Hi New Investor

Kangaroo Valley is one example and the Piction area as well (20% growth over last year or so)-And only 1 hr from city on the M5

Terryw
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Hi Nick
Here is a rough guide on LMI rates:
LVR Up to $300,000 $300,001 to $500,000 Greater than $500,000
0 to 80 0.35 0.45 0.69
80.01 to 81 0.46 0.58 0.9
81.01 to 82 0.48 0.6 0.93
82.01 to 83 0.61 0.78 1.22
83.01 to 84 0.66 0.84 1.32
84.01 to 85 0.78 1 1.56
85.01 to 86 0.85 1.09 1.7
86.01 to 87 0.93 1.19 1.86
87.01 to 88 1 1.27 1.97
88.01 to 89 1.09 1.4 2.19
89.01 to 90 1.19 1.49 2.38
90.01 to 91 1.32 1.69 2.63
91.01 to 92 1.37 1.76 2.73
92.01 to 93 1.47 1.85 2.92
93.01 to 94 1.59 2.04 3.16
94.01 to 95 1.68 2.16 3.33

Terryw
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hi Soma

I made a posting a few months ago about my situation.

The tenant was behind about 1.5 months. He knew he was on the way out, he lost his job, had no money etc etc. In the end, he just left one night – never to be seen again. I now have the debt collectors chasing him.

I wouldn’t wait too long. After being 2 weeks behind, ask them to start paying an extra $20 per week until they catch up. If they don’t send them a letter asking them to leave. That may shock them into catching up.

is this a wrap or lease option? Whih state are you in?

Terryw
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walkernick

I am a broker, but not in the office at the moment, so will try to dig out the info for you on Tues.

There are 2 different insurers-each with different rates, and then it differs whether it is onwer occup or investment. It is also a sliding scale-as the LVR goes up so does the percentage. And, some banks even mark up what they are charged from the insurers so it can vary from bank to bank.

Terryw
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APIM

I wasn’t talking about capitalising interest. it is kind of hard to exlain, especially on a forum like this. So I will try to give an example.

A)You have a LOC, balance Nil
A home loan, Balance of say $100,000
C) IP loan, IO balance of $100,000.
D) a 100% offset account linked to the home loan with $10,000 in it.

All rent and other income goes inot your Offset account (D) so that it reduces your non deductable debt.
The IP interest is added to the IP loan, and you pay it via a direct debit from (D) the offset account.
Now the good bit, Your rates for the IP are due, $500. You could pay them from the offset account, but doing this would mean the interest on you homeloan would increase as money comes out of the offset which is linked to the homeloan. SO YOU BORROW THE MONEY FOR THE RATES FORM THE LOC.

The effect is you can claim interest on the payment for the rates, while at the same time decreasing the non deductible debt on your home loan. This is like converting your non deductible debt into deductible debt.

You won’t make much of a saving (Eg $2000 in expenses per year = $120 in interest claimable = $60 saved???), but if you have a few properties, it can all add up.

Like Stuart said, I am a mortgage broker not an accountant, so not qualfied to give tax advice. And I don’t know how the ATO would treat this. Part IV A (anti-avoidance provisions) may apply-but I see this as borrowing for a legitimate business/investment expense. Beware! Would any accountants out there like to comment.

Terryw
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I think many accountants don’t understand investing. Definetly a trust is the way to go if you are going to buy a few properties. I did it for the tax savings-asset protection is just a bonus.

Also buying your PPOR in a trust is, maybe, not such a good idea. Initially you may be able to claim a loss (against other trust income), but as you will be required to pay market rents, it will eventually be cashflow +ve, and you would have to pay tax on your own rent. And what happens if you sell? CGT! Your PPOR is your only tax free asset.

Terryw
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Sooshie

I just stumbled accross a document entitled “Development, Building and Subdivision Guide-Rules and Regulations” issued by the City of Lake Macquarie. It can be found at:
http://www.lakemac.com.au/business/pdf/development.pdf

Most councils would probably have some similar documents available either on hteir web site or a physical document.

Terryw
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MattK

How small actually? if it is over 40sqm, then that is not too bad, but if it is under, then there is only a small number of lenders that are willing to llok at it.

Thanks for the referral Michael.

Terryw
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You won’t gain that $40K all at once, but over 30 years or when they cash you out.

When you get it, you can just do 2 more wraps!

Terryw
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Hurricane

What about this:
1) home loan
2) Ip loan
3) LOC sucurred on home

Use 3 to borrow money to pay for all expenses relating to Ip except interest payments on 2. Eg rates, insurance etc. All future deposits can also come out of this account. This method should help in reducing the home loan balance faster than normal and increase your tax deductions.

Terryw
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