Nothing confusing about it. Doing this means that the property, which being in Sydney is probably a NG prospect, is neutrally geared for them for 12 months. And the best bit is that you are financing it all for them. Hopefully you got a higher price to reflect what you are giving up, like about 5%.

To figure out why a 12 month settlement is good…[Read more]

I would apply through BT or commbank for a margin loan of 10k and put that along with your 10k into a high yielding income fund like the navra one.

“Don’t try and predict the future, be prepared for it”

Don’t second guess interest rates, whether property is going to be flat for a decade, whether the share market has gone up so much it can only go down, whether there is going to be a world recession as the baby boomers retire and cash out. Instead be prepared for it. This means to invest, and…[Read more]

IMHO you are very ready to invest right now. However you may need to think more carefully about your investing criteria. As Peter Spann says “Good Cash flow, good Capital growth, low risk. Choose two.” It seems you’ve used one of your 2 choices on good cash flow, so that leaves either low risk/low growth or riskier/good growth.

Think carefully…[Read more]

I’ve got to agree with the above reply. If it all goes pear shaped and you can’t meet your financial committments on the investment loans, the bank isn’t going to forgive and forget the debt just because your PPOR hasn’t been used as security for the IP purchase.

You appear to be uncompromising on something you think is too valuable to risk, when…[Read more]

Originally posted by ajayayyar:
Hey guys,

When do you all predict the next housing boom? Within the next year, next five years, next 10 years?

Please let me know and also any additional comments you may have.

cheers

Ajay

10:03am 25 June 2007

Don’t be shy, you are paying the PM to provide a service, make them deliver it. You should ask them how to remove the tennant. Chances are it is going to be very difficult to do so before the end of the lease.

Just to explain a bit more. There are 2 probable causes your cash flow is suffering, and it’s not that you owe $550k.
1) You have a large debt on your PPOR, and this is non tax deductable
2) Your debt on your PPOR is P&I

These two problems can both be solved if you have decent equity in your IP by selling your IP and paying down your debt…[Read more]

I’d say it depends on the value of your old PPOR (currently the IP).

Let’s assume it’s $600k with 220k owing. It would be better to sell it and pay off all borrowings. Then you could borrow 107% and buy another IP or 2. Even though your borrowing might end up being the same total amount, the great thing would be that all the interest would be tax…[Read more]

I would definitely not sell, unless the $6k/year NG loss is causing pain. Even then there are ways to ease the burden. WA has great CG prospects, why swap it for CF+ properties that have very limited growth potential.

Here’s a couple of options to think about

1) Open a new $60k LOC, secured against the property you’ve had the longest as it would…[Read more]

Originally posted by lifeX:
Even if the granny flat/ 1 br home is approved by council, I would doubt you could rent it out separately no matter whether you call it a spare room or a granny flat or an igloo.

I would seriously approach the council and plead ignorance or get a lawyer asap.

Live, Learn and Grow

Lifexperience

It is quite legal to…[Read more]

I have 2 kids under 3. Everyone’s different, so here’s what I do. I focus on producing cash flow through by J.O.B. and outside my work hours I spend with my family not doing anything IP related. I put a team together to find the deals, finance the deals, do the legal work, do any renos, manage the property, do the accounting. I set strategy and…[Read more]

Originally posted by Old School Skata:

Um if you still own the properties, don’t you have other expenses you still have to pay for rates, insurances, management fees, repairs etc?
These expenses seem to be forgotten and from my workings in excel these can be pretty substantial especially when you index some of these for inflation (Show me a…[Read more]

Here’s another option to consider. For that amount of money and at this stage in the property cycle, IMHO the best place to find positive cash flow from property is in an LPT (listed property trust). The underlying asset is quality property, you can get net yields of 8%, you can gear at ~70%, and whats more they have a history of strong capial…[Read more]

Originally posted by APerry:
Hi firefox,

In that price range, you might be able to pick up a decent place in Yarraville or West Footscray. They are both very close to the CBD, have good infrastructure and are rapidly moving upmarket.

Regards
Alistair

Agree this this. Also consider Coburg or Preston which are inner northern suburbs.

Don’t confuse these 2 issues
1) name on the title
2) name on the loan

It is #1 that determines who receives the income & deductions on the property, not #2. Sometimes what may happen is that the highest income earner has their name on the title to maximise deductability, and their and their partners name are both on the loan for servicability reasons.