Also if you dont mind what does a normal day look like for a mortgage broker?

The dream
Wake up at 10am, check emails. Then check out netflix to see if the latest episode of your favourite show is available. Pause the show while you take a few calls. Then head off to Bunnings to buy something. Take a call while walking back to your tax deductible…[Read more]

No, it is probably not a good idea to sell a main residence to pay down investment loans. You will be giving up your only tax free investment and you will be paying tax on the increased income. Plus you will need to find somewhere to live and if you are paying renting you will have to pay that with post tax income.

If you move in you can claim lmi on the remaining 5 years.

If you discharge the loan you can claim any remaining lmi unclaimed in that year of discharge.

It will be based on title unless one party makes application for the courts to make a property settlement.

I advise against 99% 1% ownership in most cases. Owning one percent of a property is pretty pointless. Consider the effects on borrowing too.

It means if you are the owner and mortgage the property you promise, as mortgagor under the mortgage agreement, must prevent people from lodging caveats. If someone lodges you must do all you can to have the caveat removed.

With a company new investors can be introduced by transferring shares without triggering stamp duty in most cases, so it is more flexible in this regard.

Banks generally won’t like to take income from property renovation into account for servicing. Property sales are considered one offs and even if they would take it into account you will need 2 full years tax returns with the majority of lenders.

A way around this may be to set up a company to do the projects. If your intention is profit making…[Read more]

Beware – lots of confusing comments in this section.

1. Don’t draw it down. If you borrow to pay off the main residence loan the interest won’t be deductible and your $120k split will be a mixed purpose loan.

2. With extreme care. If you pay for something with cash and then take money from the loan the interest will not be deductible because you…[Read more]

I have posted a new thread of a few ways a trust can help improve borrowing capacity. see https://www.propertyinvesting.com/topic/5031860-trust-strategies-to-increase-borrowing-capacity/

With serviceability it is not a matter of which lender, but the situation and the structure.

Land tax is too complicated to list the differences across all states. Even comparing 2 states is complex.
In QLD each trust could get a separate threshold of $350,000. Same with companies.

Ethan

Trusts can actually increase serviceability in many instances.
Trusts can negative gear just like a person can
Land tax on the first dollar is only for land in NSW. In QLD a trust owning land gets a separate threshold for example.

The answer to most who ask me should they use a trust to own property is ‘probably not’.

The risk of being sued is overstated by spruikers who try to make money out of selling trusts – most of them unqualified too.

Tenants can and do sue, but it is very rare. I have been investing in property for over 20 years and no tenant has ever attempted to…[Read more]

Benny

DIfferent lawys for land tax to income tax. A property could be a main residence for CGT purposes yet not a PPOR for land tax purposes, and vice versa,

In NSW for example it is much harder to get the PPOR land tax exemption for a property you have moved out than it is for CGT.

Yes valuers actually can tell you what it would have been worth at any point in time.

It could also be exempt from CGT for up to 6 years.

Benny – there is no declaring of which property will be the main residence – until the sale of one of them.

You could do 3 things
1. Nothing, but work on getting a borrowing capacity.
2. Lend some of the money to someone who does have a borrowing capacity
3. joint ownership with someone who does have a capacity – whether direct, via a company or trust structure

But get legal advice before considering 2 or 3.

Why look at creating a trust?
Why pay PI on an investment property?

I think you should do some more reading.

One of my clients has purchased 2 psotive cashflow properties in innner Sydney. One doubled in value within a few years and was cashflow positive from day 1.

This is legal advice so best to speak to a lawyer as it relates to state taxes.

See s 12 Land Tax Act
http://www.austlii.edu.au/au/legis/sa/consol_act/lta193690/s12.html

12—Tax in cases where there are two or more owners

(1) Subject to subsection (2)

, where two or more persons are the owners of land, the same amount of land t…[Read more]

You would generally want to pay off non deductible debt and reborrow to invest. This way you are increasing tax deductions.

But if you intend to move out of the current main residence you may not want to do this.

One strategy, of many, is to buy the future main residence now using a 105% loan, rent it out gain some tax advantages and then after…[Read more]