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

March 3, 2010 - 6:57 pm

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

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

March 2, 2010 - 9:27 am

Anyone heard how much Suncorp will raise?

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

February 20, 2010 - 5:28 am

WGordon wrote:

The only way you are going to make money thru negative gearing is by relying on capital gains that may or may not occur in the future. 

This seems to be the assumption inherent in the 'positive CF' strategy too. Cash flow is definitely important but capital position (i.e, your wealth) is the bottom line for me.

Paul

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

February 14, 2010 - 9:00 am

I'm with DWolfe….advertise somewhere else!

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

January 29, 2010 - 11:43 am

How old are you..? Please don't say you are 'Gen Y'

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

December 10, 2009 - 9:38 am

I can confirm what Forest Lake PM said about the construction. The people who did the landscaping contract are family friends of ours. The termites in Forest Lake are there to stay (cos they were there first!)

It sounds very expensive for Forest Lake. There's heaps of property in and around that area and also new developments like Springfield and Springfield Lakes nearby. The house there are really crammed in so there's heaps of stock there. And all that separates Forest Lake from Inala is a fence at the back of the Forst Lake Estate.

The plus points are that all the prisons, and large psychatric hopsital are nearby and a ot of people who work there also live and rent in Forest Lake, So if you find a cheaper place, I would assume you would have very low vacancy rates.

Best of luck with whichever way you decide to go.

Cheers
P  

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

December 7, 2009 - 10:57 am

In my opinion, it is too late to go fixed now, especially if you are comfortable with higher repayments. If I were in your position, I would just stay with variable. 

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

December 7, 2009 - 10:45 am

What happens in regard to fees on the loan in the event that you buy the propoerty for $400K and then sell it in say, 3-6 months? Do you have to pay extra fees for paying out the loan in the first 4 years?

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

November 21, 2009 - 9:38 am

There's lots of cheap property in rural Qld….it's cos SFA of the popuation live there. It's probably more important to add at least one more variable to the list so that you get a list of "affordable properties you will actually be able to re-sell".

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

October 16, 2009 - 9:28 am

Having formally studied financial planning, I would have to say the wealth score doesn't really add any value to my wealth creation and retirement planning strategies. But then neither do any of the risk profiles that most planners use. Good to hear other people find it useful.

Cheers,
Paul

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

October 12, 2009 - 9:44 am

Glennsa wrote:

The General wrote:

I'm sorry. I read the whole post including Terrys links. What am I missing. How can the loan repayments drop from $400p/wk to $52p/wk when the same loan amount still exists and the interest rate is roughly the same? And how can one pay off $140k with a $650p/wk rental and a $100k line of credit? (One must remember that I am sure that there are other expenses that need to be covered (whether personal or investment)

Hi Nathan,

The important part to note is in one of the dot points from my first post:

* $500k PPOR with $140k owing with $400per week minimum payment (we're paying considerably more currently)

So before we get this IP squared away we are already making a lot higher repayments than the minimum $400 a week.

That $400 a week is based on a loan that started at $230k principle and interest.  Regardless of how much we pay off the loan unless there is a dramatic shift in interest rates or we refinance at a lower $ amount, the repayments will still be around $400 a week.

If I capitalise the interest of the IP into the LOC (and other expenses) for the first 12 months the LOC will grow to around $45k.  By capitalising the interest I put 100% of the rent onto my PPOR mortgage  which with our extra repayments already should bring out PPOR mortgage to a payout date of this time(ish) next year) instead of late 2011 to mid 2012.

The PPOR loan is principle and interest based on $230k @ $400 a week (minimum)
The LOC is an interest only loan and at $45k will mean repayments of $50 a week

With the LOC while being 100K another important thing to remember is we only pay the interest on what the current balance of the LOC is.

To possibly pre-empt another question, how do we pay out the LOC?

We probably don't, there are a couple of strategies that could be employed but the one will most likely consider is once there is enough capital growth in the apartment we will restructure that loan to absorb the LOC. 

This current methodology is with the sole goal of paying out our PPOR in as short a time as possible.  Future IP purchases will mostly be done using a LOC to supply the deposit and expenses to allow us to finance the IP without cross collateralising.

I hope that explained it p.s. seeing the conveyancers on Wednesday with 10% deposit in hand to exchange contracts, things are really starting to move now.Glennsa

when you say….
If I capitalise the interest of the IP into the LOC (and other expenses) for the first 12 months the LOC will grow to around $45k.  By capitalising the interest I put 100% of the rent onto my PPOR mortgage  which with our extra repayments already should bring out PPOR mortgage to a payout date of this time(ish) next year)…

Do you mean that you will be paying aprox. $100K in extra repayments in the next 12 months, i.e., around $2K per week?
And is there an existing lease paying $650 per week, or is this just what you hope to get based on research etc?
sorry, i'm just trying to get my head around the numbers.

Cheers
Paul

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

October 11, 2009 - 10:13 am

The General wrote:

I'm sorry. I read the whole post including Terrys links. What am I missing. How can the loan repayments drop from $400p/wk to $52p/wk when the same loan amount still exists and the interest rate is roughly the same? And how can one pay off $140k with a $650p/wk rental and a $100k line of credit? (One must remember that I am sure that there are other expenses that need to be covered (whether personal or investment)

Regards

Nathan

I had the same question. The numbers don't look right.
On the tax issue, I guess it doesn't hurt to ask for a private ruling, but if you were a betting person, you would imagine the answer would be 'no way'. Best of luck though. Let us know how you get on if you decide to get a private ruling.

