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  • Profile photo of kay henrykay henry
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    uncivilised, I think it’s great that you can get the FHOG. dunno what the govt is thinking of giving it to investors who already have properties, but there you have it. Take it happily, uncivilised, before they fix the loophole, I say!

    :o)

    kay henry

    Profile photo of kay henrykay henry
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    NEWGEN,

    My PM’s send out an annual profit/loss statement with all details of expensiture, at the end of the financial year. I have to pay for another one if I lose that one, but the first one you get should be free, I’d have thought.

    kay henry

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    Patrick,

    Melbear is our resident expert on buying OTP’s- she has a heap of them. I am sure you could ask her anything you’d like to know and she’d help out. she’s on holidays in the wilderness now though :)

    kay henry

    Profile photo of kay henrykay henry
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    Actually, kp, I get more back in the lower tax brackets, not less.

    kay henry

    Profile photo of kay henrykay henry
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    Naaa Simon, not good news for me personally, but it might be good news for newer investors. Thanks for the info :)

    kay henry

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    john howard,

    From this thread, I can’t remember that the woman laid any story on Russ. She was just a woman who was selling her house. I don’t think she was asking for a favour from any stranger. Everyone lives differently.

    kay henry

    Profile photo of kay henrykay henry
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    Positivecashflow,

    No. If you can reduce your taxable income by a great number of tax deductions, then you move down to pay less tax percentage. Depending on your income, you only need to reduce your income by a few tens of thousands, to change brackets. Depending on how you structure your finances, you can pay very little tax at all.

    kay henry

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    Chan,

    The thing about a democracy is we’re entitled to vote. You came from a country where you weren’t able to vote. At least in Australia, we’re able to vote out one group of dictators- even if another lot of dictators take their place. It’s a pity people feel so disenfranchised about voting. It’s one of the best things about a democracy. Why do people complain about what’s happening in Australia if they don’t vote? If you don’t like the govt, then vote them out.

    kay henry

    Profile photo of kay henrykay henry
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    Gats,

    I’ll be watching it this week. Did you see Bowling for Columbine? It had a big impact too, but I think Farenheit 9/11 will have more of an impact because of the election and the war on Iraq. Bush’s spin doctors have been out though, hacking the doco to pieces already. Guess that’s a good sign- means they’re scared.

    kay henry

    Profile photo of kay henrykay henry
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    So Simon, an investor could have purchased 2, or 5 or 10 IP’s and still get the FHOG?

    kay henry

    Profile photo of kay henrykay henry
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    Simon, Ihad no clue that you could buy an IP and claim the FHOG- at any time. Have the rules changed? Doesn;t that change the intention of the FHOG? To give a grant to people who have not had an IP or PPOR at all?

    kay henry

    Profile photo of kay henrykay henry
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    weswomack,

    When Steve and Dave bought some of their places- the wrap ones, it is the buyer who came up with the deposit- and that might have come from their first home owner’s grant. So it meant that the wrapper didn’t have to really have their own money- the wrappee puts it up. With this method, you won’t own the house- the wrappee does. They are paying the house off, so you become a defacto lender. A premium is added to the house price, and there is a markup in interest paid, so that’s where the wrapper makes their money.

    On simple buy and holds, it’s a bit more difficult, and even risky. Banks will look at your serviceability, and that will include the rental income provided. But you’d need to think about contingencies- like if your tenants moved out. I always think about my financial situation and if I had no tenants- would I still be able to pay my IP’s off? In my situation, I can, but can you?

    Flips can work if you buyt an undervalued property, and onsell it before settlement, but in this market, can you onsell? Was the property really undervalued?

    Desposit bonds were a method people used to buy multiple properties- and often for off-the-plan units. This was risky, because the buyer thought they could onsell for a profit, but then when the aprtments were built, they did not necessarily realise a profit, and in some cases, were worth less than when they were bought pre-plan.

    Buying 10 properties at once in July 2004… well, it may be possible on a lower income.. but I would suggest great caution- you could either make a fortune quickly… or not. For me, I’d prefer to buy one property, know the implications of that, wait a while, then reassess, and then buy again.

    Whilst Steve didn’t buy for CG, he bought in a flatter market, and CG occurred. That definitely has an influence on buying power. Without doing wraps, an individual buyer can buy fewer properties, in my opinion.

    kay henry

    Profile photo of kay henrykay henry
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    I only wish that was the case, matthew. When my partner and I bought our first IP’s, that knocked out our opportunity to get the FHOG. Had we known that then, we might have made different choices. But IP’s have their own benefits anyway, which probably make up for the FHOG, so no point crying over spilt milk :)

    Here’s the info from the fhog website:

    ” # To qualify for assistance, neither the applicant nor their spouse (or de facto) must have owned a home prior to 1 July 2000, either jointly, separately or with some other person.
    # Neither the applicant nor their spouse (or de facto) must have owned and occupied a home after 1 July 2000.”

