Pyramid, I think you will find wrappees will also ahve to pay stamp duty on their purchase (within 3 months of exchange in NSW) of $340,000 – unless they are first home owners.

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Hi

Its good to start planning now.

The bigger the deposit the better. Generally 5% is needed plus assume another 5% for stamp duty and other costs. But there are also a few No Deposit home loans out there now (St George, Westpac).

You will need permanent employment. Contracting is not so good (for getting a loan anyway). generally they want 3 months employment.

Savings history is generally 3-6 months with 3-5% saved, but there are loans without this requirement.

These days no guarrantors are needed.

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Just watch out for CGT. you may lose the CGT exemption (paritally) on your house.

BTW, I think Derek meant the ATO website.

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Sounds good.

I lived in something similar when I went to uni is Sydney. Students are also a good market. Some places even have balconies converted into little bedrooms.

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It would all depend on your borrowing capacity and your deposit/equity. You could do it one day after buying your IP, or it could take years. It all depends.

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Hi Joeic

Different peopple have different methods. There is no one best way. If it was me, I would be looking for high growth property. It would be a bonus if positive geared. If you have a large deposit, it is OK to use that, but also consider the possibility of using as little as possible (and maybe paying LMI) and putting the remainder in a 100% offset account. That way you are saving interest, and can easily access the money if something else comes up – eg. another proeprty and/or some more shares.

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Derek

If you are paying PI you could always withdraw money (lif you loan allows it) and then use that for investments. This way you are paying your non-deduct debt down too. If you pay IO and leave the money in an offset, then when you use it the interest on the home loan goes up again.

And on retirement, have you thought about flogging your home and moving into an investment ppty. That way you avoid CGT altogether. This would depend on what your investments are like compared to your home.

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Hello Rob

I think you will find the unit holders are only entitled to income from the trust. When a property is sold, then the trust will redeem the units and the capital gain will be able to be distributed to the various beneficiaries at the trustee’s discretion.

But I am not an accountant, and do not have a hybrid (but should have got one!).

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THis is a 7% return which is not much more than a standard property. But with this you will have many more expenses and much more risk and complications.

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Yes, Westpac are funny about trusts. Try virtually any other lender.

Also be aware that your broker will probably have to give back his commission (actually it will be taken back!) if you discharge the loan within 3 months.

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