Cheers
Paul 

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

September 24, 2009 - 12:47 pm

Hi Richard,

Any chance of getting  report for 36 Fleetwood St, Macgregor, QLD 4109. Only if you have time mate.
My email is [email protected]

Cheers
Paul

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

September 19, 2009 - 2:56 am

morgan1 wrote:

Maybe someone with a better Maths brain than me can explain how and why it works that way?

 
Centrelink make up there own rules, which can be different to ATO or other rules. Usually Centrelink rules, like 'deeming' for example are based what income your asssets could provide you, if you had that amount of cash invested differently.

For example, f you own a $1M property, Centrelink take the view that you could sell it and use that cash to produce an income, rather than using tax payer's money. 

So it's not as unfair or silly as it seems at first glance (but it still feels like it sucks when you're on the wrong side of it).

Best wishes
Paul 

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

September 9, 2009 - 7:36 pm

thanks Richard, I appreciate it.
 
Cheers
Paul

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

September 9, 2009 - 1:08 pm

Hi Richard,

Any chance of getting  report for 28 Solway Drive, Sunshine Beach, QLD 4567.
My email is [email protected]

Cheers
Paul

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

September 4, 2009 - 2:05 pm

when we replaced our dishwasher, the service  guy (who wasn't affiliated with nay company in particular), said any decent brand if good, just not Fisher & Paykal – he said this brands keep him in business, when it comes to repairing white goods. 

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

September 3, 2009 - 8:04 pm

Go to the private equity market and ask them to invest in your company, which is based on 'network marketing' and the response will be in the ilk of Monty Burns – 'release the hounds!' To them the terms 'network marketing', MLM', 'pyramid schemes' are synonyms. and rightly so.  

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

November 17, 2007 - 10:07 pm

Hi Andy,

Congratulations on saving $100K – it's a great achievement  & you have obviously worked very hard for it.

You've asked for advice specifically on property so please forgive me from coming at your question from a different angle. I don't know all your goals & your attitude to risk (i.e., conservative vs aggressive), however my advice would be to talk with an experienced financial planner & get some ideas on property investing & on other asset classes as well. This would help you to understand the benefits & risks of each asset class before you invest, so you could see which suits your goals best.

For example, even just considering two major asset classes (property & shares), generally speaking:
 – direct (residential) property has less volatility than shares,
– there is a sense of comfort that comes with bricks & mortar & being able to see & touch your investment 
– property can produce a stable rental income
– negative gearing on property can be used to improve your tax liabilities
– property has high entry & exit costs
– property has maintenance costs
– property is illiquid – not uncommon for average settlement to be 30 days.
– whereas shares have low entry & exit costs, no maintenance costs, very liquid (get your money in 3 days), negative gearing strategies can minimise tax, plus only shares have the advantage of imputation credits, which effectively will mean that you need a lower rate of return to break even on your investment. However, shares are generally more volatile than direct (residential) property.

Of course, if you are comfortable with only investing in property then this is an important part fo the equation as well (it's just that it may limit your options for wealth creation & tax minimisation). But a financial planner would be able to suggest a balance of asset classes that would best meet your goals. There are also cost free options to get this knowledge like this forum or for shares there are free classes on the ASX website.

Also, re: negative gearing – you mentioned spending mid-$200K. If you looked at an example where you had a $200K investment, where you borrow the whole $200K as an example & were paying the same interest rate on each loan, it might look something like this:

Property:
Cost: $200K
Loan: $200K
Int rate: 9.5% (use whatever rate you like)
Income: $13,000p.a. (rent)
Other expenses: $3K

Shares:
Cost: $200K
Loan: $200K
Int rate: 9.5% (use whatever rate you lke)
Income: $10,000p.a. (fully franked)
Other expenses: $0

On property, you would need 2.3%p.a. to break even; with the shares you would only need 1.2%p.a. So you get less income from the shares but this is outweighed by fully franked dividends & the attached imputation credits.

I can give you more detailed workings on the above example if it doesn't make sense. But I guess my point is just about understanding your goals, your attitude to risk, and the benefits & risks of each asset class & how each asset class can help you achieve your goals.

Best of luck with whicever way you decide to go & congratulations again building up your $100K.    

Kind regards,
Paul.

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

August 12, 2007 - 8:01 am

Hi All,

I read this topic with interest. Just yesterday, another financial planning mate & I were having this debate with a real estate agent mate of ours. He was making all the same broad statements as Steve – "the property market is heating up", "prices are heading higher" and "buyers are starting to become a little irrational". (But then again, when was the last time you heard a property spruiker say it wasn't a good time to buy property??

Anyway, we showed our mate the Reserve Bank and ABS websites….wouldn't you know it, there is actual data there that you can use to make sensible conslusions about what's gone on (& what might be going on in the future) in a range of markets – property, shares, and so on.  

I think we agreed to disagree in the end. I'm sure our mate will still be telling prospective buyers on Monday to "act now" so as not to miss out on "rare properties, the last of their kind at these prices", yada yada…….…….