I reckon we will get to zero or very close on the cash rate.

Thats nice. Whats your question?

20% is the rule of thumb for developements.

Im not a reno guy but would think the same % applies to make it worthwhile.

1. Change PPOR loan from P&I to IO only.

Should be. You will have to contact the branch lender on the process involved.

2. Delink offset from PPOR to new PPOR.

Correct and move any savings into it as you want to offset non deductible debt first.

3. Do i start making P&I payments in the PPOR or keep that as IO as well?

Up to you but need to realise that if where to convert this to an IP in the future by going P&I you are reducing the principal therefore reducing potential interest deductions.

Me personally, I keep all loans IO but need to be careful advising others with this due to responsible lending. If you have a legitimate reason and are disciplined with finance should not be an issue.

I looked on their website and it seems very vague. Looks like a one stop shop to me.

I have posted this elsewhere but will do it again so people know if they are dealing with a self serving spruiker or a professional advisor.

There are three types of people in property;

1. The Salesman
2. The Advisor
3. The Spruiker

Knowing the difference could mean a dud investment property or an A grade investment property;

http://www.thepropertycouch.com.au/how-to-spot-a-property-spruiker/

• This reply was modified 8 years, 3 months ago by  Colin Rice.
• This reply was modified 8 years, 3 months ago by  Colin Rice.
• This reply was modified 8 years, 3 months ago by  Colin Rice.

How do i go about switching my IP – > PPOR and my PPOR – > IP ??

Really depends how your original structure for each loan was set up???

Ideal structure for PPOR would have been interest only with an offset account therefore preserving the original principal and maximising the interest deductions once converted to an IP.

Did you set it up like this or have you been using redraw facility. That is putting money in the home loan and redrawing it?

What are the tax complications with this? And how will this affect my tax deductions???

Hard to say until we know your original and current loan structure?

Im going to assume you IP is interest only? If so you link an offset to it and keep it IO and store savings / principal in the offset never actually reducing the original debt unless for other reasons such as debt recycling or serviceability reasons to name the most common.

• This reply was modified 8 years, 3 months ago by  Colin Rice.

is this a problem the building had when you purchased even if it wasn’t known
is what the levy is doing a repair or an improvement as defined by the case law

If so this could likely have been discovered pre purchase by asking to see the last 2 years AGM minutes and financials as this will have all the dirt on what needs to be done to the building now and in the future.

Could even use it as a bargaining tool in a depressed market if property not selling if you know of upcoming repairs and special levies etc.

Im friends with him on FaceBook so he must be a top bloke ;)

They will convince you that you NEED to refinance your home loan…. commission payment number 1
… then do an equity release…. commission payment number 2
…. and then a third loan for the actual property … commission payment number 3
and finally the big payout …. a commission from the developer in the realms of between $30K-$60K+ per property (incidentally very close to how overvalued the property is … surprise, surprise)

They will likely cross collaterlise the securities to hide the undervalued IP purchase as a stand alone structure as you have described will make this easier to spot. This is one of the many trick they will pull on the unsuspecting public.

They still get the same commission fora cross coll structure with one less application therefore less paperwork as only one loan is generated for both properties.

Mel wrote:

I just did a brief Google search and it seems as though this finance clause (‘subject to finance’) can be used against us. The way I understood it: if we don’t make every endeavour to get the finance then we can end up owing a lot more money than the 0.25% penalty. Does this sound right to you? Thank you again for your advice.

It is not difficult to get out of a finance clause. Most sales agents will accept a bank or broker letter.

Sounds like a different dynamic than Perth in this regard the way you have described it.

I lived in Melbourne for 3 years in the 90s (loved it) and remember the mix of the poorest of the poor and the very wealthy. Few pockets like that in Perth still but getting less and less.

• This reply was modified 8 years, 3 months ago by  Colin Rice.