In response to LA Aussie

May be worth it to see if that anticipated stamp duty relief creates more buying activity temporarily?

I worked out my yield on Shoalwater IP (near Rockingham) to be 2.5%! Not to worry though, first of many and I believe I will catch the next wave easily as someone once told me…

Don't worry man! I'm paying 8.8% But I quite like my PM. She does a good job and the paperwork gets sent each month. Unfortunately this rate was comparitable to the general market, but I did choose her over a guy offering 8.6% (the cheapest!!) because I think if you have a good rapport with them, it's a good start to effective communication. I…[Read more]

I've got a loan with Colonial too. The number I call is: 13 24 07

what is an LPT?

Hi Linda,You're right, I have been quite confused about the concept of IO for a while. I was chatting with a mate about it tonight. She said that by paying IO payments each month I am keeping the debt the same, but if I was to pay more than the minimum it would reduce the interest payments. I think I have gotten to the point where I can't see the…[Read more]

Property Wizards in Perth are a great bunch, nothing is too much trouble and they keep in touch.

Thanks for the replies everyone Yeah we would like to get a PPOR eventually, but not in the forseeable future because our rent is really cheap. My motivation for opening the offset is to use that money to pay down some principle on the current loan with the flexibility of being able to redraw should an emergency crop up. I'm trying to get us in a…[Read more]

Thanks Rowdy. The interest payments are only slightly offset by the rental income and although there has been some capital growth, I doubt it is significant. You mention 'redraw', we are just about to open an offset linked to the P&I (which is variable), but I still don't see the point in us paying huge interest payments when it seems like we…[Read more]

Hi Simon,Congratulations on your offer being accepted! I've got an IP in Shoalwater and use a local PM. I compiled a spreadsheet back in October '06 detailing the fees and charges of various PMs in the area. I would be happy to email this to you if you like? It may serve as a guide to get you started.Regards,Dee

Hi Millions! Yes, I wrote the post with the Shoalwater property in mind – you have a good memory I definately want to hold on to it long term, even though it is negative right now, because I think it has good potential to grow in value eventually. I was thinking of what we could do for our next purchase though because we need to focus on something…[Read more]

There was a report on Foreign Correspondent last week which seems relevant to this thread:

http://www.abc.net.au/foreign/content/2007/s1865416.htm

I also watched a thought provoking doco called “Who killed the electric car?” Not sure how old it is, but along the same lines as “An inconvenient truth”. While it is true that documentaries are…[Read more]

Hi Kelly,

I know you are a secondary teacher, but when I was in year 5 our teacher introduced a great concept called “the class bank”.
We each got a fake bank book with a starting balance of $0. Good behaviour/participation/achievements was rewarded with $5 – $10 and bad behaviour resulted in $5 – $10 fines (a very effective strategy to curb bad…[Read more]

Thanks for your point of view Richard. Back in July last year when the house stuff was happening I visited with 2 mortgage brokers. They both came up with the same lenders for recommendation, Westpac & Colonial. Having never ventured into the world of IPs before, I figured I was doing myself a favour by getting someone more experienced to find me…[Read more]

Great topic!

I was chatting with my husband last night about our imaginary children. I told him that I am really looking forward to educating them about money when they are young so that they understand how to build wealth. He screwed up his nose and said “Nah, just make em get a job and they’ll soon learn the value of money”…not good enough as…[Read more]

I meant to say the loan is with Colonial.

Hi duckster & Terry,

Yes, the IO is fixed for 3 years and the P&I is variable:

350k IO
62k P&I

This is for a negatively geared IP that we purchased last year in Perth (hence the unfortunate -ve situation). Our loan is with the Commonwealth, mortgage advantage package.
So it seems that my mortgage broker was right with his advice based on the…[Read more]

Thanks Milly, I was suggesting the same thing to my husband last night. The challenge is that my mum lent us 20% of the deposit + closing costs (via her equity) to get the house = 105k. She owns her house outright, but it’s all she has, so I think we will have to wait until we can refinance and release her from the deal before we can reno…[Read more]

Thanks for the suggestions. I’m waiting to hear back from my PM regarding the demand for 4x2s on big blocks in the area. It is encouraging to hear that you think Shoalwater is in a good spot for the next boom Millions.

Ideally we’d like to hold on to the place for as long as possible to assist us with leverage for future IPs, otherwise I’m afraid…[Read more]