Padowan,

In your example, you’d be paying interest on only $20K. But your repayments would still be on the mortgage of $100K.

If you had a mortgage of $100K and an offset account with $100K in it then your interest would be zero, but you’d still be making mortgage repayments until you paid it to zero. You could decide to pay it out early with the money in the offset account but this could incur an early payment charge dependent on the terms of the mortgage.

Offset accounts are great if you’ve got the discipline not to consider them as available cash for those splurge purchases that are not investments. I get my entire salary paid in to the offset account, and my mortgage payments are out of this account. The net left over is effectively a payment off the mortgage too as it reduces my net effective borrowings and interest repayments. If I need to, then I draw down on the offset account to pay the bills but we mostly live off my wife’s income.

Hope this makes sense, I was always a bit convoluted.

Mogul, I agree. Spann is a bit of a realist. Any novice could have bought on the recent market rise, done nothing and still turned a profit. Peter advocates doing something, ie adding value to your property. His approach would work even in a flat market, as would Steve’s obviously as it relies on cash flow.

Cheers,
Michael.

Steph,

I know, but it was kinda funny [biggrin]. I agree that mispelt words do drive you crazey somtimes… [biggrin][biggrin]

Cheers,
Michael.

Bec,

I surprised my wife by buying the ring without her knowledge, then popping the question after a night out at Darling Harbour. I was so scared she’d say no that I didn’t go down on one knee. I sat next to her and held her hand so I could not let her run away.

Anyway, she said yes. That was the first proposal and the first ring. In the end there was 3 proposals, 2 rings and 1 wedding… The second proposal was in front of all our friends and family at our engagement party. I went down on one knee then after my speech so that I could make up for my earlier indiscretion. The third proposal accompanied the second ring which I purchased as an upgrade to the first. She loved the first but it was an emerald, and I’d always wanted to get her diamonds. She succumbed and I got a jeweller friend of mine to make a three stone emerald cut diamond ring with a half carat. It cost more than her car, but boy it sparkles!

Anyway, I love my wife and proposing all those times was soooo much fun! I still propose every now and again just ’cause I love the sound of the words so much. Always gets me a kiss and sometimes something more… [blush2]

Cheers,
Michael.

PS Aussierogue, what a great post to bring up the big 1,000 posts!

James,

A little more info please? Are you suggesting urban infill kind of options such as buying a residential site to knock down and replace with 2-3 townhouses. I’m not into development yet, but believe the old addage of problem+solution=profit. So, would recommend the buy below median, tart it up and rent it out approach. ie. The Peter Spann endless deposit approach.

If you could enlighten me I’d be eternally grateful.

Mogul, cash in the bank is no big deal. Use other people’s money its much more fun. I could borrow up to $2M for investment properties if I needed it, so look at my own money as just covering the deposits. I’ve currently got equity of around $500K and about $50K in the bank. This is peanuts, there’s a lot of people on this forum with a helluva lot more than that.

Padowan, I’d suggest sitting tight for now and building up that equity and cash reserve. In 2 years time you’ll be well placed to reap the rewards of a property market on the turn. Then look to borrow to invest for CG in quality properties. Neutral / slightly -ve even to get the really quality properties that will max your return over the long term.

My 2c (and incidentally my plan),
Michael.

Its a blip on the downward slide, the fundamentals just aren’t right. Pay it no heed and wait for the true bottome to come around in a few years time…

Michael.

Rob and others,

I think Sonja hit it on the head, I was reading Rob’s posts back and forth and was about to post something similar.

Basically, my wife and I lived together in a defacto relationship for 10 years, yes 10 YEARS! before getting married. One day I just felt that I wanted to openly and publicly declare to the world that I wanted to spend the rest of my life with this woman. I could have done that without getting married, but I wanted the public declaration so that I could give something of myself to my wife.

We got married by a celebrant at Mona Vale beach surrounded by friends and family, and I can honestly say it is the best thing I ever did. Living together was great, but since we’ve got married we’ve grown so much more in love with each other. I had no idea I had so much more to grow together, the vows broke through a whole new level of commitment.

Cheers,
Michael.

Aussieogue,

I hope you’re on a good commission! Or maybe by “my company” you actually mean “MY company” in which case its 100% commission… [biggrin]

Cheers,
Michael.

Lukis P,

I’m with you on this. I’m a buy and hold guy too. I guess I’m just saying that to hold for 10 years and see no growth would be a real bugger. If we are in as bad shape as a lot of people think, then this may be the timeframe we’re talking about. I’ll wait until I see the market bottom and turn before buying on a neutral / -ve gearing philosophy.

Cheers,
Michael.

Rob,

I could be wrong, but I think you’ve got an identity crisis! [blink]

Cheers,
Michael.

Steph,

You’re right of course. The problem is that I AM one of the lazy ones. I keep promising my wife a little massage, but end up piking out when i get a bit tired.

I’ll need to lift my game a bit I think, I’m letting the team down.

Cheers,
Michael.