Forum Replies Created
I don't see anywhere on my ballot an option to select 'no confidence' against all of the running parties or the entire system of government as it currently stands… That is the real problem.
I call bullsh*t on the whole show, and vote Terryw for emperor! haha
There is the tax concern also.
If you are borrowing 550k for your new house and you have 550k equity in the investment property, then you may not be getting the best tax advantage.
There have been numerous threads on this topic also, so recommend you do a search on that topic.
Thought there was a min width too…. Had a valuer looking at only of my places where I'd made a room out of another space, and it wound up 4m long but only 2.7m wide … Valuer measured it and mumbled 'that's just wide enough' then carried on taking notes.
Investors are fine, but there is also the 'private lending' route if all others are tapped out. You will likely pay considerably higher interest, and may or may not need to put up some security still (depending on what you can negotiate with the lender), but can carry on working. If the numbers stack up, that is.
As with anything though, you should get advice and do appropriate due diligence on that option before committing to anything.
right, which is the date that the contract goes unconditional, not the 'cooling off' date. In my last experience the 'unconditional' date was around 2 weeks into a 30 day settlement period.
So, Sam, looks like your folks have an out if they want it. Will still cost them a bit I am sure, but gives you something to talk to the solicitor about.
Ok so correct me if I'm wrong guys, but if you have signed conditional on finance and have had issues with the finance then you should be able to void the contract…. What then would the penalties be?
Did they sign 'subject to' any conditions? and has the contract gone unconditional yet?
Sure, I was being mildly sarcastic about the trader mentality.
Even still, if the entire market is dropping like a rock those shorting will increase, those holding will decrease, and those who are not participating such as by holding cash or treasuries will simply retain their value… Subject to variables such as rate vs inflation, etc.
there would be more to be made from shorting the stock. But that (shorting) certainly carries more risk.
Again though, value at the end of the mayhem purely depends on whether or not your currency still holds a value. Market crash resulting from currency collapse would be a total reset!
Well I'm no expert, but, the logical thing to do when expecting your stock to fall would be to short the stock. Essentially 'betting the other way' to what you are expecting when you buy stock… No sense keeping it in cash or simply 'retaining value' when there are significant gains to be made with the miraculous multiplier they call 'leverage'.
old mate might have trouble doing that as he could be accused of insider trading, but I am sure there is a smart and legal way to get around that.
That is assuming you expect the currency to survive at all. But that's a conversation for my shiny hat.
Oh and if you try this, don't forget to let us know how you go! : )
Sounds like a tough one…
Maybe talk to a property valuer, and see if you can get them to do a retrospective desktop valuation based on comparable sales, using data from 10 years ago.
It may be a long shot, but If yes then you'll get your valuation. If no, then you've only lost some time and the cost of a phone call.
*Double post, deleted*
Hi Tambo,
Communication is key.
It doesn't really matter where your solicitor is, provided they are communicating effectively with yourself and other parties and can make themselves available for face to face meetings if/when required at the location required.
Even face to face meetings though don't always need to be held in your home town though. For example, settlement for a property purchased in Gladstone could be completed at the banks office in Brisbane… Lots of variables.
Here is a link from a google search on the benefits of prepaying interest:
http://www.macquarie.com.au/mgl/au/advisers/keep-up-to-date/oxygen/may-2011/interest-in-advance
Looks to me like the only real benefits in paying in advance is being able to claim this year instead of next year, as terry has mentioned above, and that you can lock in a lower interest rate for the payment.
Further it seems this is only really beneficial if you already have a lump sum of cash available for the transaction, because borrowing to do this would mean paying interest on the money you borrowed to pay your interest… and while that may be tax deductible, it seems to me like you will get nothing like the same amount back on tax as you will spend from your after tax income.
I should add… if I had a bunch of cash sitting there I wasn't using for anything else (which is unlikely), I probably could find something better to do with it than pay my interest in advance… like plonking it on the offset account to reduce the total amount of interest I would pay, and keeping it available should I need it for any opportunities that I come across.
If further tax reduction is the goal, maybe look at how you can do this with your existing property, such as through a depreciation schedule or renovation activities that also increase your property value, etc. Or if you already have maximised the return on that property, maybe look into some other investment opportunities.
