Actually, my thought was for Alex to get as big a loan as possible and negate most of it by using an offset account.However, I don't know how big a loan that can be given the short work history, and size of income though the $40K savings history may help. "I never recommend off set accounts to anyone you are far better off putting any extra mo…[Read more]

Hello Post EnterprisesIf you have investments you will need to lodge tax returns. Your investments will have income and possibly expenses so you will need to declare and claim these.Even if all your investments are shares with fully franked dividends I believe you will still have to lodge a return.If you only have super, I don't know.CheersElka 

Hello Richard and AlanI'm a bit curious. Neither of you recommended that Alex learn about offset accounts.Is that because you fear she may be too young to be financially disciplined ?For future flexibility it seems like the way to go, specially in her situation of having a huge deposit.In 5 years time she may want a bigger house and want to keep…[Read more]

Hello RDWhy don't you find out who is managing the professional rooms in the property next door to you and go and have a chat with them. They could tell you everything you need to know including give you an opinion of whether there is demand in the area for more.Good luckElka

henny wrote:
I just want to figure out, given that the loan amount is slowly going down (that is, we have built up redraw in the account), at what point the rent will cover the repayments  and other costs on the remaining time for the loan…at which point, we won't have to pay anything into the place, and it will pay for itself.

Hello HennyI…[Read more]

Hello G-O-MAre you planning to move permanently to the new state?If this is only a temporary move then ducksters suggestion of renting there yourself and buying an IP in the new state makes good sense. The interest on the new loan is fully tax deductible and as he has already pointed out, your current PPOR remains CGT free for up to 6 years this…[Read more]

Linar wrote:
Yes that does sound excessive.  The GST should be 10% of the management fees plus statement fees, that is, $2.96.  You have been charged 10% of the management fees plus statement fees PLUS rent.  Your PM is incorrect.CheersK

Assuming it's a residential property and not a commercial one.CheersElka

Hello wealthyjvdMaybe reading the following thread will help explain.https://www.propertyinvesting.com/forums/getting-technical/finance/4325393?#comment-177325CheersElka

Hello RoyI don't know which state you are in. If in Victoria here is some useful reading. http://www.consumer.vic.gov.au/CA256EB5000644CE/page/Renting-Landlords?OpenDocument&1=910-Renting~&2=20-Landlords~&3=~  CheersElka 

Don't forget that if you transfer the house into your mothers name at some stage, assuming that she is not living in it with you, then any capital gain from that point on will not be tax free.Is there a special reason why your mother wants the title solely in her name instead of only the percentage that she is financing ?. CheersElka

That will do it.  Thank you Richard. Elka

robyn 2009 wrote:
Hi everyone, thanks for your feedback.  I forgot to mention that my landlord insurance DOES NOT cover for carpet –  ok lesson learned.  Given the damage and risk of patching in a high use area, I will ask for the room to be replaced.  The tenant wants quality accommodation and in return for their loyalty I have agreed to redu…[Read more]

Hello RichardWould you please mind explaining how one organises it to only have to pay 10% CGT.Great result BTWCheersElka

Have you advised the water authority that it's a rented premise and the name of the tenants?Not sure about NSW, though Scotts post above implies that it's the same as in Victoria, but where a property is separately metered then the tenant is liable for all the water usage charge and the owner pays for the connection/sewage etc. charges. If they kn…[Read more]

Hello claireowUsing your information in the above post, the maths is not hard.Basically, assuming IO loan to make life easier for the calculation.$480,000 X 6.15%  = $29,520 interest per year ( $480,000 – $10,000 (in offset account))  X 6.95% = $32,665 interest per yearSeems like a no brainer if your intention is only to buy one house to live i…[Read more]

At this point there should be no CGT to pay on the sale of 50% of what used to be your PPOR, however stamp duty probably is. How much is that in the state you live in.   Also, as Dan42 pointed out what you gain now you may pay for later. In other words, putting the house into your name now so as to get more tax deductible debt will mean that, sh…[Read more]

Whether a property is cross collateralized or not does not effect it's being negatively or positively geared.As duckster posted, if you have a large cash deposit then the property is more likely to be positively geared. With a large deposit why would you have your loan cross collateralized. On the other hand cross collateralizing a property does…[Read more]

Nice detailed post Duckster.If you are in situation 2 ( lots of cash for a deposit ) and have a mortgage on your PPOR ( non deductible interest payments ) then the best solution is to use the cash to reduce your PPOR mortgage and then go to situation 1 solution 1. ( establish line of credit against PPOR and use this as deposit and avoid cross…[Read more]

Hello C2Very simply Cross collateralizing is when you offer more than one property as collateral for a mortgage. This is usually done to avoid paying LMI. The banks love it but most investors don't as it's messier and can be more expensive if you want to sell one of the properties.Negative gearing is when the expenses for a property exceed it's…[Read more]

Personally I would start with going to an accountant knowledgeable in investing and retirement planning rather than just a financial planner. Most financial planners ( including the one I went to ) will just get you into managed funds which may be good soon but is not the only asset class to consider. Most will not consider direct property.I don't…[Read more]