.
If you wanted to invest in other property post the sale of your previous PPOR you'll be able to leverage off your new home and the much lower LVR you'll now have.
Hi Bobbi,
It is good to see you are focusing on the guaranteed loan. It is really important to 'get your parents off the hook' as soon as you possibly can. Clearly this is something you are aware of.
You haven't mentioned where your property is but if it achieves any growth that will also help you with the release of the guarantee. For example if the property goes up by $50K and is valued at $720K you may be able to release your parents a little more easily with an increase in property values.
Once the guarantee is out of the way then certainly consider Jamie's comments.
Hi Boondog,
You said, "My income of this amount is only guaranteed till the end of 2013 so I'm keen on investing aggressively buying neutral/positive geared properties. Is this a sound game plan?"
On the limited information available it sounds as if you'll need all of your cards to fall into place and at the right time.
You are not sure of income beyond the end of next year and you are seeking to highly gear yourself. On this basis alone it wouldn't take much for the wheels to fall off your plan.
Given Jamie's comments above about your restricted equity level I would be first addressing that so you can put yourself into a position to move again when you have a more certain future.
Hi Steven,
Recommend you read post 9, 10, 19 & 20 (or thereabouts from memory) as these are the comments of people who own/owned a serviced apartment.
Others of us have used our knowledge and broader property experiences to stay away from serviced apartments.
Hi Bobbi,
Normally I would agree with Jamie – on this occasion I would be trying to release the guarantor as quickly as possible.
Do you know the details associated with the guarantee?
EDIT – If I was being a guarantor for someone I would like to know that my exposure is kept to a minimum both in terms of timeframe and $$
I am sure Deppro are cheaper than $680 ish. Might be worth a call.
Cheers for that/ Just curious.
Hi Belinda,
OK – I'll bite.
What is a Siacci System?
JacM wrote:Interestingly, I have friends that live closer into the city but find it near impossible to get on the train because all trains are full by the time they reach the stations near the city.
Happens in Perth too. Some lines are pretty full pretty early and those closer struggle to get much room if they do manage to get onto a train.
Hi Wally,
Whichever way you go (IP of PPOR) you will need to get a deposit behind you. The days of no/very low deposit home loans are a distant past at the moment.
Typically you'll need approximately 10% of purchase price – this allows 5% for purchasing costs and 5% for deposit. The lending market constantly changes so a broker will be able to firm up those estimations for you.
Generally speaking 'new' properties re not an ideal place to restart your life. They do attract a price premium and are often sold for investment purposes on the tax benefits associated with new properties. Given you are restarting you may be better off looking for something that you can value add to – renovate, sub-divide, develop etc.
DWolfe wrote:Firstly I'd say, if you are going to invest in property, don't do it when you are on holiday. The rose coloured glasses are on, the time frame is too short to really come to grips with the area, the systems etc. You'll want to be on holiday!
Heed this comment on so many levels.
Not worth it.
Hi Parmalukes,
I use an insurance broker and she does all of the running around for me. Might be worth getting a broker onto the job – will save you time.
Hi Dielle,
Congratulations on making serious inroads into your existing mortgage – a great effort which has put you in a terrific position to stat investing.
You have so much to learn and there is no need to make hasty decisions. Sit back and spend some time learning the fundamentals of property investment. At this stage you do not need to know all of the intricate, finer details more the broader details. You can do this by reading books (there is a recommended reading list somewhere on this site), reading this forum, asking questions and seeking clarification of your own position.
I would suggest you try work out how an investment property fits into your long term plans. Are you looking for cashflow or capital growth in your properties? Do you have property skills you can use in your investing?
At some stage you will need to find yourself a good broker and there are a few on this board who would be very useful to you. Sit down (can be email or over the phone) and work out what your financial status is. Based on your ability to pay down your mortgage so quickly I suspect you'll get a very favourable response.
Once you have done this background work you will be in a position to make an informed decision. After all you will need to be in control of your own destiny.
For what it is worth – I believe you are in a position to start investing now if you wanted to. Your mortgage is very low and there is no need to pay it off completely. If you choose wisely you could own an investment property which has negligible impact on your existing cashflow. This means you could continue to pay off your home at the rate you currently are.
PS. Make sure you do factor the arrival of kids into your decision making. They may not be in the picture yet but they will be sometime in the future. With this in mind – too much negatively gearing could be deterimental when kids arrive.
As per Jamie's comments – your logic is spot on.
Just make sure you can get a place with a $260K loan (mentioned in your post) that suits your needs and is in a reasonable location. There are some locations in Australia at the moment where renting is cheaper than buying (not sure if your preferred locations are on that list)
Andy 66 wrote:I've got a full time tenant in there. I'm heading down there on the weekend,As the saying goes, "such is life". Some famous bushranger came up with that one.
I am not familiar with these types of investments so take what I say with a grain of salt.
Speak to the tenant and explain the situation and see if they are agreeable to paying you directly and then you reimbursing the management company their dues.
Must admit losing $13K/annum on an 'asset' with questionnable resale value would make me think about cutting my losses and moving on.
Ben Cousins wore a tattoo emblazoned across his mid rift with that message too.
Some WA country towns with diminishing populations ran similar programs 10 – 15 years ago. The intent was to attract people who could add value to the town in return for them getting a cheap property. Some of the early programs were reasonably successful, others not so. Preference was given to tradies who could help local farmers, towns folk and businesses through such activities as panel beaters, mechanics, auto electricians and so on.
Unfortunately the attractiveness of a cheap house the culture shock of moving to a small country town
Certainly pay down your own home at the moment. This debt gets no assistance from the tenant or tax department and by getting it out of t he way as quickly as possible then your cash flow will improve as you'll have no home loan repayments to meet.
Is this a USA property?
Given you could invest up to $3K on a heat pump it would be worth having extensive and assertive conversation with PM to see if tenant is prepared to sign a lease (do they exist in US?) I would like some certainty of tenancy before I spent that much money.
ING passing on the full 0.25 basis points effective from 12th Oct.
Source http://www.rebonline.com.au/breaking-news/5562-bank-passes-on-full-rate-cut
Be interesting to see what the others do.
patted03 wrote:Probably not likely for me with a low tax bracket and low investment options to begin with.Negatively gearing is a strategy more suited to higher income earners for two reasons; they generally have higher disposable income to support the shortfall and secondly they are taxed at a higher rate and therefore any deductions they get will have a more pronounced effect on their tax refund.
