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Is a valuation thru an agent sufficient or do I need a professional valuer?
purchased in 92…. lived in? if you count the occasional weekend, but it isn’t a PPOR. it’s just that it’s not rented out.
Hmmmm…. property with only $10k deposit? I don’t think so.
Add to that low rental yield, stamp duty, rates, etc, low income (which greatly limits benefits of neg. gearing) and quite possibly low potential for capital growth…. property at this stage would not be a good idea for 12-18mth.
Go the ING acct. Shop around, most of the big banks rates for term deposits could at best be described as an insult.
As for the 5% rate, it will go up as the RBA raise rates… though not as much or as frequently
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Now, if you continued this way unchanged, for the full duration of the loan – say 25 years – would that mean your total loan repayments will have only been $150,000 – that is, the same as your initial purchase price because the tax dept. effectively paid your interest?No. Your tax deduction will only be at most 47c for every dollar spent, not the full dollar. At best, approx. half of your interest is saved.
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I didn’t inform the landlord, just did it! What I did was rent a few bedrooms out at a higher rent, an I paid nothing at all, because the other people’s rent cover the lot. Just becasreful the others don’t find out how much you are paying.I hope none of them were friends… that’s a low thing to do.
Getting a loan is not too different to getting insurance… you still have a duty of disclosure. Reason being that the bank is watching the bit in the UCCC that says “..civil penalties up to $500,000 …” for failing to accurately assess serviceability prior to issuance of a contract.
Whilst not illegal, most leases will stipulate that sub-letting is not permitted, which I imagine is well within a landlord’s rights…. and rightly so.
I’d be pissed if I had a tennant that sub-letted… kind of negates the whole tennant screening process.
That’s why you’d use an offset acct… so that if an opportunity comes up, you can draw on the funds.
I would never want a loan term to go any longer than necessary. While you may be able to claim interest, it still costs you more than paying a loan off quicker.
A dollar as a deduction is at best 47c. A dollar saved is a dollar.
As much as people might bitch about wrapping, it is capitalism at its best… recognising that a market exists, and making a product that tailors to that market.
I do agree that it is not too dissimilar to loan sharking. To those that say they do it out of the goodness out of their hearts, I assume your wraps are purely non-profit? Or are profits donated to charity? There isn’t a singe person doing it for anything other than wanting to make a buck.
Whether or not they are taking advantage of those that are desperate or just too stupid to know better depends on how much they can charge and still sleep at night. Judging by many posts, we have few such people here, thankfully. One can only hope the government regulate this industry though, so that markups and interest rates aren’t exorbitant, and there is no room for shonky operators.
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Would anyone provide me the best strategy because I was told that the TAX office would give me a hugh tax bill when I change my PPOR.The only way the ATO could give you a huge tax bill is if your PPOR-turned-IP produced a huge income.
You’ll only incur CGT (AFAIK) from the point in time when the PPOR becomes an IP, should you sell it.
If you rent it out, yes, the rent is taxable, but provided the mortgages on the IP and PPOR are seperate, you’ll be able to claim interest on the loan. It’s a good idea to (assuming you’ve used an offset account) take as much of the money out to purchase your new PPOR, so that you can claim the maximum amount of interest deductions on the remaining balance.
You’ll also be able to claim depreciation of the house assuming the building is not too old (and you’ll need a quantity surveyor to tell you how much you can claim), rates, agent fees, etc.
Of course, I’m no expert, and you should get your account to give you the details… but this is my understanding based on what I’ve been told here.
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I’m not so sure why you feel “investors” should be penalised for setting up their own retirement fund ?? Or do you expect everyone to live on the joke that they call the old age pension ??The major problem is that it heavily favours those with equity (ie. older people generally) who havce benifited heavily from the capital growth in the last few years.
For little/no money down, they buy a property and pass on much of the costs to the tennant whilst benefiting from tax breaks. Meanwhile, first-time buyers with no equity get trapped in the rental cycle because house prices rise to unrealistic levels and they don’t want to risk a $300k+ debt.
I’m not saying the RBA are to blame for any of the current problems… IMO, lenders provide very easy credit (which is their prerogative) for so-called investors, some of which buy up multiple properties, which has caused an obvious dwindling of supply.
You do the math. If someone buys a house whilst owning another, that’s one less for someone else. With 12% of taxpayers declaring rental income, that’s a pretty large amount of properties unavailable for purchase to prospective owner-occupiers.
