Why sell a good property to purchase inferior one(s)?

This property costs about $6000 pa. This is before taking into account the tax decutions.

In 4 years it has increase in value by about $25,000 per year. This is tax free if you do not sell.

If he does sell and releases money, he could buy a few cashflow positive property. But often these sorts of properties have low or no growth potential. if he buys say 10 properties earning $40 per week he might be making $20,800 pa. But he would have to pay tax on this money, and the growth of these properties would probably be poor.

What about keeping the existing and buying additional property -cashflow positive which could then offset the negative on this one.

And as SL said above, the rents will gradually increase and this one will become positive in a few years anyway.

Terryw
Discover Home Loans
North Sydney
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I would see no real benefit in selling. sure, you may free up a little bit extra, but you have to live somewhere and your home is your only CGT free asset.

If you want to buy property, just go for No doc or Low docs at 80% LVR. With that much cash and equity, you should be able to buy $2.8 mil worth of property (in theory anyway). That should be enough to get you going, and then by the time you have finished pruchasing, values would have increased, so you can start again.

Have a look at trusts, and to stretch your borrowing capacity much furhter just have one trustee. ie have a trust for the wife and one for the husband. This is also safer for asset protection.

A good strategy would be to buy your ideal dream home (in personal name) – the one you would like to retire in (within reason of course). Then rent this one out for 5 to 10 years. Then sell your home – tax free, pay the money off the mortgage and then borrw to invest.

Terryw
Discover Home Loans
North Sydney
[email protected]

I think it would be based on the date of the contract of sale of the land.

Terryw
Discover Home Loans
North Sydney
[email protected]

I would pay down PPOR loan and then set up a LOC, use this as deposits and buy 5 more $100,000 properties.

Terryw
Discover Home Loans
North Sydney
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I can’t see why your wife would be required to guarrantee the loans – unless your income was not enough to service.

I think a solicitor shouldn’t charge more than about $200 per this advice. But some of them take it very seriously and do give you thorough advice, and charge for it.

It is unfortuate, but nearly all lendes require guarrantors to get independent legal advice. Most know what they are doing but some don’t.

eg A story forma few years ago. A guy got his old mum to guarrantee a loan. He went bust, the bank tried to forclose on mum’s property and she did not know what was happening. In the end she took them to court and won the case as she didn’t understand what she had gotten into.

Terryw
Discover Home Loans
North Sydney
[email protected]

You can do both.

If you have spare cash, pay off your home loan and then reborrow the money to invest.

This way you are reducing your non deductible debt, increasing your deductions and getting hopefully higher investment returns.

Terryw
Discover Home Loans
North Sydney
[email protected]

The ATO wants to know about your worldwide income, so you will be requried to declare your NZ income.

Terryw
Discover Home Loans
North Sydney
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Not really. If the car is relatively new you may be able to get finance on it. There was one lender (Liberty) accepting vehicles as additional security to get the deal over the line, but they no longer do this.

Terryw
Discover Home Loans
North Sydney
[email protected]

Do you have a PPOR with a loan? If so the cash may be better used by putting it ina 100% offset account attached to this loan.

If you are currently on a honeymoon rate, why not just stay at the same bank and access the equity that way? Either corss securitising or getting an additional LOC on the same property. If you got the LOC, you could even go to another bank for your next loan.

Terryw
Discover Home Loans
North Sydney
[email protected]

I once went to one 5 day seminar which cost $5000. There would have been 200 people there and they held one of these seminars every month. = $1mil per month in seminar fees!!!

It turned out to be a waste of time and I ended up getting my money back – only after going to the Dept of Fair Trading.

Terryw
Discover Home Loans
North Sydney
[email protected]