If you have private debt, never good to use your cash for investments. Best to use equity by settling up a separate loan on the home and investing that. Keep the cash to pay down your home loan and save interest and increase tax deductions.

hi KuradjiI don't know that much about SMSFs myself, not having one. I had began to look into it, but it is so complex and fast changing it is hard to keep up.I would recommend you do a lot more research before setting one up as you seem to be like me. You don't want to waste money setting one up to find it is no good.for starters have a look at…[Read more]

Some points to consider:   By thinking about what to do for 4 months you have missed out on $5000 in rent!   If you sold and put $130,000 into your home loan you may save around $6,500 in non-deductible interest per year.   If you kept it you would get any future capital growth – now may not be a good time.   If you had the loan IO with a 100% o…[Read more]

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Why not post some figures/?

A lot of people's properties have dropped below what they paid for them – you may be lucky.

If you sell IP 1 you may end up with $80k before CGT. This could be put off your home loan saving you non-deductible interest – but if your plan is to buy another property again you will have stamp duty and buying costs etc. I think selling can be good if you can reduce private debt in some cases.

I think most banks will tell you the valuation figure. Valuations from the same valuer vary (down usually) when a bank is instructing.Also if you get the valuation done before exchange and then exchange at a lower figure the new value is going to be lower, likely, as this is the 'true' market price. Its only rarely that the value comes in over.

Yes, i can't see any point in investing in something without a capital gain either. You will also have entry and exit costs – not to mention difficulty selling and the low leverage.

I would get a LOC on the existing house and use that as 20% deposit and borrow the remaining 80% for the 1st investment. Make the loan IO with a 100% offset account attached. Place all of your cash into the offset. This way you have not used any of your cash and you still have it available for future investments if need be – and you have a…[Read more]

Since you will be only renting out for 5 years you need to determine if the LMI will end up cheaper than the extra tax deductions to be gained by borrowing more.You also said you may sell the current PPOR to the wife, so maybe consider paying off this loan and reborrowing the deposit so you can claim the interest on this portion and reduce the…[Read more]

AAQ wrote:
So what is the best way to protect your PPOR from anybody who would sue you?Is there a way to fully protect it?Cindy & Brian

Speak to your lawyer, but some others things are: – Discretionary trust holding mortgage – discretionary trust holding an option to purchase the property- long term leases etc

Thats true. No good having an offset account if you are a spender.

I don't think there are any specific books on this topic, there are general taxation books which could help, one is the tax summary which comes out annually. There is also the booklet on CGT from the ATO which may help you understand the tax in general.I think if you are conducting a business of renovation you should be able to claim tools. But…[Read more]

Westpac is my fav lender at the moment.St G is good, but their offset accounts are confusing. There are a few different versions. One version actually reduces the principle of the loan. I even have one client on the offset that reduces the interest rather than the principle and he tells me the loan still also reducing.

I think Tribecca merged with Kaplan and then Kaplan merged with the securities institute.

If you enter into a rent to buy type agreement (as the renter) you will be purchasing an option on the property – ie entering into a separate option contract. This enables you to register a caveat on the title.

If the owner stops making repayments on the loan the 1st mortgagee will start recovery action. They will have the right of sale under the…[Read more]

You will also be up for stamp duty on transferring your dad’s share to yourself – if that is what you meant when you said “then house title will then be under my name”.

Dan42 wrote:
The problem you may have is that if you had the funds from the sale to pay out the LOC, and you CHOSE not to, the nexus between the interest payments and the relevant income earning activity will be broken, and therefore not deductible. However, in Brown's case, the monies received for the sale of a business did not fully repay the…[Read more]

Hi

Firstly, it is not a good idea to buy using a Pty Ltd. You will pay more tax. (its ok if the company is trustee).

Secondly, it doesn’t matter who the owner is. If money is redrawn (borrowed) the interest will be deductible if the money is used for business purposes.

I would not pay any extra on any loan – just use the offset.