Hi Ray,

Let me see if I can start answering some of the questions for you & I am sure the others will fill in the gaps for me.

Q1/ Guarantors are becoming more common these days as property prices rise & first home owners struggle to break into the market. Mum & Dad guarantors are coming back to help out. With regards to your wife being guarantor, the ANZ are using her income to enable you to meet their servicability requirements. Guarantors could still be required even if you do have a cash deposit because you need security & the ability to repay to make a deal fly.

Q2/ I think I covered some of this in Q1. The other point to make here is that you do not want to use alot of your cash which is fine but if by not using some cash you now have a negatively geared property, how many of those can you afford to subsidise?

Q3/ You are right on the money. There are very few institutions that will accept second mortgage & I am pretty sure the majors like CBA are one of them. I am sure the mortgage brokers on here can confirm or deny this for me.

Q4/ If you sell your PPOR, ANZ will require you to pay down your IP loan to 80% to come in line with the credit requirements. Unless of course you have another PPOR lined up that you can just change the security on the loan & move on as usual.

Hope this helps.

Kim

Hi Maximus,

Q1/ Yes you can claim two lots of insurance in one financial year. The ATO allows you to claim the expense when you pay it so long as you are not prepaying years in advance

Q2/ I am not sure if I completely understand this question. Do you mean that the equity in one property is enough to support the loan & thus you are releasing the other property & it will be debt free? If this is the case & all the loan has been used for investment purposes, then you claim against only one property.

Hope that helps

Dazzling & Wayne I would love to agree with the both of you but I am sure I am not alone when I say sometimes the grief you get in return is just not worth fighting against. I have lost friends (at least I thought they were friends) because of how well I have done with property. Jealousy is a big & powerful beast!!! I am sure if I met any of the people on this forum at a party, we would probably be able to slowly work out what we each do. The sad thing is that you are right that we have a reversed tall poppy syndrome on our hands.

I admit that I am scared of saying what I do because the person I am speaking to might be struggling to pay the household bills & here I am trying to work out how to minimise my land tax bill on my property portfolio. I suppose it is just an issue I need to work on…

Any counsellors on this site – [biggrin]

Stargazer, try mapping out where you want to go & be in the next year, next 5 yrs etc until retirement. I always find by listing what it is I want to have achieved motivates me to get up & keep going. Be confident in yourself & know you have done this before & can do it again. Goodluck.

These ideas for how to respond are fantastic. My husband is going to do the property investing for us fulltime as soon as we can sell his business. We are both self employed & trying to run both businesses & stay on top of what we are doing with our properties & developments, it is becoming too hard. So we decided to sell the business that is not performing as well now & then I will follow in a few years. When people ask “Well what will you do when you sell?”, we have both looked at one another & tried to come up with an answer. We have tried “I’m retiring” but we are only 31 so they don’t like that, so we changed it to “He is helping in my business” but they are doubting us. So I appreciate these reponses…I will have one lined up for next time.

MJ, no it is avoiding because whoever held it at 31 Dec pays the tax so I paid a little interest for not settling before but I was in front in the end because I didn’t have the land tax bill – ha ha

Oh I am hearing you loud & clear. My sister called me the other night & asked whether I had any motivational books. I said “Sure, where do you want to start” & her reponse was “None of your b@#$it property books though”. I stopped & thought here we go again. I asked what is wrong with my property books & trying to get ahead & her response was “I AM AFTER QUALITY OF LIFE NOT MONEY!” Okay then, see I thought money could actually help with your quality of life but what would I know….[blink]

Simon, I found this example on the ATO website on how to work out the CG. Sorry it is so long.

Example
Part exemption

The facts are the same as in the previous example except that Frank rented out the house from 26 October 2000 – the date of settlement of the purchase contract – until 2 March 2002.

Frank makes a capital gain of $30,000 on the house. To work out the part of the capital gain that is exempt, Frank must determine how many days in his ownership period the dwelling was not his main residence.

Frank had an ownership interest in the property from settlement of the purchase contract (26 October 2000) until settlement of the sale contract (20 July 2004) – a total of 1,364 days.

The period between the dates the purchase contract was signed (14 August 1999) and settled (25 October 2000) is ignored. Because the house was not Frank’s main residence from 26 October 2000 to 2 March 2002 (493 days), he does not get the exemption for this period.

Frank calculates his capital gain as follows:

$30,000 capital gain

x

493 days
1,364 days

=

$10,843 taxable portion

Because Frank entered into the purchase contract before 11.45am (by legal time in the ACT) on 21 September 1999 and entered into the sale contract after this time (and he owned the house for at least 12 months), he can choose either the indexation or the discount method to calculate his capital gain. Frank decides to reduce his capital gain by the CGT discount of 50% after applying any capital losses.

VL, if the land has been cut &/or filled, then a retaining wall may be required. It just depends on how big the cut &/or fill are and whether you can just smooth off. Don’t forget the retaining walls are normally on boundaries so your neighbour is going to want you to attend to it ASAP so that a fence can be erected. Unfortunately it is one of those things that can’t be put off until you have extra money. In some of the estates I have built, they have even had a time frame on how soon after you get the key that your front yard needs to be complete with driveway, gardens etc. Just a few things you need to weigh up. Yes it is great to have a new home that you chose the colours for etc but just a helping hand in making sure you allow for all the costs. Unfortunately most banks don’t allow you to borrow for turf!!!

You’ve got it[biggrin]

Don’t forget the $170K represents your DEPOSITS available. Once you locate the property to buy, you can use it to obtain the rest of the money. Okay, that sounded confusing even to me…

If you purchased another $400K property and borrowed $320K (80% LVR), you would only need to access $80K of that $170K you have. Which effectively means you could purchase two $400k properties. Hence the wonderful world of leverage. But beware, this means you are basically financing 100% of the property value. There is not too many $400K homes where you could support a $400K loan & still be +ve geared