Forum Replies Created
Banker,
Finally we have someone who has the balls to stand up to popular belief,
You have mentioned what is only the start in the benefits of crossing- and YES I agree with with the downsides, but as you have stated, as an adviser, all angles and approches to investments must be included. To simply rule out CROSSING, is to short change the potential gains of people, in many instances……
Thank you, Thank you, Thank you, for your interpretation, objectivity, and courage to stand up to what has been a bashing on this site…..
Let me finish by saying I cross on my own investment loans and am better off from this experience- once again, it is not good for all…….
Timbo,
I am at Castle Hill in Sydney if that helps, refer to the link below. Free consultation!
Ask for the 10% guarantee in writing, I would like to see that, as a matter of fact, if he gives this to you, please let us all know. A $1Mil property will gain $100k this year, his $45k fee is peanuts. i.e. $55k profit in the first year and $100k thereafter………….. Please tell me this guy is real!!!!!!!!!!!
And if the guarantee is not real then seek other advice- you will get it for free if you look in the right places.
I am always up for a conversation on property / investments and the like,
Many banks offer more than offset account, some you have to pay, others it is a part of the package. I am not sure if you will need to change your loan – as I do not know your bank and product you have.
Your right, Leigh it is…. just curious.
Dan, On another topic- read my letter on the thread "Advice needed about bank fees" What is your thoughts? as I mentioned earlier, I am off for a swim now, but I would like to here from you in regards to this………
Please criticise/ breakdown as appropriate….. Thank you in advance……
As mentioned above, I would not give advice making assumptions – I wrote: "but I have not the four hours to clarify all the assumptions"
The point that everyone is completely different, is clear to me, that is why I stated in an earlier post people cannot plaster items such as "go getters" and/or "cautious and like to sleep at night", you must substantiate, not give advice around items/ topics that may or may not be correct. What you are saying to me is eaxactly my point I am making on this thread.
I think we are discussing the same thing????? Where did you get Leigh from?
This is a critical argument to the whole banking and finance, and the Mum and Dad mortgage situation in Australia that is often misguided with fear comments. It is important to understand that the common belief of our parents are not exactly correct.
It is definitely not coffee talking……. but a defense on an important issue that requires addressing.
My objective is to show people another way,
Your right WJ is in the firing path, but surely you do not anti-respond without having a think about your response.
and YES there are a lot of assumptions, but I have not the four hours to clarify all the assumptions- life is full of assumptions…
MD2- are clear as they are disciplined- I covered this one off.But you are right, enough said, I'm going for a swim….
WJ Hooker wrote:Agree with all,
As stated its a matter of Horses for Courses.
If you are a go getter then go interest only and max out – hope that capital gains brings in the big bucks.
If you are cautious and like to sleep at night then go P + I and make some slow gains.There is no correct answer, its easy to be correct years down the track, but what if property crashed and you lost your wages, had an accident etc.
This is where you have it a little incorrect….
Sleeping well at night is much easier on I/O then P&I. And please do not label people as a GO GETTER…….Why? Do the numbers….
You will find that by purchasing two properties under a I/O structure is better than one property under a P&I – both in terms of cash-flow and growth…… Do not simply follow popular opinion and plaster comments over the forum that cannot be substantiated due to your own fear. Substantiate with fact as opposed to fluffy comments that are what our Mum and Dad's have told us. To be frank, if I listened to this hogwash, I would not have retired at 34. Further When MUM and Dad Australia go to sleep at night with a reasonable P&I mortgage, and wake up in the morning without a job for one reason or another – I consider this risky……. But when I go to sleep and wake up without a job (while I am interest only) I will get my tenants to foot the bill, I will also have equity from the properties to fall back on……. Oh but you are happy to have Mum and Dad lose there property to the bank…….. Be careful about the advice you give, you must be able to substantiate your advice???
And YES not everyone wants the best out of life, or wants to retire young, or wants extra cash to live off, or wants spare cash to buy items as they wish…….. So those people need to hang around you……….that is unless you are just jumping on the wagon of of common opinion and fear responses…..
I am quite happy to sit down with you to show you how my life has FAR FAR less risk than you with a P&I strategy…the question is would you show me how P&I is better for me?
Once again P&I is a strategy that should be used in very limited circumstances (like lack of discipline). But to use it to sleep at night is effectively negative to the argument. Lets Compare: Mum and Dad 1 (M&D1) v Mum and Dad 2 (M&D2).
M&D1 pay P&I on a $350K loan- wake up with no job due to sickness etc, who pays the next months payment? OK, you can chip in here as you gave the advice????? Yes income protection can save you from sickness- but not lose of job.
