Ausprop, the news report I heard said they were moving all their offices there giving the nikkel operations as a good reason for doing so. Should have known those reporters got it wrong again!

The Mortgage Adviser

There is no reduction for moving in. It just stops being payable from the day you move in until you move out again.

It is a good idea to get an independent valuatin done to know the value of the property on the day you moved in and keep this for when you sell the property and have to pay capital gains tax.

The Mortgage Adviser

As long as it was available at market rent, you can claim.

The Mortgage Adviser

Your agents were ripping you off!!! I would slap any agent who tried to hit me up for a 4% commission!!!

That aside, how do you know that a good agent could not get you $10,000 or $20,000 more than you got?

The Mortgage Adviser

Unless you want to provide full financials and a good indication of exactly what you want to achieve, no-one can answer this question for you.

You were provided with options to do either one. You now need to take some responsibility and make your own decision.

If you can afford to, buy an IP. If not, pay off your house possibly using the offset structure.

It is ‘UP TO YOU’!!!

The Mortgage Adviser

Did you guys hear today that BHP are setting up their world headquarters in Perth following their purchase of WMC??? That means they are bringing the HQ from the UK and closing the VIC support office and setting it all up in your backyard.

This will be huge for Perth!!!

The Mortgage Adviser

It is important to know the CURRENT value of the home as your LVR is very high otherwise.

If you have read the LOC and Offset discussions, you should know how they work.

Simply, you obtain a standard interest only loan. You attach an offset account to this loan. An offset account is just a normal transaction account that links to a loan.

All income is deposited into the offset account and only the interest only payments are made automatically to the actual loan account. The cash balance in the offset account should increase if you have surplus income from your investment and work income which will reduce the amount of interest payable.

How this works is that if your loan is for 300k and you have 20k sitting in the offset account, the lender will only charge interest on 280k. If you take out the 20k, the lender will charge interest on 300k again. The loan balance never actually changes.

When you get to a point where the offset account matches the loan amount, you can just transfer the cash and get rid of the loan. You need to be good with money to use this structure properly. It is also most commonly used for non-deductible debt.

The Mortgage Adviser

I hope you educated the client as to the negative aspects of their decision???

The Mortgage Adviser

I think you need to look at two things seperately before considering whether a property is worth holding. Any property can be cashflow positive depending on how much cash you put in at the start. If income exceeds expenses (excluding tax and depreciation), I consider it positive.

I then look at the cash on cash return. If this is good, then the investment is a good one.

As for loan considerations, interest rate movements can make a positive property turn negative and vice versa. This also has to be considered.

The Mortgage Adviser

Mark, you must be kidding yourself if you think this forum is only here to help people. The owners have a business to run and they sell products. A forum like this, and with so many members, costs a fair bit of money to run. If you don’t like the ‘obvious’ agenda, why come here?

You clearly have a negative attitude about what you can or can’t do with your life. Anyone can make money with property or other investments if they are willing to do the work or make sacrifices. I also don’t think you will find any intelligent person here saying you can make a million overnight!

The Mortgage Adviser