Forum Replies Created
Hey MarketMad,
Thanks for your reply. I am just curious; don’t get me wrong. So did they predict on the “most predictables” or more than that?
Thanks very much Leigh,
That’s a quick tip.
Regards
RTHey Crashy,
Looks like I have really confused everyone here. Let me clarify, again.
I said I would rather start investing on NSW regional areas (may be even outside NSW) than spending the same on a private health cover. You know why? Because by taking a health cover, surely I will be able to mitigate my tax burder; but for that, it doesn’t give me any other advantage.Whereas, if I invest on property, atleast it will serve me as a future deposit for my second house. As I mentioned earlier, I won’t be buying anything in Sydney.And ofcourse I will look for properties with +ve cashflow. I am not after negative gearing’s so-called “tax benefits”.
Now please re-assess my views
Thanks very much Simon, for your advice. So what do you suggest about my other part of plans. Do you think I am going on right path?
Regards
RTRT,
In answer to your questions on tax effectiveness of IO.
An IO loan is more tax effective than a P&I loan as it is only the interest component that is tax deductable.
One idea is to set up an IO facility with an offset account where you might credit the principal payments. This will me a method of saving and you can readily access this when you need a deposit for the next property.
This will have the effect of earning you approximately 6% on the savings although it will be virtually taxed.
There are other ways to invest this money for a higher return however you need to be comfortable with the idea that higher return = higher risk. Investing in the offset is almost risk free. The only risk is that of missing out on a higher performing investment.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985
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