Did anyone read the article by evan thornley in the last BRW of the year?

Interesting comments on his thought about the fact that the economy is booming mainly on consumer debt and that it is going to end poorly.

I think that this is one of the things that the reserve bank is worried about so rates will probably go up.

Josh

PS thanks for the…[Read more]

Mark,

Just a question thats kinda off topic, but have you ever thought off keeping the house (renting it out) and using the extra equity from the rehab to put down a deposit for the next one?

I don’t know if the numbers add up and if it will work but it’ll save all the transaction costs and you’ll build a portfolio.

Josh

Hi peter,

I’m kinda along the same lines as mel. If you decide to invest of the equity of the reno later, it can be done but you then lose out on time. When compounding time is you’re best friend.

Not to burst your bubble or anything but a ppor is rarely an asset. As you mentioned yourself, If you aren’t going to sell, the only way to access…[Read more]

Hi allen,

you would have to talk to an accountant to see if this was possible or not but you might consider buying an ip through a trust. theoretically the ipisn’t owned by you so that shouldn’t affect the rent allowance and also and income can be distributed between you and your wife that allows the best minimisation of the allowance.

I have…[Read more]

Another way you can consider is after all expense (inc your own wages) is to see whether the return on capital is acceptable for the increased risk and compared to what you could get elsewhere.

Josh

I have heard this before although I have never check it with an accountant.

I understnad it has to do with the initial purpose of the loan, regardless of whether the use changes half way through.

I don’t know whether it is reciprocated for an ip becoming a ppor.

Josh

are there any tax benifits from working overseas whilst having a neg gear prop? I don’t know whether your overseas income is deductable?

(i have no clue about this area but it was just something i thought of.)

Josh

plus a 3.6% yield isn’t a lot.

Hi robo and mel,

I’m not sure whether moving from your current ppor to another ppor would make the ppor #1 loan a tax deductible loan even if you did rent it out. I believe that it has to do with the intent of the loan.

Best to check with an accountant but I heard that this was so.

Josh

Yeah, what mel said!

I mean you’d get a better return on paying of the ppor loan as it isn’t tax deductible you are saving more. ppor loan has to be paid with after tax dollars so at the highest tax bracket you are saving kinda twice the interest rate. ie 14%, hard to beat.

If you find it hard to get pos cash props, pay down your ips to be…[Read more]

Bowen, North QLD, Home of the BIG mango[]

Simon,

I thought having an offset account on an ip loan would be useful to have whilst saving for rates and repairs etc. (If you don’t have a ppor loan otherwise it would be better sitting there)

Josh

Agree with wayne, biased one sided sensationalistic journalism.

I bet he’s never heard of the all ords accumulation index.

Well I think the article proves I’m putting my money in the right place.

Josh

I’ve heard that the cgt discount from trusts may soon disappear and that trusts will become more like companies????

Anyone else heard this??

Josh

5 bucks is still pos cash flow, If you are looking for a higher return then finding a better ip iss the only way to go.

The only question is that finding them might not be easy.

Josh

sorry I forgot to write that that is what pin was writing about.

With finding pos cash flow it will depend on how much cash you put in. ie If you bought an ip and paid it all in cash it would be cash flow pos from day one.

With the 11 sec rule the rent is roughly yielding 10%.

If you want to borrow all the money from the word go you basically…[Read more]

quote:you said:

quote:

The only downside with that is we have never saved a cent because we have been of the opinion it is better to get rid of debt. We have redrawn on the mortgage a number of times for renovations, o/s holidays etc as the redraw facility seemed like the best way to access large amounts of cash we needed.

I hope you were…

[Read more]

Risky I don’t really know your personal situation so I cant really say sell or buy but as karen said you do have to weigh up all the other costs.

Generally prop should be a long term proposition but…..

Personally I might think about saving that lump of cash for a deposit on a pos cashflow ip, that way hopefully you may end up being close to…[Read more]

Risky I don’t really know your personal situation so I cant really say sell or buy but as karen said you do have to weigh up all the other costs.

Generally prop should be a long term proposition but…..

Personally I might think about saving that lump of cash for a deposit on a pos cashflow ip, that way hopefully you may end up being close to…[Read more]

Risky I don’t really know your personal situation so I cant really say sell or buy but as karen said you do have to weigh up all the other costs.

Generally prop should be a long term proposition but…..

Personally I might think about saving that lump of cash for a deposit on a pos cashflow ip, that way hopefully you may end up being close to…[Read more]