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Hi dougie, to give you my response on your questions:
1) 85% on your commercial property is very doable (obviously depending on other factors such as servicing), to get to 90% you would be looking at utilising private mezz funders which will be getting overly expensive and being owner occupied would be quite difficult. Feel free to email if you would like more details.
2) My understanding is if you initially purchase a IP, you can no longer use the FHOG for a subsequent PPOR purchase (correct me if I'm wrong)
3) Again, I believe if you purchase the IP, your wife will be unable to utilise the FHOG
Have a look at http://www.firsthome.gov.au for brief details.
Hope this helps
Cheers
RhysJust to expand on APerry's comment about bank bills. These are generally for commercial facilities, the bank bill rates are considered as the lender's cost of funds and they charge on a margin above these. 30/90day bank bills are used for variable facilities and 1/3/5 BBSW etc. are used for fixed term facilities.
Bank bills are market traded instruments that are influenced by the 'markets' assessment of future interest rates.
The advantage of IO is solely for cashflow purposes and on IPs to maintain the maximum leverage. If you have a redraw you can pay off as much as you like and this will reduce your interest payments and enable you to redraw the extra repayments at a later date should you require them.
As far as throwing cash down the drain, the interest repayments are holding costs that are offset by rental income and hopefully capital growth, so although you are not paying down your debt, you are (hopefully) increasing your equity with the value growth.
Jaywol,
My partner (recently my fiance) where in the same position as you, this time last year. We bought our PPOR in November and we should finish some renos in the next couple of months with the hope of building enough equity to start investing in the new year.
So from the perspective of someone who has been in the same position, looking back we are both really happy having bought the PPOR and now we will look to move forward with our investing.
Good luck
RhysStill finding my feet. Hoping to finish off some renos on my PPOR and hopefully build some equity to look to invest in the new year. Still not sure where to look next year, ie property or shares, I guess a lot can happen between now and then.
I guess with big predictions like that, if they are right they look like a genius, if they are wrong everyone just ignores it. They have a lot to gain if they are right, but no one will notice if they are wrong.
What a game next week will be, the Cowboys to get home by 2 in a thriller.
I forgot to add, this only applies to individuals and certain portions of the cost base.
calvin,
The indexation method was used to remove the effect of inflation on capital gains, so you don’t get taxed on the inflation portion of the capital gain. This method stopped when the discount method came in september 1999 when the discount method was introduced.
This method can still be used on property purchased before 1999 but rarely will it provide a better answer than using the discount method.
Rhys
I guess +cf is good for sustaining a quality of life in the present and capital gains are good for long term wealth accumulation (also benifit of 50% tax discount).
Q: Do you see the existence of cf+ properties as simply being undervalued? (Apart cf+ properties created through renovation etc.) As a beginner I struggle to get my head around how they exist in an educated market.
I think I’d rather the wallabies lose than have South Africa win the tri-nations. Lose-Lose situation. Aussie sport is not in its greatest shape.
I look forward to having a play with it.
Go for the pool. If you are willing to pay a bit more, you can buy equipment that will come close to looking after itself.
Rhys
2-2 cut our losses and get the hell out of there!
hkr
I believe in order to be able claim deductions for an asset, it needs to be income producing eg. receiving rent. Maybe it can be structured to be able to do so, but at this stage I think costs are capitalised not deductible. Being held for capital gains alone is not sufficient to be able to claim immediate deductions, you receive the benefit as a reduction of your capital gain.
Rhys
I think buying in an area you know well would be a good idea for your first investment. I think the amount you will learn will be as valuable as the financial benefits and as you get more confidence and experience then look outside you area.
All the best
Rhysilearner,
I’m not 100% clear on this so you may need further advice, but I believe there is a rule along the lines that if you buy a block of land with the intent to build and move in as your PPOR, you have 4 years to do so. I’m just not sure how it works if you have currently elected a different property as your PPOR (as opposed to renting while waiting to move in).
If this does work for you other rules associated with it are:
-You must move into the new property as soon as it is finished
-You must retain it as your PPOR for at least 3 months after completionYou will need to move before you sell it, but you may be able to avoid CGT. Worth checking up on.
Rhys
vexil,
My understanding is since you don’t charge GST on the rent, you can’t claim GST on residential expenses.
Rhys
What are the Poms doing to McGrath?!! I think there must be a few voodoo dolls floating around with his name on it.
Rhys
I’m backing the kiwis, I think the All Blacks at home are close to unbeatable. I couldn’t believe they had the depth at the start of the season to even think about dropping Rockoko and Howlett, highlights the problems the Wallabies are currently facing with injuries.
Rhys
