[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

May 27, 2010 - 4:00 pm

i did not say it has to be ‘close’ to the city. i said the closer the better. and which suburb is the closest to city with a house price range 500K-600K.

just on top of my head. i was thinking like clayton, oakleigh, glen waverley, blackburn, and wonder if anything is closer and yet still within my range.

i know cranbourne frankston and the kind is 300k ish but i’m looking 500K – 600K. so it should be closer to city than those suburbs.

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

May 26, 2010 - 6:01 pm

i’m looking to live in myself. and i’m pretty sure houses still go for that range. might be not pretty and very good inner suburbs. but houses in east/ south east/ bayside zone 2 area still under 500K, definitely!

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

October 20, 2009 - 6:24 am

i dont think you can do that. you can refinance your IP loan and get tax deduction benefit if the purpose of refinance is for another investment/ business, not for lifestyle or your home.

i think there should be a get around this issue but just cant think one at the moment…

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

October 20, 2009 - 6:18 am

1. pay off your credit card debt or which ever posing a higher interest.
2. pay attention on interest rate rise. hinted would go to 4.25% by the end of next year. so that is 20% increase of repayment from 5 to 6% home loan. rent wouldnt be able to cover that.
3. LMI is expensive. instead of going 95%, better go 80 – 85%.
4. you should have a buffer in case your IPs unoccupied for a longer period than expected. *knock knock wood* or you lose your job and couldnt find another one asap or forced to take a job with lesser pay.
5. buying 300K or 400K is no different. calculate in percentage. in fact smaller would be favorable on the stamp duty, but yeah more works on maintaining.
6. saving 20K for 400K property is merely just paying the stamp duty. i remember i was paying $17K+ on 380K property. so i guess u need more that now you used up ur FHOG
7. take it easy. property is long term investment. dont get all the juices out just yet.

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

October 20, 2009 - 5:58 am

IO is simpler than I&P.

how it works?

you would still have the choice of variable and fixed. and then you have the option to pay in advance or in arrears. last the option to pay weekly/ monthly/ yearly.

the rate slightly different, in advance would basically lower than in arrears. each and everyone has its own advantage and disadvantages for every investors with different financial situations.

one example of paying IO in advance for a year is the tax deduction benefit. you can pay 1 year of period 1 june 09 – 30 may 10 on the 1 june 09 and claim the tax return on the period of 2008/2009. in circumstances where in 2008/2009 you may generate higher income than the following year. and vice versa.

say you borrow $120K from bank with interest of 6%. calculating how much the repayment for I$P is hard. i would need to use the online calculator from one of the bank website.

on IO is basically:
yearly = 6% x 120K = $7200
monthly = $7200 / 12 = $600

2ndly, on I&P every month on repayment you would have to pay Interest + Principal. on the same numbers above. IO per month is 600. IP per month could be 700. as for me (investor) I would like to pay as little as possible and that extra 100 would be better of invested elsewhere.

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

October 20, 2009 - 5:40 am

buy the dream home instead of 2 investment properties

i was thinking like this. that dream home today is $800K and you can afford it. In the next decade or less it could easily doubled and be $1.6M. would u be really sure you can afford it by then? even if you could its still then not worth it. the 10 years lifestyle sacrifice is not worth the cost of wealthy creation from buying the 2 IPs.

maybe if you could afford 5 IPs instead of 1 home then it might worth it. if you could borrow $800K for your home then you should be able to borrow much more on IPs because on IPs you can claim the rent incomes.

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

July 24, 2009 - 11:38 am

What you guys said above are right.

I guess I owe you guys the rest of the story:

Back to the very fist offer I accepted, that was 340K. Then the higher next day offer was 350K. I calculated 15K difference because the 1st offer is from REA and the 2nd one is from my friend. Hence I saved at least 5K commission there if I sell to my friend. This was a deal draw start from the beginning with the REA. If I managed to sell it myself then I do not have to pay any commission to them.

I talk to a lawyer, my solicitor. He said I can cancel the contract but then the purchaser might sue me and I will lost the case if he did. Then I talked to my REA, he said the purchaser most likely will not sue me. If the contract got canceled he would then buy the apartment above mine. It is exactly the same, selling 5K less just the rent is lower than mine – old tenants with old rate I presume.

The REA (Of Course) advise me not to cancel the contract because he said the offer was above the market price.

My friend was also lacking of down payment. He is first home buyer – pursuing 95% LVR or even higher with LMI included on the loan. His bank valuer quickly evaluate the property and surprise2 the valuation come back 328K!

Oh ya the 1st purchaser is paying cash…

So thank God everything went well. The settlement was done yesterday. Cash no drama. 14 days settlement. now waiting my cheque to clear.

Thanks everyone for inputs.

Have a good weekend

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

July 12, 2009 - 12:35 pm

To be exact. I received the contract signed by purchaser via email from the real estate agent. Then I print it out then signed it and scan it and send it back to the real estate agent. After that I am not sure where it is now. But I am assuming then my email is forwarded to the purchaser's email.

So there is nothing I can do? like cooling off period or such?