M&D2 pay I/O on a $350K loan (Extra money is put into an offset account)- wake up with no job due to sickness etc, who pays the next months payment? Well that is a simple one………. The money is in your offset Acct , WOW! I am now in a happy place! This is commonly called a buffer, this coupled with income protection puts me in amongst the least risky property owners in the country………
The next step is to purchase an investment, as you have established your cash-flow and equity, this will further reduce your risk, i.e. an extra income source. That is increasing with inflation.
WHAT IF PROPERTY CRASHES, was your next issue? Given that you have extra money in the offset account, you can now afford to buy property at the low point of the market? That to is favourable……
http://www.birchcorp.com.auSteve,
Sit down with someone who has done this, ask their story from start to finish. Take on board what you like and discard the rest.
The best gains will be made by someone who will be able to mentor you over a long period of time- for that you will pay big dollars unless you consult an intelligent Mortgage Broker who will be paid a trail on your loans (i.e. they will be paid, so you have access to their knowledge). You cannot and will not be able to absorb the required 15-20 years of knowledge required on a forum response. Your question should be along the lines of who has time to guide you in this new phase of your life.
I purchased my third property on a credit card,
You must assess your own situation carefully….
I bought a $200K property that is now worth $435K, The interest repayments on the card were minimal compared to the outcome, and this did not have a significant bearing on serviceability (you must have this calculated).
The key to any property investment is getting the loan, if you cannot borrow the money, then you have to be creative…..
I am with Richard on this one…………
I have listed the two important points for you to consider (both of which suggest your solicitor is wrong):
All applicants and/or their spouse/de facto have not owned a residential property, jointly, separately or with some other person, in any State or Territory of Australia before 1 July 2000.
All applicants and/or their spouse/de facto have not owned on or after 1 July 2000 a residential property and occupied that property jointly, separately or with some other person in any State or Territory of Australia for a continuous period of at least six months.
I do this often,
Just set up several offset accounts. The offset account A may be for the investment related acquisition. The ATO is real……..
Comments from above, You must have an income for the interest to be tax deductible. If NWS does not distribute a dividend then interest is not deductible that that financial year but may increase the cost base for CGT purposes.
Yes I do,
Brendan painted my entire external home (brick) for three thousand one hundred and fifty dollars (He provided the paint and spent over two weeks, two coats, windows, doors and no more gaps where appropriate). My home is two stories on the side.
refer to http://www.birchcorp.com.au under asociates and articles for his details. I have nil ties with him. I place people on my website that offer good value, I have many properties and people often ask me who I use.
Hi 642 Pete,
I own several homes in the Blue Mountains, from my experience the Blue Mountains council is very conservative in terms of dual occupation. Although they have permitted in the past, you are not likely to get this passed in more recent times. This is majorly due to the restrictions on hard surface area vs lot size. If dual occcupation is your thing I would almost certainly do this in Penrith with a more relaxed council and land zoning that is relevant. To this I add, your rates are almost double in the Blue Moutains.
The Blue Mountains provide a good return in terms of growth, particularly Lapstone, Glenbrook, Leura, and Wentworth Falls.Ryan,
….and the exit strategy for buying a "whole bunch of cheap" is what (particularly if the property market trends south and you have purchased a whole bunch)? Is that cheap, as in nil growth -cheap. Oh that is right, all properties are the same and grow equally, as you mentioned in another response this morning.
You may need to back up your response with a little evidence, as you may be misleading people.
As above, thank you for clearing this up……
Lets look at how we all make generalisations:
The positive geared people can make $2300 p.a. per property (sometimes less, sometimes more), WOW! what a tough way to earn $2300. Twenty properties later you can have an income of $46K (sorry, less your 31.5%). BUT, they make nil growth.
The negative geared people can pay $8300 p.a per property (sometimes less, sometimes more) WOW! It actually costs you money (sorry, you get a 31.5% tax deduction -assuming this marginal tax rate). BUT you have huge capital growth- do you?
The thing I like about property is there is plenty to go around. People have varied opinions / views on making money that are channelled around there life's experiences and network of friends.
The fantastic thing about people that have opinions far and wide is that it allows many opportunities available so we may all become wealthy, provided the investment strategy is not flawed. There is no one secret recipe. We all have our ways of creating wealth, and they all have an element of truth. But what I can say, is there are some better ways………
You have a lot of opportunity. You are in a nice position. It may be worth your while sitting down with someone to start learning and learning well. A several paragraph response should not be enough to outline /plan your future. I know Richard who often responds on this site is in QLD.
What will be the value of each duplex? The rental yield, although fine, does not warrant all the work?
This is only a numbers opinion (removing your heart out of the equation).
Yes, all loans in your case should be interest only, particularly as you have discussed a property portfolio in the future.
