Thanks guys, this is the type of discussion I was hoping for. I think that I will give it a crack. Capital gain is too good to turn down. Also – for the size of the outlay, the inclusions are rather minute in comparison

If you assume the loan is $50,000 – and interest rate 6.4%

Then he will save $3200 in a savings account, then get charged tax, then have to pay $3200 to the Interest only account – Ie – he will loose whatever money he pay’s in tax ( by his top marginal tax rate amount ) on the savings account profit.

If he puts it in an offset account, then he…[Read more]

Terryw wrote:
Would you rather earn $100 in interest or save $100 in interests on the home loan?Both would result in the same savings – assuming the same entity is involved.The $100 interest would be taxable. The $100 in interest saved would mean  you have $100 less in deductions which means your taxable income will increase by $100.

This is…[Read more]

You should always keep your money in which ever offset account has the higher interest rate charged against it, and if you hold a mortgage in the place you live, it’s better to put the offset against that house if you are living in it, as you can claim more interest charged against tax for the IP.

If you did it the other way around ( money in…[Read more]

It is pretty straight forward.

If you put the 50 Grand in an offset account, you will earn more money, than if you leave it in the savings account, as you will save 100% of the interest in the offset account, and only save the post tax ammount of interest from a savings account AND the interest rate in the savings account is worse than the…[Read more]

I already have a duplex that is in a low capital growth area, easy to rent + a townhouse and a Unit in high growth area’s, both of which are + cash flow ….. was thinking that holiday rental would be a way to justify building in a more expensive suburb on the ocean vacant block, with high capital growth? + rent while it’s held or b4 it’s moved into?

Best place to start it – decide how much you can afford, then you will have a “cap” on prices which will discount some areas & make the decision easy….

Just don’t buy in Perth as it’s bonkers …. is my advice

Cheers…. was considering that too, but even with twice the rent…… you could basically have a 50% vacancy rate, and if not….. you’d be rolling in it?

Agree with Terryw, the first 6 years of absence, it is still your PPOR, as long as you have no other PPOR claimed. Get a house valuation done at the 6 year mark, and you will only pay CGT on the difference between this and the sale price…. So really there is no benefit in selling before the 6 year mark as you get the same benifit but make more…[Read more]

Thanks for the comments

I see, i’m not sure on that one…..

Good to get some ideas out there,

sbhjain wrote:
Hello DaIm in Perth myself (cannington) and in the process of buying my first IP around 500K mark. I personally believe prices in Perth are 10-15% higher than what they should be. But in saying that, i dont think the prices are coming down, houses take a little bit longer to sell .…[Read more]

Thank you for your view – that makes sense of the differing auction clearance results in Perth.
but, I still have some concerns maybe you can also voice your opinion on

The issue of affordability – the average wage x 6 = the median house price

Having a look at these couple of graphs…[Read more]

I would say the duplex would be around $400 – $450,000, but it really depends on how big it is, and the inclusions aswell, rather than how many rooms etc.

I’ve just done a 3 bed, 2 bath, double gge, alfresco back area with double sliding doors and that was around 450K

You need to pick a builder and get some quotes really before you can do the…[Read more]

Thanks, by the look of it, I would be building a 1B type building, which looks very similar so far to the normal residential rules ( under 12 ppl )
Is there anywhere you can view the building Code of Australia online ?