Thanks Richard – please do if you can,

Benny

Hi WTR,
Well done – you are obviously giving this a lot of thought and effort. I recall doing similar figures when starting out – it all helped me to go into my first deal with confidence.

I am not sure if your $60k to $75k is correct (these numbers are different in this day and age from when I started – e.g. WAY lower Interest Rates today)…[Read more]

Hi WillK,
And a big welcome to you too – I hope you find good information on here to help you on your journey.

You have indeed set yourself on a wealth path, and the inheritance can only help….. What you should do may well be quite different for different people, depending on each one’s goals. e.g. Paying off a rental IP would be a…[Read more]

Hi Newbie,
Welcome to pi.com – we hope you are able to utilise the knowledge found in here to your advantage. And in sharing, you’ll be giving back to others who follow. You sound like you have some pretty good options to choose from, and have certainly been doing some very useful thinking there. Seems you have already covered a lot of…[Read more]

Hi P@ck,

after computation, i’ve found out that my borrowable or useable equity is 92K.

Current valuation is $502,500 then? 80% of that is $402k, and you owe $310k – difference = $92k. How’d I go? ;)

based from my readings, simple rule of thumb is to multiply the useable equity by 4. Which means my max purchase price for IP must be within $…

[Read more]

Hi P@cketeer,

I’m referring to property equity. what is borrowable equity?

Let’s say your property is worth $950k and you have $190k equity. That says you have an 80% loan. You may borrow more, but that would depend on serviceabilty (your income – is it enough?) and whether you are wanting to borrow at 90% (which would release $95k for you t…[Read more]

Hi Woohah,

So the question is, Is equity worth it if the immediate on-selling prospects aren’t too great?

Were you planning to on-sell it soon – e.g. a flip? Or does it have a role to play for you as a renter first? Does it have reno capability, or subdivision? Do you have the funds to accomplish those, and does this fit with your g…[Read more]

Hi Derric,
And a big welcome to you !! You’ve come to a good place. Good on you for taking a look at IPs – there is lots to learn, so don’t be in too much of a rush to go out and buy – just yet.

Of course, you may have already done some research, thought about things, and are now READY to buy. But if not, do school up (on here, in books,…[Read more]

I’ve been very happy with Kirstie at Qld Law Group in Springwood – they have offices in the city too, if you are nearer the CBD.

Benny

Hi Pati,

So, are you guys saying this is not a good enough investment?

I’m saying the example is looking OK – but is there an actual property on offer that meets those numbers? I reckon it would be hard to find one in this day and age.

The figures look quite OK, and yes, positive geared by a little bit – but when an ACTUAL property comes…[Read more]

Hi eyelove,

If we were able to access some of the equity to buy the PPOR it would make things so much easier as we had earmarked the cash on hand for other purposes.

As long as you don’t “contaminate” any current loans on the IP that are deductible, then go for it. Go for a totally new loan against the IP – the new loan will be non-deductible,…[Read more]

+1 to ltroeth

Benny

Hi Adrian,
I’m not an accountant, so do check my thoughts with the right person – but here is what I believe to be true.

Purchase Costs are allowed to be claimed over a 5 year period – so, not as a lump sum. If you were to sell again in the future, any unclaimed amounts remaining can be cleared at that time. I think Building and Pest would…[Read more]

Hi Claudio,
Good on you for asking the questions first – smart move !! You have already received some invaluable knowledge from several qualified members, each offering good reason to question this loan and where it may lead.

This is a very important decision for me and my family and I am a bit scared to take the wrong choice, I hope someone…

[Read more]

Hi Claudio,
And a big welcome to you – I see this is your first post.

On an loan of 450000$ means an interest of 60000$ in 30 years, 2000$ at year, and this is the reason why we have decided to go with them.

Just so you don’t get too confused later on, I wanted to point out that you are missing a zero on both of those amounts.
One year’s…[Read more]

Hi Wiwin,

Exit strategy for every purchased ip is kind of hard.

I think the real reason for the seminar to mention this is because we don’t automatically think of this when buying things – at least, not to any depth. e.g. when you buy a new handbag, do you naturally think “This will do me for just one year, then I will pass it on to St…[Read more]

Hi Pati,

This is just a scenario, they gave me. They will probably recommend 3 bed 2 bathroom house and land from Brisbane.

Ah, no wonder everything seems “above board”. It is designed to show the benefits of negative gearing. Actually FINDING a house that would meet those numbers would be the hard part. e.g. in Kingston (Logan City) new 2bdr…[Read more]

Hi Pati,
Welcome aboard, and a great suite of questions. I’ll have a go, then see what others can add (or to pick me up if I get it wrong… eeek! :p )

1) How can this scenario be positively geared.

Except for the Tax deductions, you would be losing ~$85/week in the first year, then $65 in year 2. They assume a rental increase of ~$25/week…[Read more]

Hi Cooper,
Simply scroll right down to the very bottom of this page and you should see this line :-

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Click on the links to read them,

Benny

Hi Knox,

Am I right in saying that using this method I’m basically freeing up more cash to purchase more IP’s?

Correct – the bank only asks that you pay Interest – nothing needs to be paid off the Principal – so you “pocket” the extra, putting it to work in your Offset account (which helps to REDUCE the Interest owing each month).

And you…[Read more]