I would advise against option 2. Now is definately not the time to be taking on a lot of added debt.Consider whether the new property is an asset or a liability. Also keep in mind that there is a good chance that property in Australia is set to follow the large downward corrections seen in the USA and the UK.High immigration rates and housing…[Read more]

I agree with much presented in the underlying article…The property market in Brisbane will face the same challenges which all the other major centres in Australia will.http://www.brisbanetimes.com.au/articles/2009/04/27/1240684397986.html?page=fullpage

SteveMcKnight wrote:
Happy Easter!I am about to sign off for some family time, but will be sure to answer this post on the other side of Easter.Regards,- Steve McKnight

Same to you and your family Steve! Hope you all have a relaxing break and return refreshed…Be wellregardsNeil

Anybody seen Steve around the forums lately?I'm interested to see his reply/comments on the questions posed in this thread.Also, does anybody know whether Steve ever did get around to writing a "lengthy answer" on the topic of how he financed his properties? He mentioned he may write a report/newsletter in the thread "how did Steve McNight finance…[Read more]

Qlds007 wrote:
The mortgage rate and the Fed Rate are 2 totally different indices.I see last week Fannie Mac dropped their rate to 4.84%.

This is true, but they are linked. The question is why the gap between the two rates are so large. Historically they have been far closer. I would guess that its related to the perceived risk which the banks…[Read more]

Qlds007 wrote:
One issue if they cant get finance these days.

hi RichardDo you know of any way of obtaining finance on US homes? I noted in one of your prior posts that u know of a lender who will do 65% loans… is that the only one you know of?Also, I'm curious about all these "cheapies" – houses for under $5000 – some even for under $1000…[Read more]

jcso99 wrote:
Can somebody explain something to me? If the Central bank's interest rate is close to 0% and the cashflow from the property is +ve (assuming that the gross yield is around 20%). Why would the bank still provide a lend at 70% with interest rate near the 7%, rather than at 3%? Is it because:1) they don't like the tenant?2) they don't…[Read more]

Don. wrote:
Mr Shannon said he had more than 100 lower-quality homes listed in the Detroit metro area for sale for just $US1.It is interesting that a journalist with make a comment like that without explaining the complex issues behind these properties. Is it unusual to place a hyperlink to the businesses site in the articile for online…[Read more]

elkam wrote:
Hello neilvsYou seem to forget that not all the rent is availible to service a mortgage. Generally 20% is already earmarked for expenses, excluding interest payments.Council rates, water rates, insurance, repairs, agents commission/letting expenses, vacancy periods and possibly land tax also neeed to be paid. I guess the banks re…[Read more]

I've asked my tax consultant about the allowability of interest deductions from a home loan and she has confirmed that this is indeed allowed, but that it would be better cost wise to split the loan and use one portion entirely for share purchase purposes. This isolation of the part of the loan used exclusively for share purposes will lower my…[Read more]

duckster wrote:

neilvs wrote:
To all you financial/tax experts out there:I know that i can go to the bank and take out a loan specifically for the purposes of purchasing shares as an investment.Say i borrow $100 000 through some type of bank loan.Let's assume that in under 12 months (during a certain tax year) i have made $10 000 profit…[Read more]

I wonder if anybody is wondering why Steve himself hasnt commented on this topic?I did wonder but then i thought to myself: if i was Steve, i wouldnt be letting on to any material secrets of the trade such as exactly how i did my financing on a free forum like this one… I'd keep that kind of nitty gritty detail to advanced courses and let people…[Read more]

Terryw wrote:
There is nothing hard about financing properties. If you can keep coming up with the deposits, you can keep getting finance.

Hi TerrySo let's say I want to buy a $200K investment property. I have $40K deposit, but that's pretty much all i have.I can also show (the bank) that the property pays for itself in that it is cashflow…[Read more]

SteveMcKnight wrote:
Hi,I'm struggling at the moment on a personal level. My wife is quite ill and in hospital, and I have needed to drop everything to look after the children (and mother-in-law). I have very limited time and am trying to help with what little time I have.The best I can do is to write a lengthy answer to this question and offer…[Read more]

Thanks for the reply Richard. This has given me some 'hope'. However, i'd very much like to hear from other brokers and/or investors too who can comment on the points i've raised.Recognising 75% to 80% of rental income is still not great news – the average hard working person who is still heavily dependant on his (very finite) salary will very…[Read more]

What's a PPoR??

I'd also like to know the answer to this. Give us a tip at least I find that interesting when banks are nowdays insisting on massive deposits for investment properties – between 30 to 40%…So you may find a property that's cashflow positive with only a 10% deposit, but the banks wont lend you the money – even though your income from the renting…[Read more]

hi DanThanks for the reply. What you say makes sense. I guess the only disadvantage of the dedicated investment loan account would be the interest rate charged (i currently am on a variable mortgage rate of 5.04% – expected to drop soon if the RBA does the right thing next tuesday)

ASX currently at 3683.3 according to official website.Can anybody explain the graph , or to be more specific, the x axis. I assumed it was the date, however it currently has the following values: 10, 11, 12, 1, 2, 4 which clearly cant be the date.please HELP

hi RichardThanks for the reply.I had always heard that the deciding factor on whether interest is tax deductable was the PURPOSE to which the money was put and not the SOURCE of the money, i.e. what type of loan account.I'm guessing that loans for the express purpose of purchasing shares will attract far higher interest rates than what a mortgage…[Read more]