Originally posted by kram:
Dudes, Listen.

We run our spreadsheet at 6% capital growth.

It seems that this is the average metro rate and gives a great picture of your future

That ‘picture of the future’ would require Australians to increase the debt owed on housing by around 13-14% per year, indefinitely.

Look at it like this:
– current housing…[Read more]

Are there no accountants on this forum?

Originally posted by trecolori:
Hi All,

I purchased my first property in 2003 at 160K, now I estimate its value to be at 170-175K. I’m a bit worried that maybe this asset is underperforming

Underperforming? Many suburbs of Sydney and Melbourne have lost 10-15% since 2003! I’d say you’ve got an overachiever there!

Seriously, there are so many…[Read more]

Originally posted by Terryw:
I am not an accountant, but think that you can claim the interest on any borrowings relating to the IP, and that would include purchase costs.

This is the very point I was querying on another thread. Do not these purchase costs form part of the capital cost base, thus reducing the CGT payable at sale? Does not the ATO…[Read more]

I bought the 4 bed house in 2002 and have borrowed against this to fund my lifestyle over the past 5 years

That’s a pretty expensive way to fund a lifestyle!

I assume you’ve been living in this property as your PPOR? If you “re-rent” it, do you have somewhere else to live? “Re-rent” implies that it has been rented previously? These factors are…[Read more]

“Running the serviceability calculator of all lenders they can borrow upto $1.8M however in Noosa Waters that gets you a nice block of land. Using EFM they can borrow around $2.3 and for that they can get into a property upon the water.

For them the additional $500K of borrowing means that the growth they will get on a more expensive pro…[Read more]

Marc said “in this day and age of 90 and 95% LVR’s, and 100+% loans, it seems to me that the market will become so highly geared that there will be a flood of forfeitures and bankruptcies from people with neg equity and loan repayments far above their capacity to repay should there be the inevitable correction.”

Agreed, but neg equity and hig…[Read more]

Is this really a good idea?

If their house appreciates at 10% in the first year, the ‘equity partner’ will be entitled to 4/10ths of that, leaving them with just 6% in equity gain*. During that year they will have paid somewhere around 6.5% of the house value in interest payments (20% lower than regular mortgage rates due to ‘equity partner’)*.…[Read more]

Originally posted by browny76:
Fixing houses Im good at, conversing on the computer not so good! Reckon I’ll leave it to the EXPERTS

Hey Browny, don’t go yet please! I’m dying to know – are you going to sell this property or hold on to it? How long (and approx how many man-hours work) did it take for you to increase the value from $79k to $130k?…[Read more]

Sorry, I know it’s bad etiquette to reply to one’s self…

And please excuse me suzieq for hijacking your thread.

I’m really curious about this now. I need somebody to explain to me how the different parts of IP costs are treated, taxation-wise. Here’s my thought, please correct me where I’m wrong.

Expenses are either:
– Non-deduc…[Read more]

Originally posted by Terryw:
Hi
Do you have a loan on your own home? If so, all spare cash should be going onto that loan.

But she surely couldn’t put the extra $15,000 into her home loan? At least, not if she plans to claim that part of the loan interest against her tax?

On the other hand, it seems that the purpose of this extra borrowing is…[Read more]

Originally posted by browny76:
we borrowed $100,000
<snip>
we hope to have taken the value of the property at very least to $130,000.
<snip>
Meanwhile the extra Equity provides for your next Deposit

Wouldn’t that equity be ($130,000 * 80%) – $100,000? I make that $4,000. Is this right? I too am trying to learn this works.

F. [cowboy2]

Originally posted by AUSPROP:
me and a couple of other guys somehow secured ourselves as the bankers and it was on for young and old… counterfeiting, theft from the safe, passbook fraud

A bank creating ‘funny money’? Now why does that sound familiar?

At the end of term we had so much cash that we couldnt spend we ended up burning it.

The…[Read more]

Originally posted by TracyD:
I cant help feeling that their may not be growth in this area for some time now. Am looking at reducing my home mortgage to next to nothing as it annoys me paying that NON tax deductible interest to the bank!

There’s an old saying in investment circles – “You’ll never go broke taking a profit”. It’s true.

If you sell…[Read more]

Originally posted by AUSPROP:
Well that was then and we are in the now.

Too true. But a couple of very simple mathematical equations can be applied to the now. These show that (as I’ve so often repeated):

for house prices nationally to simply hold their current level, housing debt will grow to a crippling level. In my opinion, the amount of…[Read more]

Originally posted by Dazzling:
F,

I gotta hand it to you for consistency…..you’ve been bangin’ that negative drum of yours for the full two years that you’ve been on this forum as a member.

Thanks Dazzling! [thumbsupanim]

BUT, you have consistently avoided my questions about what you would have or did invest in.

Not strictly true, I’ve made…[Read more]

I’m guessing the problem relates to the ready availability of well-located 3 BR houses in decent condition for under $150.00pw. That’s your main competition. Your second source of competition is that in marketting to proffessionals, for $260 per week, they could simply buy something for $200,000. There are brand new 2 and 3 BR townhouses for that…[Read more]

Originally posted by AUSPROP:
people have talked property up AND down for years and I can’t think of a time that it hasn’t been substanitally cheaper to rent than to buy AT THAT POINT IN TIME. if I had rented for the past 25 years it would have been a personal financial disaster.

Many people followed this kind of logic during 2002 and 2003 in…[Read more]

Fair enough then. I thought the ATO were a little more sophisticated than that! This article:

http://www.computerworld.com.au/index.php/id;1686331665

indicates that they were checking for loan repayments that exceeded reasonable levels for a stated income:
Computerworld understands the IT shops of banks, mortgage brokers and mortgage insurers…[Read more]

Originally posted by L.A Aussie:
[The average punter is still optimistic and still spending over here. That’s precisely the problem.

They may not have that option, what with the subprime MBS scandals and losses moving into the higher rated MBS and the Federally-sponsored ‘Freddie Mac’ publicly stating it will cease purchase of risky loan products…[Read more]