There is no harm in selling a property if you think that there is no scope for getting your money back on a negatively geared property through equity or rent. You don't want to keep on losing money year after year.

In the end you need to decide if by selling will make your next move more fruitful.

Cheers

Tom

Boshie, your Westpac advisor has given you the wrong advice (not surprisingly).

First off refinancing your loans and credit card into the one loan means you will will a mixed purpose loan. You will need to segregate your loans into deductible (PPOR loan which will become an investment) and non deductible (credit card, etc). The deductible loan…[Read more]

Hi Boshie, the reason people purchase property that is initially negatively geared is if there is potential for capital gain where in time the gain will outweigh the initial income losses.

Yes, you are correct in that a negatively geared property can offset against high incomes come tax time, however in your case since you already own the…[Read more]

It's not like they are trying anything that hasn't been tried before. All they are doing is charging upfront costs, which depending on the size of the loan may or may not land you a profit after the upfront rebate, and they still get to keep the trail commission, so I doubt they are going poor.

Going through their website, it seems they are hung…[Read more]

I thought that it was the case too Steve. You need to declare any foreign income such as overseas IP rent on your tax return, so any expenses used on the property should be able to be deducted from this.

Cheers

Tom

Yes, it can be done via a self managed super fund (SMSF).

Simplifying it, the SMSF contributes the funds for deposit and buying costs, the remainder is a loan against the investment property. Loan is repaid via rent from the property, super contributions, investment income.

Both the SMSF and the trust holding the investment need to be setup…[Read more]

Hi RM,

You can confirm with your tax accountant, but from my understanding you would be able to claim pro rata from the point it becomes an IP.

i.e LMI is $5K total, PPOR becomes an IP at the end of year 3, you should be able to claim $1K in both year 4 and year 5.

Cheers

Tom

And you're half way to the 50% CGT discount as well

Just on the finance side of things, you need to be aware a lot of lenders won't unconditionally approve a loan this far out as their maximum period is 90 days.

Cheers

Tom

Not really beneficial in having a split with P & I. You're paying off principal that isn't deductible which can instead be used later on your new PPOR.

Cheers

Tom

If you are intending to change Hughesdale into an IP down the track, stick with IO on the loan for the whole amount, and place any excess cash you save into a linked offset account. That way you're paying the same amount of interest but when you end up purchasing a PPOR, you can use the offset funds on the new PPOR, and maximise your…[Read more]

Agree with Catalyst's comments above. You need to make sure the loans are structured correctly at the start to save heartache later on down the track.

I would ask if you intend to live in the old house permanently or is there an intention of making it into an IP down the track? If there is a chance of turning it into an IP, you should leave the…[Read more]

Agree. Obviously no other interested parties meaning you are in control of the negotiations. Start low and see where that takes you.

Cheers

Tom

I take it you're talking about IP related stuff.

If you are using a property manager, they should give you a yearly statement of your rent and management expenses which you can use. Also if you are claiming car expenses for visiting the property, I keep a list of dates that I visit and the purposes of the visit, so it makes it easy to work out…[Read more]

Pardon my ignorance as I have never come across a sale that is lower than an outstanding loan before, but how is there still a loan to claim interest on after a sale of the security?

If there was still money outstanding, wouldn't it be a default and the LMI pay out the lender, and then the LMI would chase the vendor?

Cheers

Tom

I suppose as with any tax ruling, it is ambiguous. I bet there are a few investors out there who are waiting for someone to test it out in the courts.

Cheers

Tom

Jamie, I consider myself as a pretty easy forgiving bloke, nothing really ruffles me, but I'm with you on this one. The thing I detest most is clients who you form a trust with and then blindside you and go direct themselves.

I do have a broker friend who when he gets a client who comes back with their tail between their legs, gives the client…[Read more]

JacM is correct, you don't want to utilise all you funds on the one IP property, the higher the LVR you feel comfortable with the better. This will allow you to use your funds for multiple IP's with capital growth potential.

Even if you are looking at only purchasing the one IP property in the short term, the excess money would be better sitting…[Read more]

Macquarie is another I can think of that can do similar with what you are requesting with their global limit borrowing on their LOC.

But as Terry said, why do you require this?

Cheers

Tom

Wow, so the solicitor is a fortune teller as well, and knows what the valuation is going to come out at! How prophetic of him.

As the old saying goes, a property is only worth what someone is willing to pay for it. This move on their part might lose them more than $8K.

Cheers

Tom

Hi EW,

If you are looking from a property, on the whole it is better to look for a house than an apartment. They generally have better growth potential.

As JacM suggests, regional areas might be something to look at, or have a look at some Melbourne suburbs that might be lowly priced, but are up and coming suburbs. Just need to do a bit of…[Read more]