[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 6, 2011 - 10:02 am

The first article just sounds like marketing hype for his new business.

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

May 16, 2010 - 1:16 am

ambosh wrote:

No.  Over the long term, the additional cost of fixed rate has proven to be not worth it.

Not always. You just need to do the sums and see what works out best for you in your situation. There are many variables to consider.

Cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

April 8, 2010 - 9:21 am

It's generally better to pay off non-deductible debt  like a PPoR loan,  which stops interest long term – it's a guaranteed return of whatever % interest rate you are paying on the loan. Money in high interest account general has poor after-tax, inflation-adjusted returns.

E.g, mortgage inerest is 7%p.a. versus deposit rate of 5%p.a. (which is about 2-3% in real terms).

So paying off the loan is generally better.

Cheers
Paul.

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

April 8, 2010 - 9:07 am

Qlds007 wrote:

Sure we expect everyone to rise but CBA announced it 4 minutes after the RBA.

So should all the Big 4, I reckon….surely they have people crunching the numbers on various scenarios, so that if the RBA decision was to cut, hold, raise by 0.25%, raise by 0.5% they would be absolutely clear about what this meant for their business. When bank's say 'we are currently reviewing our rates in light of the RBA decision' it sounds like the decision has come out of the blue and blind sided them, which I think, makes them look incompetent. Having said that , I understand that the timing of the bank's media release also considers customer sentiment, competitive edge, yada yada…..

Cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 31, 2010 - 11:56 pm

Dan42 wrote:

PaulTextor wrote:

Talismans wrote:

Can the interest payment be deducted from the capital gain as well if I sell the share less than a year at a profit?

 
No. Interest can only be deducted from your income. Only capital losses can offset capital gains.

Cheers
Paul

This is not correct. Revenue losses can offset capital gains.

Sort of….just to clarify…..

E.g., Let's say you earn $100K p.a. from your job, you pay $15K p.a in interest, and you have a $20K capital gain for that financial year (and for the sake of the example, let's say that you do not qualify for the 50% capital gains discount).

My understanding is that it works like this:
The $20K capital gain is added to your $100K income to calculate your assessable income. Then the $15K is subtracted as a deduction, and you you end up with your taxable income.

To reduce the $20K being added to your assessable income in th first place, you would need to have a capital loss (either in the current financial year or brought forward from previous financial years). Income and capital are two separate things.

Cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 31, 2010 - 10:51 pm

Hi Kerrie C

My advice would be to talk to an appropriately quaified financial planner, with a good reputation. He or she will be able to discuss your financial and other goals and recommend strategies that are suitable for you, in the context of the current economy and 'cycles' for property and shares.

I am guessing that if you are in your late 40's and own your own home outright, that many planners would encourage you to be contributing more to superannuation. Considering super preservation age limits and being late 40's, I would assume you could access your super closer to age 55 than age 60, so you wouldn't necessarily be locking your money away for years and years. They will also probably suggest that you keep some cash aside for a 'rainy day' or unexpected adverse events, like ill health. Different planners would have varying views on what to do with the shed.

Best of luck with whatever way you choose to go.

Cheers
Paul

 

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 31, 2010 - 9:14 pm

ryan mclean wrote:

I check my populations by using wikipedia because it gathers information from the previous census (which was 2006).

Wikipedia…

Probably better to use other sources like ABS. Not sure about NSW but for Qld, also see Office of Economic and Statistical Research.

Also – if you are looking at the drought 'breaking' as part of an investment strategy, it's probably good to keep an eye on the SOI – in Qld, the government uses this, among other things, to estimate how much rainfall to expect looking ahead over a given time period, so they can estimate the amount of drought assistance payments they may have to pay.

Hope this is useful.

Cheers
Paul
 

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 20, 2010 - 7:48 pm

You might be able to find someone on here who is able to access RP Data who could get you the info for free or offer to on-sell it to you for a fee less than joining RP data yourself. Just a thought.

Cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 20, 2010 - 7:45 pm

Veronique wrote:

I approached my bank with whom my mortgage is with to do exactly this. My mortgage was paid-up so the balance was $0.00. My banker took the $400 000 mortgage and split it in two (at no cost to me) as follows:
$100 000 for share investing
$300 000 for any other investing I may require
This makes it a lot easier when doing your tax at the end of the year as you can claim all interest incurred costs but need to prove it is interest from the shares and not other arb purchase like a vehicle for example. So all interest incurred on the $100 000 loan gets claimed against my share investing tax.
The interest rate for the $100 000 share investing was not increased by the bank and I pay the same as if it was for the house mortgage.

Richard or Terry might be able to comment on the pros and cons of split loans, as opposed to separate LOCs better than me. What was your  goal/investment strategy when asking about the loan?

Cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 20, 2010 - 9:49 am

For serious investors, I don't think fixtures, taps, etc add much value to the property, but help to be able to increase rent…?
Always good to be able to find cheap reno materials tho – very useful site. Thanx 

Cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 19, 2010 - 11:48 pm

Would be good to thoroughly research the B&B market – demand, pricing, demographcs of customers, etc….Bris southside isn't the first place that comes to mind when I think of B&B's. But difficult to know without more info on the place….just some food for thought.

Cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 16, 2010 - 11:15 am

number 8 wrote:

Further, you should never pay this debt down.

Hmmm….I wouldn't go so far as to say 'never' as it depends on individual circumstances. But generally, loan with offset account is a sound structure that allows you flexibility and doesn't cause any probs in relation deductibility.

Cheers
Paul.
 

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 16, 2010 - 6:05 am

We fixed for 6.49% for 3 yrs in Aug 2009 but not sure any lenders would be offering that rate now. Some of the mortgage brokers on the forum would be better informed than me tho.

Cheers
Paul.

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 15, 2010 - 8:01 pm

Boogz wrote:

& if your insurance doesn't extend far enough, I can potentially take both your IP AND your Family home.

Most insurance policies provide more than adequate cover for these types of accidents.

cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 14, 2010 - 8:37 am

Yes, the definition of 'a good deal' is very subjective. Look at all the examples in glossy mags like Australian Property Investor and the like. Always showing articles on 'successful' people by reporting purchase and current valuation as a way to demonstrate 'success' or 'a good deal'. E.g. 'I bought a place for $250K and now it's valued at $380K' – but they rarely if ever report what it cost as an entire project and what the net profit was after ALL expenses and repaying outstanding loans, and after tax. So, I think you just have to have your own investment plan and do your own numbers to see what is a 'good deal' for you. 

Cheers
Paul 

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 13, 2010 - 12:14 am

Excel is free too, if you know the right people

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 13, 2010 - 12:12 am

All the info you need to make investment decisions is free….just do your research and put the info into your own Excel spreadsheet…

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 11, 2010 - 11:14 am

ryan mcleanWhat do you get my CG's on? 10x$100,000 properties earning 4% capital wrote:

4% p.a. capital gain is extremely ambitious in towns where you can buy for $100K.
It's much better for your long term wealth if you buy the best quality asset you can afford.

Cheers
Paul

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 5, 2010 - 9:21 am

In my experience with private investors, you would need to offer around $350-400K (or approx 20%) if you were going to ask for $1.8M. We've been trying to get PI funds for a project (not property – something entirely different) for about 5 years now and the closest we have come, despite everyone saying, "yeah, this is a great concept and we're really interested" is someone saying, "you raise $1M from other people and I'll give you the $10M you're after". These guys don't part with their money easily in my experience.

[GrantH_1974Member@granth_1974Join Date: 2004Post Count: 190]

March 3, 2010 - 7:11 pm

You can probably find a property (or share for that matter) that is affordable no matter what your level of income. But you also need to make sure you are buying a quality asset to give you the best chance of getting long term returns. Just holding assets doesn't necessarily mean you are increasing your wealth.

Cheers
Paul