IMHO if you still have non-deductable debt (on a PPOR for example) go for IO on IP’s. Otherwise, go for P&I on IP’s. This is an efficient way to build equity. But I’m no expert…….

HWD007,
Are you a psychiatrist?[]

My turn on the Soap box ![]

Responsible investing – The ability to do it without adverse affect on you, your family and anybody else.

Successful investing – The ability to increase wealth with the least amount of loss and stress.

Thankyouverymuch [8D]

quote:
In reading this, there was definitely a ring of familiarity, ie the record levels of investment borrowing last month in Australia; ie 50% of all housing finance going to investors?

Is this figure due to an increase in investor borrowing or a decrease in PPOR borrowing? It may just mean the equation is changing. I am always suspicious of…[Read more]

DG and Wally, the tax advantages are not the reason to gear a property. The main reason most people (should) gear into property is to generate wealth from capital gains. The effect on the tax you pay just helps you along the way.
If you negative gear a property you would be betting on a capital gain.
If it’s neutrally geared, you would still be…[Read more]

HousesOnly,
Not all renters are struggling[]. Some people choose to rent and may take offence.

quote:

Every day we here (hear) stories of record lending for investment properties all over the country.
NSW now lends nearly 50% to investor(‘)s for property. Qld lends 38% again to property investors.If ever there’s a time NOT to buy property, it must be now.I see first home buyers
sinking themselves up to their eye balls in debt.
If you know…

[Read more]

Michael, that’s one of the funniest posts i’ve ever read. [] Don’t hold back now…..

Bruce Almighty (sorry, couldn’t resist the analogy []),
Congrats on the successful attainment of your property portfolio and thanks for adding a little spice to the forum. However, your comments still have that Northy overtone (oops now I’m guilty of stereotyping []). Looking forward to some constructive words of wisdom in the future. I live in…[Read more]

mother,

If you use Lomas guidelines then simply multiply
IP debt * 0.175% = rent pw

If you use 11sec rule –
IP debt * 0.2% = rent pw

To work out return –
(rent pw * 52) / IP debt

I believe you should use outstanding debt rather than property value, as that gives a more accurate result. Others may disagree.

I stuffed this up in an earlier post, so here it is corrected… I hope.[]
Since we’re on the subject. One wealth creation lecturer, Brad Sugars, promotes the following method of debt elimination in 7yrs. Some people may be familiar with this so correct me of I’m wr….. wr…. wr….. WRONG![]
1) List all debts including the minimum fortnightly…[Read more]

Out of interest –

Rent/2*1000 = rent/pp*100 = 0.2

eg

300/2*1000=150000
300/150000*100=0.2

Yeah. I’m a little bored.[^]

Using the Lomas formula, i’m getting 0.146 meaning neg cashflow, right? I’m presuming, the higher the outcome, the more positive. Well, if I were in the market at the moment I don’t think many properties would pass the Lomas test….. in the major Cities anyway. So that’s a very handy formula! As for the 11 sec rule, does anybody have any…[Read more]

G’day all.
What a great bunch of people. Property Investors all seem so cool.[8D] My name’s Sean (37), IT specialist. Married to Lisa with two girls Maddison (10) and Mallory (. I guess I’d call myself a “steady as it goes” investor. I’ve done a PPOR reno. Now in second PPOR reno (Glen Alpine, SW Sydney) that we will never sell as we love it. Have…[Read more]

Got to agree with Kate here. The guys that booked you have probably seen more than their fair share of fatalities due to speeding. The fact that they stopped you may mean they have saved someones life. You never know what is around the corner. I got booked once for doing 62 in a 40 school zone…. I thought the zone time ended at 0900 not 0930. I…[Read more]

[!]This post brings back ugly memories of a cold call I received once… I can’t remember the company. But it used similar methods to those mentioned here. My other half got cold called once and a week later we had a very charming fellow in our dining room at 8pm impressing us with the vitues of his finance/investing package. It used a LOC and…[Read more]

Hi Kellie, I’m sure someone more knowledgable may give a better answer but I’ll have a go.[]
LVR is Loan to Value Ratio. IE The amount borrowed in relation to the value of the property, usually the purchase price.
From experience I have noticed if it is a PPOR they will usually lend you an amount in relation to the purchase price; unless the…[Read more]

Polaris, you’ve got to get educated. A friend of mine is wrapping at the moment and he seems to be doing ok. He went to one of Steve’s seminars. Maybe all will be revealed from Steve’s book. Here endeth the lesson.[]

[] You know, if you mix milk with Milo. It makes a really nice drink.[]
What I am trying to say is, it’s all a matter of opinion. This deal looks like it’s returning about 6% which isn’t bad…. Don’t know what vacancy rates are like… maybe you could ring some property managers up there and get their opinion.
Milo is a Rad drink too.[]

Thanks for the response Petters. The idea of the TD is interesting. Also, to reduce the impact of CGT I intend selling after June.
Just to clarify. The IP I intend to sell is secured (cross colateralised) by my PPOR, but there is more than enough equity for them to stand alone. All I really want to do is release all of the value of the IP and use…[Read more]