basically, if you have equity or deposits then you will be able get finance.

Terryw
[email protected]

I wouldn’t be too concerned if I was you. AS long as the properties are growing in value you will be ok. I would not sell if I was in your situation. You may have equity in your properties which you can use to buy further properties. But if you really wanted positive cashflow you could wrap one.

Terryw
[email protected]

Hi Fizman

If you are behind in your repayments, then it will be hard to refinance with a traditional lender. You will have to go with one of the non conforming like Bluestone, Liberty, etc. Depending on how ‘bad’ you have been the rates will vary. You generally only need to show 6 months of statements when refiancing, so if you can get up todate and stay that way for 6 months, and then refinance you may save up to 3% on the interest rate.

Of course you could also refinance now with a non conforming lender, and then refinance out of it asap, but there would be break costs, and with Bulestone these can be heavy (up to 4% of the loan from memory).

Terryw
[email protected]

How much deposit have you got? and what LVR?

Terryw
[email protected]

And you may lose the tax exempion status of your home. Why not do it and not declare it. It si not worth the hassle just to save a few dollars per week in tax.

Terryw
[email protected]

If your loan is very small and you start renting out your old home it will probably be positively geared and you will be paying tax on this ‘profit’.

If you then buy a new home and borrow most of the money, then you will be paying lots of interest on your new home. To make things worse, this is not deductible.

You could increase the loan on the original home and withdraw the money to pay down the new home’s loan, but the interest on this would not deductible as the ATO regards this exenditure as of private nature, ie not for investment purposes.

One way around this is to ‘sell’ your old home to a trust (that you control). Since it is a sale you will be able get a loan upto 90% of its current value. this will be deductible as the purpose was to purchase an investment property. Stamp duty will be payable, but CGT would not as it is the sale of your PPOR. The proceeds from the sale could then be used to purchase your new PPOR.

This way you can increase your tax deductions while freeing up your equity to reduce your non deductible debt.

Does that make sense? make sure you check this with a qualified accountant first!

Terryw
[email protected]

If you are going to sell, have you considered moving into one of your future IPs for a short time and claiming that as your PPOR. you will be exempt from CGT for up to 6 years.

Terryw
[email protected]

Michael

using a company is not a good idea if buying property. No CGT discount. Using a trust is much better in my opinion.

Ig you use your car for income related purposes (such as viewing properties etc), you can claim part of the expenses as a deduction. Have a look in the tax pack for more details. A company get buy or lease the car, but if you use it for personal trips you will be required to pay FBT (I think).

Terryw
[email protected]

Hi JJ

I live in Sydney too, and would love to meet up sometime. I also have the cashflow game, so maybe we could organise a small group to play sometime.

Terryw
[email protected]

Hi Johnny

I am sure you could be the return you are currently getting on your money.

With $380,000 in cash you could buy a lot of property. For example you could put down 20% deposits and borrow the rest. Maybe go for cashflow or a rundown place that you could rejuvenate? Get one and see how you go. (eg you could theoretically buy about 15 x $100,000 proprties)

Terryw
[email protected]