Everything I’ve read suggests the time for fixing has gone. With so much speculation over rate rises and the strentgh of the economy, the banks have adjusted fixed rates accordingly.
I wouldn’t worry. With the massive growth in property values, average mortages are quite high, and v. high rates (ie. over 10%) would have the potential to drive many to the poorhouse. If you can handle up to 10%, go the variable.
If there is a rise, I would think its a bit unjustified. The figures about increases in borrowing/credit don’t really take into account the most recent rate rise. At this stage, it’s hard to know if the drop in auction clearnace rates is due to the spring factor, or the rates, or both.
The difficulty is also the timing. A rate rise before xmas would have a negative effect on consumer spending over a period which is normally retailers favourite time of year. That would then flow on to the share markets to compaines with retail exposure etc etc.
Then of course, there are the currency effects, which are already being felt. Dollar goes up, we buy more imports, we export less.
Inflation is within targets, I think it may be premature for another hike. If there isn’t one, there will be after xmas though, that is almost a certainly IMO.
If there’s a bust, it’ll be for the same reason there was a boom – the herd mentality. Just every man and his dog rushed into RE because they saw prices climb, when prices show the first sign of dipping, those same people may very well rush out of RE.
Regardless of motives, there is certainly good money to be made. It also helps if the message you are selling is a get-rich-quick one, as people are in general, materialistic.
Not everyone is intelligent/educated enough to know when they’re being conned. Not everyone realises there is no simple formula for success as some of these seminar gurus would have them believe. It is about time organisations like ASIC and the ACCC took an interest.
Out of curiosity, does Anthony Robbins actually make money from anything other than motivational speaking? Has he been successful in any other area?
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Also do you know the trick about the 55 day inteterest free credit cards and having it lincked to a LOC account?What trick is that?
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HiThis is an intro from tonight’s ch 9 news in Sydney…
“A radical plan is being proposed by the NSW State Government .. to HELP people buy their FIRST home.
The idea is to let potential homebuyers “unlock” their superannuation .. in order to get that massive deposit.”
Don’t the federal government control super legislation? Regardless of what the NSW govt may propose, they’d need to get the federal govt to agree. I just can’t see that happening.
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It is not breaking any copyright laws to make a copy of something that you own! That is why CD burners, tape recorders, video recorders exist.WRONG! It is copyright violation to make an unauthorised reproduction of *any* copyrighted material.
Like it or not, even copying a CD you own to tape to listen on a walkman is copyright infringement. MP3s fall into the same boat.
You and friend went halves, that only entitled you to half of the CDs each. Upon selling the CDs, you should also have discarded your (illegal) copies.
And no, I’m not for copyrights as they stand in Australia, they need a serious rethink.
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I guess I’m just wondering what the problem is that people forsee. After all – if a property is +ve cashflow today (that is, rent coming in is greater than expenses going out), then it will still be +ve cashflow tomorrow.Depends on how far rates go, and how close to -ve cashflow some peoples +ve cashflow IPs are. Rents eventually go up, but they never go up as quick as rates, especially when supply exceeds demand.
The property I’m renting hasn’t had a rental increase in three years. It also sold at a loss just a few months ago (purchased 2 years prior).
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lets look at the fundamentles good economy and growth since 98 to 2003 has only made up for a lack of growth in 1993 1996 averaged out growth has been steady since 1993 until 2003.Since jobs are secure im sure we all can pay our mortgages and avoid hype created by the media regarding henri kaye,lets face it he was always going to go down my 1 year old could have predicted that,good established property is always good, crap real estate is always crap,and gee arnt more people renting anyhow than buying so demand is good for rentals yes the returns arnt huge but there still going many people have made good capital growth by speccing since 1998 anyone could,A number of things…. important factors in our economic growth were the low dollar (good for exports), low interest rates and a flat share market making property investment favourable, and lots of new housing construction (the building industry makes up a big slice of the economy).
What is the situation now? Rates are set to climb (meaning consumer spending will fall), the dollar is up, exports have fallen, new housing construction is falling. The economy will cool its heels over the next year or two.
Prices have reached a point where getting into property (whether to invest or occupy) is becoming unaffordable. Like you said, rental yields are low, there is significant oversupply, so rental demands are relatively low (vacancy rates arent exactly pretty).
The sharemarket is picking up and investors are moving their money into the next big thing. Remember the herd mentality? It was a major factor pushing up house prices. It works both ways. When people see other people leaving property, they follow.
It’s all cyclical. Like shares, property is not immune, and some will not do well out of their property investents.
