Forum Replies Created

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of DerynakaDerynaka
    Member
    @derynaka
    Join Date: 2003
    Post Count: 9

    Hi Rubbachook [8D]

    I was just reading these tables this morning.
    If you notice the correction at the bottom of the page it says that the last data printed was incorrect and they had to reprint the correct data in this issue, I dont know what the use of reprinting the old data is, as they will need to catch up at some stage.

    Regards

    Profile photo of DerynakaDerynaka
    Member
    @derynaka
    Join Date: 2003
    Post Count: 9

    It sounds like the brown paper tape in the corners maybe bleeding through the acrylic top coats you are putting on the walls. When you apply the acrylic paint, the water in the paint will draw out the staining. The same thing occurs when you paint over smoke damage, niko pen or timber that contains a high tannin content like hardwoods with acrylic paints. The best way to stop the staining in your case is to apply a stain sealer to the corners before you apply the finish coats. Stain sealer is available in spray cans which may be easier for you to apply. Ask your local paint supplier for stain sealer.

    Profile photo of DerynakaDerynaka
    Member
    @derynaka
    Join Date: 2003
    Post Count: 9

    Sorry just testing before.[^]

    What part of the property is leasehold?

    I am assuming it is the land not the building that is lease hold.

    This means you do not own the land you lease/rent it.
    A lease may be for 99 years or more.

    When the 99 years is up and the owner wont renew the lease you will need to call in the house
    removers and move your building off their land.

    Profile photo of DerynakaDerynaka
    Member
    @derynaka
    Join Date: 2003
    Post Count: 9
    Profile photo of DerynakaDerynaka
    Member
    @derynaka
    Join Date: 2003
    Post Count: 9

    Hi Richmond,

    20 properties is a huge committment to maintain and would almost be a full time job. I wish you well.

    I have two cash flow positive commercial properties, one returns $ 24,000 per year and the other $ 28,800. They are both retail shops.These provide great income but the capital gains are linked to the amount of rent I receive. An investor will want 10% return on investment.
    EG: The property returning $ 28,800 per year was valued last week at $ 250,000 by the bank.Which is Rent less expenses x 10%. The residential house on the same size land next door is on the market for $ 495,000.

    I have just sold a house in Wilston, Brisbane last week. I have owned this house since 1984 and it has returned $ 14,400 a year in rent and $25,000 per year in capital gain. It has always valued up well and been easy to borrow money against.

    My PPR on the Gold Coast went on the Market yesterday (another capital gainer) and I have a house in Clayfield on a double block under contract. Nothing like stacking up deals to cause a little stress.

    My point is, even the best positively geared property does not compare to good capital gain property. But you will still need both to continue to borrow money.

    My goal is to live in the house at Clayfield
    (the capital gain-er) and pay off my loans with my commercial property.

    I will then use the income from my commercial property to aquire more commercial property (the positive cash flow-ers).

    Regards.

    Profile photo of DerynakaDerynaka
    Member
    @derynaka
    Join Date: 2003
    Post Count: 9

    Dont ever sell that property, you are currently receiving your increases in property value capital gains tax free, you will never be able to buy another property capital gains tax free.

    Borrow against the equity in that property and purchase another income producing property.

    Positive cash flow residential property will never keep up with the return on good capital gain property especially if its capital gains tax free.

    Why isnt the interest on this property tax deductable if you are receiving rental income?

    You may be able to pay interest only on the loan to free up some more cash flow for further investing.

    Profile photo of DerynakaDerynaka
    Member
    @derynaka
    Join Date: 2003
    Post Count: 9

    Hi Fullout

    The Intrest only calulation is
    $74700.00 x 6.11% = $4464.00 divided by 12 months
    which equals $380.00 per month.

    You are still paying intrest to the bank regardless of which loan you have, IO or P&I .

    You will pay a little more intrest with the IO loan because:
    A – the intrest rate is 0.11% higher and
    B – you are not reduceing the amount owing to the bank, because you are not paying any principal off the original loan amount.

    The benefits of using an intrest only loan are
    A – The intrest componant is 100% tax deductable.
    B – The tenant should be paying enough to cover the intrest anyway.
    C – You have extra money available to invest somewere else.

    When you dont reduce the amount of money owed to the bank you are relying on the property going up in value (capital gain). So in five years time you still ow $74700.00 but your property is worth
    about $108000.00

    So if the property is positivly geared EG paying its own way including intrest, rates, maintenance etc etc etc and after all these costs it returns you a small income you can then use this income to pay off some prinicpal.

    If it is negitevly geared EG costing you $100.00 per month to own, you will have to use more of your own money to pay off the principal.

    If you buy negative geared property you will need good capital gains to offset your losses.

    Hope this helps.

    Regards

    Profile photo of DerynakaDerynaka
    Member
    @derynaka
    Join Date: 2003
    Post Count: 9

    Hi Fullout

    The property you decribe doesn’t sound positively geared to me. Please check the numbers below and insert the your own figures to suit. This property is going to cost you approxamatley $114.00 per month out of your own pocket just to pay the intrest on the loan and the costs associated with owning the property.

    With an intrest only loan you dont repay any prinicple so the amount you ow the bank always remains the same and doesn’t reduce. The intrest that you pay the bank is 100% tax deductable and helps reduce your tax liability (if you have one).

    With a Principle and intrest loan you still pay the intrest to the bank as above but you also repay some principle off the loan amount. The amount you ow the bank reduces and so does the intrest charged.The amount you are paying off the principle is not tax deductable.

    If you want to buy more property this year it would be best to go intrest only as this frees up extra cash to invest in the next property.

    Purchase Price $83,000.00
    Stamp Duty $2,450.00
    Conveyancing $495.00
    Searches $230.00
    Loan App fees $600.00
    Valuations $250.00
    Mortgage $250.00
    Total Cost $87,275.00

    Intrest rate 6.11%
    Total Intrest Per Month $444.00
    Rates per month $100.00
    Insurance per month $40.00
    Repairs per month $50.00

    Total Monthly cost $634.00

    Weekly rental $120.00
    Monthly rental $520.00

    MONTHLY SURPLUS/LOSS -$114.00

Viewing 8 posts - 1 through 8 (of 8 total)