Forum Replies Created
Hi Oto130,
0to130 wrote:Thanks for the replies and advice. We're both in our mid forties Paullie, and we have 3 kids to put through high school (two still in primary), and (hopefully) they will also want to go to university. I guess to a young person starting out we are considered well off, but I don't think we'll be enjoying financial security if we don't improve our position. I don't think there's anything wrong or greedy in wanting to be better off unless you fall for a snake oil salesman (as we previously did). Experience can be a cruel teacher, but you never forget lessons like that. I think we'd prefer to learn from people who have actually done the things we want to do, i.e. start slowly, get good advice and support, and progress steadily.The young people you refer to as starting out with nothing will be our children if we don't get organised and prepare ourselves (and our children) for the future. Again, thanks everyone for the input.I think you're still in a pretty good position.
Most people don't think about their financial position until it's way too late!!You're both still relatively young. (I'm 43, so to me you're young).
You have a good amount of equity in your house
and you've had the experience and will now be better able to recognise shonky customers.Gather a good team around you, listen to the great advice offered here for free, and go for it!
Quote:I don't think there's anything wrong or greedy in wanting to be better offI hope not! Or a lot of people on here are in trouble
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MarkHi all,
Plan to:
– Get a kayak and catch a decent size jewie (mulloway)
– Get fit
– Buy second IP
– get back into bushwalking
– continue reading this forum—
MarkI'd be happy with a book "0 – 5 properties in 11 years"
I'm sure Steve did buy 130 properties. Isn't there another book "0-240 properties in 7yrs" or something like that?But for me I'd just like to get to 55 and be in a financial position to say "I could happily retire now! My properties are providing 60-70% of my income, and I should be able to comfortably live on that."
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MarkTerryw wrote:MRW wrote:"I would put all the money on the house and personal debts (and avoid the wedding! sorry!)."
That's interesting. We've just bought a new PPOR and lets just say we have a lot still owing. We have approx $100,000 sitting in an offset account that we were eventually going to use to buy another IP. Should we be putting it on the PPOR instead?
"This will reduce non deductible interest. Then reborrow and invest."
So in our case it would be better to put the $100,000 on the PPOR and then reborrow it? By 'reborrow' do you mean use the extra equity in some way?
Can anyone recommend a good book or 3 on the finance side of investing? That to me seems to hardest thing to become proficient in."(and avoid the wedding! sorry!)."
too late for me on that one I'm afraidSteve, sorry to hear of your loss. I'm sure you'll get solid advice here.
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MarkHi Mark
Just think about it step by step.
If you take $100,000 out of your offset account what will happen to the interest on your house loan?
It would increase by about $7,000 pa.Would this extra interest be deductible?
No, because it is a house loan for a private residence.So assume you had paid the $100,000 into the loan. You would still pay the same interest as before – as when the $100,000 was in the offset.
Now you can reborrow that $100,000. Best way to do this is to set up a new loan to keep it all separated.
You borrow the $100,000 and invest it.You would pay $7,000 pa approx in interest. But because this money was borrowed to invest the interest will be deductible.
This could save you about $3000 pa in tax.Hi Terry,
many thanks. Pointed out like that it makes complete sense.Terryw wrote:There are no books that I know of that cover this sort of thing. Best to keep reading the forums I thinkWithout question the 2 best things to come out of purchasing Steves book is being motivated to do something rather than sit back and hear of others doing it and this forum. I continue to pick up little bits of wisdom like the above all the time.
.
cheers,
.
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Mark"I would put all the money on the house and personal debts (and avoid the wedding! sorry!)."
That's interesting. We've just bought a new PPOR and lets just say we have a lot still owing. We have approx $100,000 sitting in an offset account that we were eventually going to use to buy another IP. Should we be putting it on the PPOR instead?
"This will reduce non deductible interest. Then reborrow and invest."
So in our case it would be better to put the $100,000 on the PPOR and then reborrow it? By 'reborrow' do you mean use the extra equity in some way?
Can anyone recommend a good book or 3 on the finance side of investing? That to me seems to hardest thing to become proficient in."(and avoid the wedding! sorry!)."
too late for me on that one I'm afraidSteve, sorry to hear of your loss. I'm sure you'll get solid advice here.
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MarkI'll show my ignorance here.
Would there be any reason to have an offset account against an IO loan?
My understanding is that an offset account against a PI loan means you'd be paying off more of the principle as the amount in the offset gets subtracted from the loan amount before the interest component is calculated? (That's not worded very well but hopefully makes sense to someone)no offset account:
interest 7%
loan amount $500,000interest = $35,000 pa
$1346 per fortnightif the repayment was $1500 per fortnight
$1500 – $1346 ($154) would come off the principle.with $100,000 in an offset account:
interest 7%
loan amount $500,000
so interest calculated is $500,000 minus
the $100,000 in the offset ($400,000)
interest = $28,000 pa
$1077 per fortnightif the repayment was $1500 per fortnight
$1500 – $1077 ($423) would come off the principle.—
MarkHi all,
Things went as planned and we were successful with the purchase of the new property.
I was completely clear on what we were to do until the auctioneer made a suggestion as we were signing.
I mentioned we were keeping our current PPOR as a rental and moving into the home we just purchased.He said it was obviously up to us but have we considered renting the new house out for 12 months to save on stamp duty!
That made a lot of sense. The wife hinted she would be more than happy to stay put for 12 months if it meant saving some money.I don't pretend to know all there is to know about property investment so would be happy to hear from you all.
From a financial point of view would a) or b) below be the better option. (Don't say not to spend so much on a PPOR as it's already done
)New house – purchase costs $683,000. How much we'd get for rent? Not sure
loan will be around $400,000 I believe.
Current PPOR – value $500-520,000. Loan $248,000 remaining.
rent? we've been told around $450 per week.a) stay in the current PPOR and rent out the new house for 12 months to save on stamp duty?
b) move into new and rent out our current home.To me a) seems like the obvious choice, but like most things I'm sure there's other things to consider?
Again, thanks greatly (especially Jamie, who's been incredible over the last few weeks. Highly recommended).
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MarkThanks Jamie,
read all just in case I missed something
(I think this server may need a reboot. it's lagging a bit today as well).Richard,
looking forward to your reply. Hope your son had a win.Terry,
Some good information there. I guess I just have to sit down and fully understand it.Any more input greatly appreciated.
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Mark
