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melbear
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November 6, 2003 - 1:58 am
Maybe I should have said ‘property’ rather than houses.
Erika, where your units are on the expensive land, I bet they also are not cheap – which was my point re having a high land value, not that it HAS to be a house to be expensive.
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Mel
melbear
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November 6, 2003 - 1:40 am
LOL[] Me too! Believe it or not, i’m Walking on air, never thought I would feel so freeeeeee……
Got a better one for you. It goes, ‘run rabbit, run rabbit….’
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Mel
melbear
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November 5, 2003 - 2:55 pm
LuckyPhil you were sold a dud. You should have gone for the Amiga!!
It’s a online questionaire of the 80’s – 100 questions.
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Mel
melbear
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November 5, 2003 - 2:32 pm
Keith, it sounds like you are either a) attempting to avoid giving even more of your income to an ex spouse, or b) you want to maximise tax benefits whilst still not actually ‘losing’ money. If I were you in this instance, I would stick with interest only loans, and have any spare cash sitting waiting ready to go.
Cheers
Mel
melbear
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November 5, 2003 - 1:51 pm
Another option I like that Robert Kiyosaki talks about is to have the money to buy your car outright, but invest that somewhere that is positive cashflow. Then get a loan and use this cashflow to pay off the car. Eventually you either sell the car, or pay it off completely, and still earn money from the asset you bought.
I just bought a car with cash, which hurt me cos I knew that if I was organised enough (or my syndicate was more to the point) that I could have done this strategy quite easily, and had some money left over.
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Mel
melbear
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November 5, 2003 - 1:47 pm
LuckyPhil, you were going to suggest that Malachii email Bill? LOL[]
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Mel
melbear
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November 5, 2003 - 1:44 pm
You have to lodge the bond with the rental bond people in your state. I believe it is unlawful to keep it yourself – and if I am wrong, I am sure somebody will correct me.
Part of the reason you have to lodge it is so that you can’t just decide to keep it if you felt like it at the end of the tenancy.
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Mel
melbear
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November 5, 2003 - 1:04 pm
I got 42[]!! But some of them were lucky guesses!
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Mel
melbear
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November 5, 2003 - 5:25 am
wealth
It depends on your current situation other than the house equity and also what your goal is.
For starters, I would change accountants.
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Mel
melbear
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November 5, 2003 - 5:04 am
I see that Arty lost the battle – ‘3 rats only’ he said. LOL[]
I reckon we could lend him any of our family dogs and the rats wouldn’t be a problem anymore either!!
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Mel
melbear
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November 5, 2003 - 5:02 am
Hi C2.
‘Will lenders allow this or will they see it as an unnecessary risk? ‘ What’s the risk? If you are the director, and you are signing a guarantee anyway, it seems to me that it would just form part of that.
‘Also would this include the tax man?’ Don’t see why it would – you are just offering the ‘security’. There is no funds changing hands, and the trust is still responsible for all borrowings, except if going belly up, then the bank will come after the security. No different to if you owned two properties in same structure that were x coll.
‘Finally, if you had equity in an IP could you take out an LOC and use this as deposits for the IP’s the trust buys and also use the IP as security’
This is the same thing isn’t it? If you max out the equity by using an LOC I don’t know if the bank would be interested in the ‘rest’ of the property as security? For asset protection, I would ‘give’ the houses to the bank as security, cos then they have the whole thing, whereas with an LOC, you still have 20% available. If you can do both, then bonus!
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Mel
melbear
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November 5, 2003 - 4:54 am
Clive
In reading your pros and cons of IO or P&I I thought I was reading the pros and cons of fixed versus variable
ie.
Interest Only – Pros
Certainty of interest and payments – only if fixed.
Interest Only – Cons
Costs to pay out early – only if fixed.
Principal and Interest – Pros
Flexibility
Pay out early without penalty ??
Principal and Interest – Cons
Exposed to interest rate hikes – only if variable.
The other comments you had are certainly relevant. All of my loans are IO, with one being a LOC so all ‘extra’ cash goes in there when not needed.
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Mel
melbear
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November 5, 2003 - 4:43 am
Speaking about being popular, hasn’t Millsy managed to get his name out there in the press!!
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Mel
melbear
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November 5, 2003 - 4:12 am
Dino, the deposit amount you have won’t change the 11 second solution at all. What it will change is your Cash on Cash return.
I agree with you on ‘opportunity cost’ of that extra deposit too, it’s really got to be worth it.
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Mel
melbear
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November 5, 2003 - 3:59 am
Well done Mini – my suggestion amplified a million times, and much more useful as it actually offers a place to go too!!
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Mel
melbear
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November 5, 2003 - 3:28 am
Scampush, there is a fairly detailed discussion on this point here:
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=5085
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Mel
melbear
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November 4, 2003 - 5:43 am
We could invite them all, but I’m sure that between us we’ve managed to alienate a few, so that should cut it down by a couple of thousand!!
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Mel
melbear
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November 4, 2003 - 5:42 am
Hi Luckyone, $300K in land value would mean that you have LOTS of houses, or that the houses you have are reaaaaaally expensive. I don’t think the ACT is any better – at least in other states you get some exemption up to a certain value. Not here. Plus my land values seem to be rising exponentially each year, therefore an increase in tax also.[xx(]
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Mel
melbear
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November 3, 2003 - 12:22 pm
Deborah, I’m guessing that you are referring to the fact where you have an interest only loan (you should if you have a PPOR loan – at least until it is paid off), and a LOC for your PPOR. You are then directing all income, rent etc. into the LOC. When the interest is due for the IP loan, it comes from this account. As will all bills etc. Is this correct?
If so, then that is a good plan, and one that will certainly help to reduce your PPOR loan quickly. You will not be claiming the interest on the PPOR loan at all, so there is no issue about whether or not the ato wins or loses the appeal (if they lose, they will just change the law anyway).
Cheers
Mel
melbear
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November 3, 2003 - 12:16 pm
I know we all hate cross collateralisation (no wonder people just write x coll![]), but one way to protect ourselves if we do have some in our own name is to use the properties outside of the trust as security for those being purchased in the trust.
This way, if you have the unfortunate circumstance of being sued, the person suing you should see that there is not a whole lot of equity available to them, esp after selling costs etc. are taken out first, so they may just go away.
Cheers
Mel