Hi Michael

Yes – some people do obtain finance AFTER signing contracts… probably not the best way to do it. It sounds like you’ve got everything under control.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi Michael

Transferring the ownership of property and refinancing triggers the following costs:

– property stamp duty on valuation (3.5% to 5% depending on value and State).
– mortgage stamp duty (only if you are increasing the mortgage amount as most State’s only charge on ‘upstamping’)
– mortgage registration and deregistration – $57 each in…[Read more]

Hi Steve

Good question. The answer is that it depends on individual circumstances, strategies and objectives. However…

I0 versus P&I

Why not go IO all the time? If you elect to repay IO your minimum repayments are equal to the monthly interest costs. However, you can always pay more (most IO products allow extra repayments without cost – but…[Read more]

Hi Darwin

You might what to have a read of this article that was in The Age today… see http://www.theage.com.au/

Interesting question where rates are going to go. It’s hard to pick the top and bottom of a rates cycle. Lenders are still dropping their fixed rates so perhaps now is not the right time to fix. You may also like to read my article…[Read more]

Michael, I would like to echo Steve’s sentiments. I alway stop to read your posts (even on a Saturday night…). You seem very knowledgeable. Thank you for sharing.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

I would agree with AlsionW & G-MAN007 in part.

I think a property portfolio need to be cash flow positive and exhibit capital growth. Obviously this can be achieved by purchasing a combination of pure cash flow properties and high capital growth properties (but my rule is that the portfolio MUST always be cash flow positive).

Therefore, Fullout…[Read more]

Thanks Sooshie []

I’m pleased that you found the report useful.

I’m thinking of writing a similar report specifically for investors… but I need some time [xx(]

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi APIM

I’m pleased that you found my website interesting.

By the way, I have done the sums on LOC (and offset) products. They don’t save borrowers very much. At best, the saving might be 5% to 8% of interest over the life of the loan.

See my article at: http://www.prosolution.com.au/ps_docs/prosolution_doc060703_095004.doc

Plus also see…[Read more]

I think I understand what your suggesting Terry. Essentially you’re converting non-deductible debt into deductible debt – is that correct?

One thing that leaps to mind is this arrangement may have Part IV A (anti-avoidance provisions) issues.

Just a word of warning…DON’T TAKE TAXATION ADVICE FROM MORTGAGE BROKERS OR OTHER UNQUALIFIED…[Read more]

Hi Huey

If you have used your PPOR and your IP to secure your IP loan then yes, the bank can foreclose on the loan and sell both properties to recover their debt. If the IP can stand alone (i.e. if the value of the loan is less than 80% of the value of the investment property) then it is advisable to vary your mortgage and release your PPOR.…[Read more]

Hi Wilandel

They never cease to amaze me.

Just as an aside – ANZ restrict the types of products that they will use if you borrow through a trust or company. Therefore you would have had to pay the standard variable rate. ANZ are not the best if your borrowing through a company or trust structure.

Wilandel – I’m happy to help you. I think I am…[Read more]

Ok here’s my two bob…

Hurricane – I think APIM is correct. The capitalised interest is not deductible. Therefore, from a tax stand point this structure is not really beneficial.

From a practical perspective I think its very likely that the government will legislate that capitalised interest is not deductible irrespective of the outcome of the…[Read more]

Thanks for the vote of confidence Andrew.

My direct email address is: stuart@prosolution.com.au for anyone that needs it.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi Sebastian

Yes, you can depreciate these items if they are used solely for income producing purposes. It doesn’t matter if the goods are second hand or new. The purchase cost of these goods can be depreciated over their useful life (which normally equates to a deprecation rate of 5% to 15% on a straight line basis – varies according to the whi…[Read more]

Hi Cazdean

One of the lenders concerns about serviced apartments is that they feel that the value of the rental guarantee is reflected in the purchase price. That’s why most lenders will restrict the LVR on such properties.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi All

In my experience the banks have always been a bit sceptical about these arrangements. They normally want to see these arrangements in place for at least a year and that the rental income is shown on borrowers tax returns as evidence.

As you can see it’s a bit difficult to increase borrowing capacity using these arrangements in the short…[Read more]

Hi Smoke

You may want to check out my article on this site about this very topic. See https://www.propertyinvesting.com/freestuff (its the first article).

Property valuations for mortgage purposes generally have a tolerance level of plus or minus 10%. Therefore, a valuer would have to be convinced by strong evidence that the fair market value of…[Read more]

Try http://www.baycorp.com.au/personal_information/free_credit_services.asp?CountryID=1&UserTypeID=11

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

Hi All

The Court recent ruled that the taxpayers were entitled to a tax deduction for interest accumulating on income producing debt (Harts case).

The ATO recent (in the last couple of months) won the right to appeal this deceision – this is probably what the article was about.

However, the ATO have said that it will continue to deny any…[Read more]

Most (if not all) lenders are very wary of lending in Melb CBD… This is always an good indication that it might not be a good buy (however there are always exceptions to the rule).

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au