Hi Tambo,
My understanding is:
Depreciation applies to things that are installed but can be picked up and removed or replaced, such as air conditioners, kitchens, hot water systems… etc.
Capital allowance relates to fixed items like a carport, window, or the whole shell of the property.
As Richard mentions above, 'depreciation' can be claimed without affecting anything.
However, if you claim capital allowance then you deduct the amount claimed over the years from the original cost base (what you paid for the property initially). The result is your revised cost base, and is used for the purpose of calculating CGT.
For example,
Purchase price (original cost base): $200k
Capital allowance: $20k, deducted over X years
Revised cost base = 200-20 = $180k
Current Sale price: $250k
Capital gain = $250k – $180k = $70k
CGT would be calculated on the difference between the revised cost base and the current sale price, which in this example is $70k.
If you had not claimed capital allowance, CGT calculations would use your original cost base, so 250-200 = $50k.
What you have to weigh up is whether it's worth claiming capital allowance so you can see the benefit in your tax return every year, or whether you'd prefer to save on CGT when you sell… And which of those works out more cost effective for your situation.
Not to hijack this post, but if you wanted to do a development under your own name or some other structure for which you are the director or beneficiary, can your smsf invest in that trust or even just lend money to it or yourself at a particular rate of interest?
i guess what I am looking at here would be if you wanted to secure a deal outside of your super fund but use its capital to fund deposits or whatever… and return it a profit to the super fund too.
Is it a PPOR or an IP?
If an IP you may be able to submit a PAYG tax variation so that you get that part of your tax return related to the property back in your pocket each week, rather than at tax time. Something like that would improve your weekly cashflow without actually changing your mortgage repayment.
Accountant types on here will be able to go into more depth on that subject…
Otherwise, as you said, look at refinancing to an interest only loan or at a lower rate.
Also, look at what kind of other incentives come with the loan product. For example, with our PPOR home loan we can reduce our repayments by 50% for 6 months if my wife has kids. If that is your situation, then something like that could be useful for you. Others loan products have similar arrangements for financial distress, etc.
Well the big one for me would be: to implement more short term goals!
I set a target 4 months ago to pay off my car loan by christmas. I Bought a camping trailer, and had someone run up the back of my parked car without leaving a note… but still managed to pull it off a fortnight earlier than my initial target. And a full 4 years ahead of the loan term.
It's amazing what you can do when you are focused!
Next year I will improve my cashflow and personal balance sheet further by:
1. Eliminate all non-deductible debt, that is not related to my PPOR, by end March;
2. Complete renovations on PPOR by end April, and revalue;
3. Take a short holiday for my wifes 25th birthday;
4. See a lawyer about establishing proper structure for future developments, for my situation.
In the 5 year look-ahead I aim to:
1. Convert current PPOR into IP;
2. Complete at least one small development project (subdivision, renovation, dual occupancy, etc) per year;
3. Produce a minimum of $400 per week passive income (or $20,000 lump sum per year);
4. Undertake one 4 unit development project;
5. Set aside at least 40% of household combined income for investment purposes, and 10% for savings purposes.
Aloha wrote:Richard, I'll do exactly that – I'll be well below 80%. The rest (about 100K) I'll set aside for getting the DA and some more in reserve for the next stages.
Hi Aloha,
Just reading into your statement. I think what Richard mentioned was borrowing 80% of the land value (400,000), using only a 20% deposit (100,000). Then put the 400,000 into an offset account for this loan.
In this way, when you need to draw cash to fund DA or other emergent activities you will have the maximum amount of funds available and can be drawn from your offset without delay or costly application process. In addition, you only pay interest on the smallest possible amount.
Example:
land cost: 500,000
Deposit: 100,000
Loan amount: 400,000
Funds available in loan offset: 400,000
Interest charges here would be nil. Until you draw some funds out. Example:
Loan amount 400,000
DA costs: 50,000 (pay for this with funds in offset)
Funds in offset: 350,000
Difference: = 400,000-350,000 = 50,000
Interest will be charged on 50,000 only.
It seemed like what you are saying above is that you would be putting down 400,000 and only borrowing 100,000…. which is the other way around and doesn't appear to leave you with a lot of wriggle room.
Sorry if speaking out of school.
A wise man once said "if it flies, floats, or ….. , rent it."p
… Not that I can talk, got married this year. Lol
