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redwing
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@redwing
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Post Count: 2,733
December 7, 2003 - 1:18 pm
Luckyone..
I believe the $12 per $1 000.oo on the loan is each month, it is not ‘extra’ it is the payment.
My line of thinking was with a tenant paying rent and you the owner adding to that payment you could rapidly reduce the amount of ‘total’ interest over the term of the loan, thereby building equity, possibly turning a – geared property to + geared a bit quicker also !
Obviously as perterp has pointed out there are oppurtunity costs involved too if you are putting a lot of your investment capital into rapidly reducing the one loan.
Thanks to peterp for also adding to the post with the figures… fascinating what’extra’ payments can save you and always worth keeping in mind !
Hope some of you found this as informative and thought provoking as i do
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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December 7, 2003 - 1:06 pm
Mini
THANKS for not only posting these properties for others to consider, but, also for your helpfull advice given and the obvious effort you’ve gone to answering some of the Questions posted herein!
All the best []
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 6, 2003 - 8:50 pm
Muppett
Because Fannie Mae and well Fannie Maenot, when i was in the states they called the “bumbag’ i was wearing a’fannie bag’ confused me initialy, made me feel all feminine ‘what.. i’m wearing a what’ Met a Texan who embodied what i percieved a Texan to be.. loud and spoke with a drawl. The only place he knew in Australia was MELBORN. enjoyed my time there though.
Back To KIWI’s they’d do well on survivor, foods run out.. oh well eat the other contestants. used to work with a few Maori’s on the pearling boats, can’t believe KIWI’s eat Sea Urchins [xx(], used to think the chinese eat a lot of weird stuff, Maori’s more so, they’d even eat the chinese [:0)]
REDWING
redwing
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@redwing
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December 6, 2003 - 7:03 pm
Reminds me of the story about lotto winners and how when they revisited them years later most were broke again.
or
The story about a NBA star in the USA who many years later was washing cars at a drive thru car wash, blaming his manager and friends for squandering his money.
SO as Sooshie and Melanie said you need to go and see someone well versed in looking after OPM, paying off any personal debt is a great place to start, saving you $ in interest. Then speak to a recommended accountant, preferably one whose views are along the same lines as your own.
Cash, Property and Shares are the main financial areas. And educate yourself about +geared properties and such before you jump in.. reading from 0-130 properties and other books (see old post re: books i have read) is a great start.
Melanie says ‘a fool and his money are soon parted’ i wonder.. how a fool and his money got together in the first place[:0)]
REMEMBER
financial winners borrow money at a tax deductible 7% to purchase quality property and shares, financial losers borrow at a non-deductible 20% to ‘invest’ in stuff like appliances and furniture that tumble in value once they leave the showroom- Noel Whittaker
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 6, 2003 - 3:59 pm
Looking at a link posted for chrisbatten.com.au he recommends ‘not’ putting your PPOR into a trust and recommends discetionary trust for IPs, however, i’m thinking with the benefits of the trust it may still be a good idea especially if you ‘trade up’ and convert your PPOR into an IP in a year or two, next PPOR same..
Also with your PPOR as an IP the benefits of renovations carried out etc become better financially wouldn’t they ??
spoke to my friends sister (an accountant) who said costs to set up the trust would be approx $800-900, but she pointed out as discussed here that we would essentially have to sell the properties to the trust thereby incurring stamp duties etc.. she offered a free 1/2 hr session to make sure i make the right decission before moving on.
just thinking, if we sold to the trust, we would have to refinance wouldn’t we ?? with the trust taking on the loans ( and the rates up a bit now)
on the plus side though.. would refinancing back to a 25-30yr loan on the properties then actually ‘free’ up the equity in the properties into ca$h ???
Just thinking aloud here and probally getting carried away.. definetly have to speak to accountant and read an informative book
“wealth guardian” or “trust magic”
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 5, 2003 - 11:03 pm
Melbear – music cd’s. chocolate bars etc [?]
Sounds like a Christmas shopping list!
Guess, it’s expensive, it’s effective..thats why the rich use it!
The idea of your PPOR being able to be an IP appeals to me, another idea is the old one of rent or buy therefore PPOR becomes 3rd IP.
Wish i knew about trusts earlier, would be easier, still it’s all a learning curve.
For those out there that have trusts or an idea.. what would be the cost of incorporating the properties into a trust? or setting one up ? or best to do as ENJOLADY has done and incorporate into the trust from ‘now’ on in ??
Not asking for detailed accounts just an idea of cost’s if possible, thanks for the help[^]
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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December 5, 2003 - 10:51 pm
Either “no-one” is doing well or this post is in the wrong area ??
DUNNO ??[xx(]
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 5, 2003 - 9:25 pm
Cant remember…. what do kiwi’s call ‘thongs’ and i mean the ones on your feet???????
REDWING
redwing
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@redwing
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December 5, 2003 - 9:20 pm
Mortgage Hunter
“it is’ a nice place, large Dam nearby, not too far to the coast, i liked it, but like i say, a lot of very old properties (No depreciation?) “lots” of these properties for sale also, can’t believe there are that many tenants in the town and forsee a drop in rental $’s as the local real estate agent said a lot of outside and interstate investors had been in… pretty cluey guy, not long after TT aired and he was advertising the properties as + Geared []
Also on my search for Ip’s i’ve noticed a few where it states “owner will rent back/ sign 6mth lease” possibly the cynic in me but i see things like this as an attempt to attract an investor to a ‘tenanted’ property, however after 6mths the owner moves out, no more tenants and the 6 month rent was built into the sale price [}]
Ya Think??
REDWING
redwing
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@redwing
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December 5, 2003 - 7:39 pm
BAD MOVE..
