Hi Draytone,

I’m currently renting out to great long term tenants for $450 a week, with a balance of $315k,

.. which makes you about neutrally geared at the moment (or even positive geared?)

Would you look at cashing out the Sydney property to gather a few 20% deposits for some strong positive cashflow properties here in the USA? The u…

[Read more]

Hi Brunowa,
I bet you are delighted that you asked on forum eh? There are so many of these little traps that “the average Joe” leaves to their professionals. If accountants got it wrong, how would you have known? I’m glad you thought to get a second opinion.

As you said, it didn’t sound right, and could have cost you dearly. But now it…[Read more]

Hi Janelle,
Sounds like your gut is trying to say something !!! Another popular saying is “If in doubt, don’t…”

If you had no doubts, then you would be feeling quite different about things. Since you are not, ask your gut “Why not?” :p It may simply be that you don’t yet know enough to be SURE. It may have nothing to do with…[Read more]

Hi Calderan,
Welcome aboard – and please don’t worry about any “dumb questions” – ‘cos the only dumb ones are the ones you DON’T ask (and we never get to know about them…. :p )

I’d like to share a couple of pointers with you – you sound like you are as keen as mustard, so I’d suggest you take some time to read heaps – good books, this…[Read more]

Hi Ryan,
Welcome to you, new member – you have come to a good place !

When starting out, there is lots to learn, and I would suggest you take some time to devour the articles in the “Training Centre” on the Home page. read some good books, and make friends with some of the professionals on here (Mortgage Brokers, etc) as they can guide…[Read more]

Hi Shaun,
Yep, sounds CF+ to me. Sounds like a commercial premises, and that the builder is renting back the place from you UNTIL he sells the other nine. Then he’ll be gone, and you will need to fnd another tenant (but they have already signed up for the other nine – is there a tenth waiting in the wings)? Being commercial, the rental…[Read more]

Hi Terry,
An interesting first post – I guess you are new here, so welcome aboard !! Your comment below intrigued me, and leads me to ask how you do it?:-

all have been cashflow positive from day one, with gross returns between 10.3% and 7.75%. More importantly the net return is around 7% at purchase date.

That bit about Net Yield at 7% – I…[Read more]

Hi WTR,

Does anyone know if when using an offset account and redrawing on it would affect LMI?

The simple anser is “No, it won’t affect LMI at all”. This actually highlights the major difference between an Offset Account and a Redraw. With a Redraw, you have returned the money to the Bank, and being able to access it again is not as simple…[Read more]

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 $…

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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