Eilatan,I am not going to defend accountants either but her advice makes little sense, in not paying down debt because it reduces the tax deduction but then investing surplus funds in an interest bearing account? Why not run the numbers and see which gives a better return to you.Ultimately wealth is about assets less debts, so increase one while…[Read more]

S, Yours is a different issue. My view is that the use of a unit trust will restrict you in lender choices. Your FP may have good reason for the MGS unit trust but it is not immediate apparent to me unless you have a need for unit type holdings with others. As you are on a property investing forum, I presume you are interested in a legal entity to…[Read more]

G,Depending on your state you live in, you may be able to transfer the assets into your name. Whether that makes sense from a tax perspective needs to be answered for the IP's but you certainly could for the PPOR.I agree with Terryw, if you are up for stamp duty and CGT, it may not be the wisest move. A company for a business is often a good…[Read more]

In simple terms – increasing deductible debt and reducing non deductible debt. It is done indirectly, rental income and tax benefits go to reduce your non deductible interest expense (generally by way of an offset against a PPOR home loan) and all IP expenses are paid by use of an investment LOC.There are a number of threads explaining the use of…[Read more]

Dazz,The reason you use the LOC to fund the settlement costs is that you can no longer get a 105% LVR loan. The maximum LVR for an investment loan is around 90% (some lenders may got to 95% and it seems to be easing a bit in the current market, but the mortgage insurers make it difficult) so you need that 10% plus stamp duty etc and you use the…[Read more]

It is a valid comment, it is about a life balance, to enjoy life now as well as being able to enjoy life in full after you retire.As part of my work, I help older folk with finance and I am continually saddened to hear of their own circumstances. They took the advice of their parents and grandparents, buy a home, pay it off and never get into…[Read more]

Tribulation,The existence of a large PPOR mortgage should not be the game breaker.If you have equity you can access and are able to show servicing for increased debt, one very effective way to reduce non deductible debt quickly is to purchase an IP and debt recycle. You direct rental income and tax benefits (use an ITV form each year) into your…[Read more]

Jules,The concept is a sound one and some of the responses raise good points.To build a portfolio quickly with what you have said, you need to use as little of your own money as possible and borrow more for each property. LMI is just a cost of doing this. Based on your combined incomes, it should be possible to purchase 2 IP's if not more if you…[Read more]

Get an independent sworn valuation to give you a better idea.At a cost of $300 to $400, it is worth spending the money on.Alternatively buy one of the reports from the likes of Residex or RP Data.Good luckGreg

Redlegger,I would be reluctant to go into that level of debt for an owner-occupier home. It is non deductible.I would do the numbers to decide whether it makes more sense to rent in your new location (you need to balance the emotional side of living in your own home to the financial benefit of renting) and use your funds to purchase another IP.The…[Read more]

Daniel,The type of property you can buy will be determined by what amount you can borrow and then be able to afford the rental shortfall (if any). I would also caution you to keep away from student accommodation, mainly because lenders don't like them and it is harder to get a higher loan to value ratio loan to purchase.I have a number of clients…[Read more]

Thack,Structure is an important component as is time frame, long term intentions, type of property, do you intend to build a multiple property portfolio, etc.As Evolve outline very well, there are a number of different structures to use. It is costly if you think you need to change half way but that doesn't mean that you can't use multiple…[Read more]

I would look at your longer term goals and what you want to achieve.Once most people have two, three or four IP's in their own name and if they are typical median priced negative geared IP's, they may have used their income tax benefits like you have.Some of the issues with owning IP's in your own name include:land tax (if all in same…[Read more]

I would ask why you would want to use borrowed funds to pay this?If you don't need to then pay it from profits.While I am not a tax agent, my view would be similar to the second accountant above, the debt arose due to an obligation relating to the sale of an IP, there is a connection between use of funds and purpose.I am not sure you can get a…[Read more]

It is frustrating to me that mortgage brokers continue to recommend using the same lender for your first IP as your PPOR . Often using the old red herring of avoiding LMI. These are often old bankers who were brought up to do exactly that. The real reason is that lenders now have security over 2 properties with an end LVR of 50% or less instead of…[Read more]

It depends on your goals, the buying a property to get into the market, allow time for growth, sell and upgrade is a strategy many have used before. It is costly however, selling agents fees, moving, stamp duty on the new property etc may cost you $30k to $50k.Alternatively if you need to move to a larger place, consider renting for a period. It…[Read more]

Solomon,If you just wanted to purchase 1 IP, go with what Richard has suggested.If you want to build a portfolio, I would consider going to an 80% LVR with a LOC of about $210k on your PPOR.  The reason is so you have the funds available for the deposit for the 2nd IP and have a large safety net & also be able to debt recycle.I would convert your…[Read more]

Thanks for your comment.The lenders most likely are not aware that I refund or that I even charge a fee for service, nor would they care. Irrespective of what many lenders claim, brokers are a viable sales channel for them that if they want to grow their market share, they need to continue to cultivate. They took the opportunity of tighter credit…[Read more]

Liz,I am sure you can offer a lot of practical advise to many of the members because 'been there done that' experience is valuable and often hard earned. I hope this forum can add some benefit to you as well to make that next stage easier.Good luckGreg

Liz,We have all been there, perhaps some of us we not  ever cute though!FHOG – first home owners grant, frderal govennment $7k grant for first time home buyersPPOR – principle place of residence (own home you live in)LVR – loan to value ratio, a measure of the loan amount compared to the purchase priceLMI – lenders mortgage insurance, paid when a…[Read more]