As i understand it you would have your old PPOR as an IP… with most of the loan paid off ??
– this means “no” or “little” tax benefits to yourself, as the loan is low.
Your “new” property that you purchase as a PPOR you would then be paying off with a new loan ? and interest would “not” be deductible here either.
My view would be to sell the old place, use the cash to buy your new place, use the equity created in your new place to purchase an investment property (or two depending on your situation) and if you are looking at + gearing that may be the case !Or re-finance in a creative manner to best suit your individual needs.As you’d be starting ‘fresh’ maybe a trust would be valuable ?
One of the mortgage guys on this forum would be able to assist i’m sure (Motgage Hunter?)
Again- Only my view
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 2, 2003 - 11:46 pm
Something from ‘the west’ re the rates.. i believe they’ll go up also, dont trust that bank manager.
HOME borrowers should brace themselves for an interest rate rise of up to half a percentage point today, economists have warned, after fresh figures yesterday revealed that Australia’s debt-fuelled shopping spree marched on.
Economists said the Reserve Bank is almost certain to announce a second consecutive monthly increase in rates after a surprise pre-emptive rise of 0.25 of a percentage point in November.
“The writing is on the wall for another lift,” CommSec senior analyst Craig James said.
“The real question now is whether the Reserve Bank opts for the hammer or the mallet.” While most forecasts are centred on an increase of 0.25 of a percentage point, which would lift repayments on the average WA home loan $26 a month, Mr James said he “wouldn’t bat an eyelid” if rates rose 0.5 of a point.
The case for a rate rise was reinforced by figures showing the Rugby World Cup helped drive retail sales 1.2 per cent higher in October for an annual rise of 8.6 per cent.
And building approvals for the month rose 1.6 per cent to a year-high, underlining the Reserve Bank’s concerns about a property bubble.
WA helped fuel the building boom with its approvals leaping 15.5 per cent in October to 2240 – the biggest month since June 1994 – for an annual increase of nearly 37 per cent.
But the executive director of the WA Housing Industry Association, John Dastlik, said the spike was a result of “blockages” in the approvals system.
The Reserve Bank is increasingly concerned about rocketing household debt as Australians have taken advantage of cheap rates to spend big and invest in property.
And now a laugh
Two bored casino dealers were waiting at the craps table.
A very attractive blonde woman arrived and bet twenty-thousand
dollars
on a single roll of the dice.
She said, “I hope you don’t mind, but I feel much luckier when I’m
completely nude.”
With that she stripped from her neck down, rolled the dice and
yelled,
“Mama needs new clothes!” Then she hollered…”YES! YES! I WON! I
WON!”
She jumped up and down and hugged each of the dealers. She then
picked
up all the money and clothes and quickly departed.
The dealers just stared at each other dumbfounded.
Finally, one of them asked, “What did she roll?”
The other answered, “I don’t know I thought YOU were watching!”
Moral: Not all blondes are dumb, but all men are men.
REDWING [:0)]
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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December 2, 2003 - 5:51 pm
A confusing topic and from the posts definetly worth getting the right accountant and right structure put into place.
A trust could be benificial as we’re planning additions to the family and with one partner off work it may be worth it.. it’ll be interesting to see the figures laid out in a ‘for’ and ‘against’ argument with a competent accountant
REDWING
redwing
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December 2, 2003 - 5:44 pm
Perth… Morley ( not in the hills[])
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 2, 2003 - 5:33 pm
“If your stupid – How do you know when your happy”
Fatboy- agree with you on the Super issue, the funds loose money hand over fist lately then charge you fees for the pleasure. i know retirees who’ve had to get back into the workforce part- time.
Look after yourself- no one else will
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 2, 2003 - 5:25 pm
Well done Mini..
as evidenced by your posts a lot of work/time/effort/travel obviously went into your deals.
As always good to see people doing well.
At the moment we’re adding value to our PPOR, having just got married. recently put reticulation throughout front and back yard (D.I.Y) for less than quotes for front yard, along with other work ( you can always add value to your own place by doing renovations and building equity )
looking at getting properties revalued and seeing where we stand before our next move. according to REIWA in the last 3 months our PPOR area has jumped up 15% value and 37% in last 12 months (median house price)
Keep the stories coming !!
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 1, 2003 - 10:24 pm
Check “all” the attached conditions thouroughly with the property to avoid potential headache!!
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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December 1, 2003 - 10:17 pm
I also would’ve thought with a lot of investors getting into the market of late and intrest rates going upwards.. they’d be desperate for tenants and be offering incentives and reduced rents to attract a tenant rather than carry the cost themselves.
Property boom-lots of property on the market and i think a lot was investor driven..
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 1, 2003 - 5:36 pm
i remember buying my first IP- which i regret selling years later, and intrest rates were at 13.5% also remember the bad old 17% days.
David kosch on Sunrise CH7 was talking about how the reserve bank feels comfortable at 5.5% and at the moment they’re below that ( 5%)and the economy is picking up… reminds me of the “cycle chart” for all investments- the wheels turning
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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@redwing
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December 1, 2003 - 5:30 pm
R.Kiyosaki
talks about the effective usage of a ‘company’ in his book, i presume as things are slightly different in Australia a trust would be the correct vehicle.
Just started work with a new partner tonight and her sisters a partner in an accounting firm… what are the chances huh
Melbear suggested ‘Trust magic’ book and i’m looking at purchasing steve’s ‘wealth guardian’
the issue is an interesting one and it’d be interesting to see the costs associated with transition of the properties as i don’t plan to sell them anytime soon.
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
redwing
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December 1, 2003 - 5:23 pm
My Guess…
steve’s researching it for his next book [}]
Oh and we all get a cut !!
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”