Hi Bennido,
Not many numbers posted, but I thought it’s worth looking at what can be done. For example:-
Bennido says “I did some quick calcs and I would need to pump about $100K into the investment loan before the apmt becomes +ve geared !”
From that, I assume you are negative around $7k per year (or $140 per week – close enough?) I figure, rather than injecting $100k, look at reducing the holding costs. See if you can do some, or all, of these:-
1) Add some value, and raise the rent
2) If P&I, refinance to IO loans
3) Maximise Tax deductability (if on highest Marginal rate, loss reduces to $3.5k or $70 per week immediately)
4) Buy one or two positive geared IP’s to offset the loss per week on this one.When it’s boiled down, it sounds like you’re only $70 per week in the hole after Tax deductions. Chew away at this figure, rather than “injecting $100k cash”. Far quicker, and you can hold for the long term growth
Benny
Bennido,
The vendor finance association is a good source of links to knowledgeable solicitors for lease options.
http://www.financewraps.asn.au
The Association also does great work with various government organs to ensure that the principles of lease-options & wraps are understood by the lew makers.
As investors we need to support these type of industry groups or see our options rapidly diminish (and no I’m not a member myself, but I have friends who are).
Cheers,
Aceyducey
In theory, there is no difference between theory and practice. But, in practice, there is.– Jan L.A. van de Snepscheut
Hi Bennido….
Gee, you’ve really got the energy around here pumping with your post!
We also bought our first IP (in Kirribilli) -vely geared. We got in and renovated, and used the added value to refinance and renovate our PPOR.
These days, 4-5 years later, the IP is still slightly -vely geared, on an interest-only loan.
Right now, my husband is out selling it because I believe that although it’s still a good IP – it doesn’t fit into our investment plan anymore.
So… what I’m trying to give you an example of is, it’s possible to change investment plan from -vely geared to +vely geared. Use your property to it’s best possbile advantage for now and then as you move into your ‘prefered way’ of investing, if you can’t make this one fit (by wrapping or renovating or whatever) then sell it.
Regards and best wishes.[biggrin]
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