Congrats to the winners. Looks like I didn’t make it.

Oh well, Steve, you wouldn’t happen to be able to e-mail me would you?

Travelled about 1,500 kms by car last weekend searching for property. Would like some help.

[email protected]

Cheers,
Aaron

there were eyes looking at her over my undies

LMAO!! After reading that I nearly choked on my mineral water!

~ Heaven doesnt want me and Hell is afraid I will take over! ~ :þ

Hi KK, I checked that thread, and realised that I didn’t answer properly in the last post when I said “That’s all very correct Snow.” I must not have read it properly, ie the bit about the old ppor not being deductable when it became an IP.
All that I can say is that I’ve asked my accountant and he assures me that all expenses become deductable, including the interest on your loan, provided you haven’t bumped it up by refinancing. The deductibility of your loan has been confirmed by Noel Whittaker on at least three occasions in the Sunday Mail 27Apr03, 15Sep02 and 17Nov02. (I’ve still got copies of the articles)
Fittings and the building depreciation would also be deductable, but you would probably have to get a Q/S report to establish the value of these at the time of transfer to an IP.
I find it difficult to believe that accountants would be saying otherwise. Perhaps the circumstances were different. Where are all the beancounters in this forum?
Sorry Snowdog6, I should have read more carefully!
Jim.

Hi Mini,

Thanks for your response to each point, particularly so early in the morning. Good points you make. But this ain’t about who wins the argument, or who can come up with the longest list of names of multi-millionaires.

I reiterate, it’s a matter of which combination of strategies suit an individual, given their circumstance. As others have already stated, they are looking at a mix of both depending on their situation and that of the various markets.

I raised the point about Steve’s risk on interest rate hikes to incite such a response. Thank you for that, I’m glad to see that I am on the right track. I had attempted to download the extra chapter, but am still having difficulty with the Adobe program.

In thought, regards Phil.

Serendipity that’s really a lifestyle choice that probably only you can answer. Some serious investors have actually sold their home so they can maximise their investment property portfolio. All I know is that you should be able to rent out a property for a lot less than it costs to buy the same property, particularly in Melbourne and Sydney, where the property owner would be lucky to get 3% gross rental return. It can’t be too different on the peninsular. If you rent, you don’t have to worry about rates, maintenance and above all TERMITES! It must be a bit of a pest having inspections (pest inspections![]), and the possibility of being kicked out at the end of your lease if the owner has sold the property etc.
I would be happy to rent and invest my PPoR’s worth, but my wife has very different ideas. She needs the sanctity of her own home, so of course she wins out[].
Best wishes for your new lifestyle.
Regards, Jim

Renée you won’t have to pay mortgage insurance if you include the equity in your current property. It may be better, if you have enough redraw available, to fund the required deposit on your new IP, ie so you won’t need mortgage insurance if it were “stand alone”. This way your properties aren’t cross collateralised. I’m sure our resident brokers could advise you on this. Simon??
Jim.

No Renée, that’s not what I said. Your payment into your IP isn’t taxed. It just saves interest by reducing your principal. I’m just saying that the interest it saves would have been tax deductible anway, so you are only saving the bit that would be left after your tax refund, ie $36 in my example. The tax rate is just your marginal tax rate, ie the tax you would have to pay on any extra dollar of income you earn on top of your current wage. You have to have a taxable income of over $62,500 this year before you cop 48.5% tax.
The ING direct account is actually not as good as your offset account, because you have to pay tax on the interest you receive, eg you put 1000 into ING, you’ll get $47.5 in interest over the year. The tax man will then say “I’ll have 48.5% of that in tax thanks”, (if you are in that bracket) so you’ll be left with $24.46 after tax, compared to $36 with the offset account.
My comparison of the personal loan would work like this: Your personal loan is at say 10.5%, and if you put $1000 extra into that, then you would save $105 in interest. This isn’t tax deductible, so it’s still a saving of $105 “after tax”.
Hope this makes sense. Sorry if I’m a bit confusing, it’s my geeky maths background.
Regards, Jim

see…..this is what happens when a man thinks he is right

CHAOS!! [][][]

~ Heaven doesnt want me and Hell is afraid I will take over! ~ :þ

BOUNCING!! NOT DRIBBLING!!

sheeeesh…..if my b00bs dribbled Id be worried!!
LMAO!!

Cam….I bet one of you NEVER forgets tho!! hahaha

~ Heaven doesnt want me and Hell is afraid I will take over ~ :þ