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

February 25, 2009 - 12:43 pm

god_of_money wrote:

blaze… you must be brain-washed by the property spruiker which claimed property will double it price every 7-10 years.
I don't think it will be going up by 5-10% in the next few years.. in fact the opposite or stagnant.

In this current climate, people are looking for every single $ to save

it was doubled in the previous years, werent they? Say a $400K property today was $200K on 1999 and $100K on 1989? I believe there are a lot of properties to be found on that path. Maybe not 5 – 10% to 2010. but $800K on 2019 is possible. but this would be in another whole discussion.

Back to the topic, if you really hate LMI then you have to snatch at the valuation like someone's above experience, buy a $340K property on a $385K valuation.

And if you really think property would be stagnant or decline in value, even with no LMI you should not buy the property.

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

February 25, 2009 - 10:52 am

Terryw wrote:

wealthyjvd wrote:

whats the difference if you have IO and put money into the loan or have IO and save in offset?

Big tax consequences if it is an investment.

Money paid into a loan = repayment.

Withdrawing = new borrowings.

If you put extra money into the loan and then wanted to withdraw $1000 for a holiday, then the interest on this portion would not be deductible. Imagine if you did this frequently, you would have a huge loan but maybe unable to claim the interest on most of it. Plus it would be a nightmare to work out.

I dont quite understand here. So in a 100% offset account you may withdraw the money for a holiday and the extra interest you pay will be tax deductible but you cant claim those that on a normal basic loan with redraw facility?

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

February 25, 2009 - 10:16 am

Few lenders can waive LMI if you borrow just 85%. Last time I shopped ING and Wespac can do that.

For me LMI is a smaller lost. Growth should be larger than the LMI.

Say for a $400K property. 95% LVR would attract $7K LMI.

But if you waited next year to save more money for the deposit the property would have up by 5 – 10%. that $400K property would then become $420 – 440K.

So would you save $7K just to lost the opportunity of getting the $20 – 40K?

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

February 18, 2009 - 7:00 am

Thanks digger. I am in Melbourne, Victoria. Yeah what is done is done. Just wondering if others actually charge less. If it does then I shall shop around next time otherwise I will use them again.

Anyone know what is ANSTAT TI is? That seems to be the major disbursement spent on.

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

February 18, 2009 - 4:54 am

Qlds007 wrote:

With a little loan planning you could have made the PPOR Interest only with an Offset account from day 1 and still have the same interest saving and then when you move out the entire amount of interest on the loan would be tax deductible.
Even your PPOR should be IO IMHO.

Ideally that is what I want to do. But I found that offset account is actually costing me more (either higher interest rate or monthly/ annual fee) than just basic loan. Hence I would have thought that one of your property (preferable your PPOR) should be made PI instead of IO. The downturn I found with basic IO (no offset account) is that you can only make 10K extra repayment a year.

What do you think? Or am I missing something here?

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

November 20, 2008 - 5:38 am

i think he said he owns 150K on 185K IP.

so how much money will he get roughly:

profit = sell price – purchase price – cost (stamp duty, agent commision, etc) = 280K – 195K – 10K = 85K

pay 30% tax from 85K, you left with 59.5K + 150K you own on the IP.

so total you would get 209.5K

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

September 3, 2008 - 8:31 am

Say the total rent is 1200. I would put the couple on 700 and the single on 500. Bills (eclectic, phone, gas, water, internet, etc) split 3 ways.

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

August 21, 2008 - 4:46 am

soloinvestor wrote:

Can I still claim depreciation on the property while it's being rented out, assuming that I'm going to move back in within 6 years to avoid CGT liability?

Yes, you can.

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

August 8, 2008 - 8:08 am

1.3 M borrowing power… + 300 – 400K annual income :droll: :droll: :droll:

get that 850k apartment then slowly try to purchase those 300K suburban houses. u can afford both

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

August 5, 2008 - 4:59 am

L.A Aussie wrote:

crashy wrote:

I agree that there are those who walk the walk and those who only talk the talk. you have to admire those who have built a large portfolio and dont mind sharing how they did it.

making money is easy. keeping it is the hard part.

I talked to a guy who had $3m worth of property leading into the early 90's recession. he explained how things slowly got worse for him, cashflow drying up day by day even though he sold property (in a falling market) quickly, finally ending up $500k in debt with no properties left.

I wonder how many people here realise just how easy it can happen? There is only one number that matters……..how long can I survive when (not IF) everything goes wrong?

Why was his cashflow drying up?

Were the properties he owned tenanted?

Maybe like say he owned a building in normal market worth $15m, put $3m as deposit and $12m is loan. On falling market he forced to sell the property for $11.5m. That would leave him with (500K)?

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

August 5, 2008 - 4:17 am

A

[blazeParticipant@blazeJoin Date: 2007Post Count: 60]

May 12, 2008 - 4:20 am

Utilities you mean via a quantity surveyor?

10%? blah… ok so how if I drop this completely, not claiming any deduction nor any rent income, hence still can get full CGT exemption? Is this ok?