    http://www.firsthome.gov.au/

    From the above, “home” means any property, including an IP.

    kay henry

    Profile photo of kay henrykay henry
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    Matthew,

    I’m not a mortgage broker, but I can answer you pretty simply anyway. Seeing that you already have a place- even if it’s an IP, then you are not entitled to the FHG. So your friend can purchase in her own name, but if yours is on the loan, forget it.

    kay henry

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    yes positivecashflow, some people do offer assistance without any ulterior motive- of course they do :) And some people have an ulterior motive.

    kay henry

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    Heya hector :) I am not Steve, but I’ll add some of my own opinions :)

    Remember that Steve bought in a much flatter market and prices have risen since then. We could have all focussed on one market then and made heaps of cash, because the market was flat. You could still focus on one market now- for example, I was just looking at Mt Isa on realestate.com.au, and the income/yield is pretty good… but the houses… [blink] hehe- not pretty :)

    I wouldn’t focus on one market myself. I see different things in different markets. A cheap regional place means I don’t have to have the capital outlay, and the rental return is ok. A lifestyle place can get you CG and a long-term rental place, and a city place can get long-term CG and a stable market of renters.

    Some here will go purely on yield. Others will look at property for it’s long-term prospects. It just depends on what you want from property.

    As for being time-poor… well, once you feel you have the confidence to find what you’re looking for, it doesn’t take much time at all. realestate.com.au is your friend- you can use it as a starting base to see what’s out there. I think people have to *make* time to look at property. If you were going into shares, you’d have to spend time researching, and it’s the same with property. Either you can make time, or rely on a buyer’s agent to do it for you. But if you pay for a buyer’s agent, it will be increasing their skills, but not increasing yours.

    It can be hard for a beginner, but I find most of my learning comes from this forum, and from reading a few books when I need to. But property ain’t a 5-minute skill- it’s a long-term passion, I think :)

    kay henry

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    John,

    I’m wondering what your situation is. Have you been involved in RE and have decided to cash in and put your money elsewhere (ie shares)? Have you not been involved in property? Knowing where you’re coming from makes it easier to understand your perspectives.

    I agree with westan’s ideas on how to keep abreast when property might be facing a downturn. Westan’s rents cover his mortgage, and mine don’t, so as a negative gearer, my ideas would be to ensure you have a job to make up the shortfall between rents and mortgage repayments- AND pay extra onto your mortgage to build equity. A shortfall to me is no big deal, because I get it all back in tax anyway.

    I’m not sure why you’re panicking Mr Howard. Property is a long term business. I mean, you wouldn’t go into a small business and necessarily be expecting to make millions in the first year. Same with property. You just have to buy well, pay it off as quickly as you can, watch the equity grow, the mortgage reduce, and buy again! I doubt values of property will fall so much that everyone will be in a desperate panic. There will always be those who have overextended- who are not really in a financial situation to be investors, but who have been encouraged into the market, and whose creality means they will make losses. But aside from them, if you work with fundamentals, and don’t have a get rich quick mentality, you’ll be fine :)

    kay henry

    Profile photo of kay henrykay henry
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    Melissah,

    For 4k, you could put down a 10% deposit on a 28k house- so that’s 2800 gone, and then you have 1200 for legals etc. It would be a tight call, and you’d have to think about insurance costs etc etc etc.

    Not sure that 4k is really enough to get into property investing, but others might have different ideas.

    kay henry

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    No holidays for me- boohoo! So we gain a forum members back (welcome back Simon!) and lose one (awww, melbear!)

    Melbear- where are you going down south? God, I love that area. Was going to buy a place in Kings Point a number of years ago, Mel- check it out if you’re around there- it’s a lovely area on a lake. $125k for a new house back then- I bet prices have hit the roof since then.

    Enjoy, mel, and come back to us with all your property wisdom!

    kay henry

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    Just a thought about Mt. Isa… if all the investors from here and somersoft have long been buying up or checking out Mt Isa, then wouldn’t it all be sold up, or the only places remaining be dogs? I ask this because Mt Isa is so often mentioned, but it can’t be a bottomless well of properties. It’s tiny (a population between 20,000 and 26,000- looked up from google.com.au, but all sites have different figures).

    John James, a word of caution. Seeing you’ve given out your phone number, some people who ring you could be RE agents, or people wishing to flog off their property to you- nothing wrong with that, but just bear it in mind :) Also, people sometimes talk up places because they have properties there, and wish others to buy in the area to create price rises.

    Something for you to check out, John- an article about population movements- 1998-1999, from the ABS- it’s good because it’s recent. It suggests there is population decline in Mt Isa.

    http://www.abs.gov.au/Ausstats/[email protected]/0/3e9de893cd149a68ca2569de002139bd?OpenDocument

    kay henry

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