[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 22, 2010 - 11:20 am

Hi Pat,

You will certainly find some motivating stories around the forums – and many of them come from people with average incomes, minimal capital, and several kids too!

I hope you enjoy your time here, and best of luck with your plans!

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 22, 2010 - 11:17 am

Thanks Dan, I tend to agree with you on the extra charge point.

With regards to an agreement about cleanliness of grounds and dwelling, I think this is a little too hard to define and near impossible to monitor. I'll think about it some more though.

Any other thoughts/ideas?

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 20, 2010 - 6:29 am

except LMI

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 18, 2010 - 8:29 am

Oh but wait… the property market might have crashed by then!?

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 18, 2010 - 8:28 am

I definitely agree. There's only so much info you can gather about a place without actually being there.

Schedule it in for Late April, early May

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 17, 2010 - 8:36 am

Hi dbliss,

It could be fear of losing money, or it could be"analysis paralysis" (something I suffered from , but got through due to the people around me pushing me to take action!!)

"Analysis paralysis is where you can’t take any action due to over thinking about the details or over planning and is one of the best “action” killers we can possibly find. Planning definitely helps when we are starting a new project but it should not be to the extent that it overwhelms us and causes us to fail to make a decision and take action.

My advise would be to simply find a very small project, and just GO for it! It is almost worth losing a small amount of money to take the first step, because once you have done so, you will never look back! Others advice will vary on this topic, but just a suggestion.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 1:10 pm

No probs.

Like I said, I'm still a fan of Interest Only & Offset!

Until next time!

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 1:04 pm

Agree to disagree?

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 12:45 pm

You say you are interested, however seem quite sure that "non are good reasons" of what I have provided so far, so this is the last time I will explain.

1. Just because both add up to you doesn't mean that both will add up to the financier –  The servicing capacity concerns are still there for the bank as the person borrowing the cash could take funds out from the offset at any time, and then be left with the loan balances. As you provide mortgage broking and financial advice, you should be all over this sort of thing.

2. Without going into detail on estate planning (for which I am far from an expert), perhaps some people would just like things left in a nice, neat state to pass on to their relatives? Many people pay down debt for peace of mind, which is probably another valid reason to pay off principle.

3. I understand your point, however whilst income and asset testing is generally done on a net basis, I am sure the solicitors of the opposing party would have a field day with half a million bucks sitting in an offset account of an ex husband or wife.

4. noted.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 12:10 pm

1. Despite having large amounts of cash in offset accounts, the bank may stop lending to you at a cetain debt level – For instance, even if some people have loans which are fully covered by offset cash, the bank will still only lend up to a cetain level based on serviceability if the borrower was to remove the cash the next day and spend it all on a holiday.

2. Depending upon the age and the 'stage of life' of a person, they may decide that they would like to pass on unencumbered property or other assets to their family upon death, rather than a property with a loan, and a whole heap of cash against it. The latter could cause taxation and estate planning complications.

3. Family/Child support situation where payments need to be made, and bank statements are required to be provided to assess available income.

4. Loan in joint names where one party (ie: husband or wife) wants to spend the available cash "because it's there" where the more investment minded partner doesn't (similar to your discipline comment)

Those are the first few that came to mind.. Happy to consider a few more if you are still interested…

As a side note, I will always have I/O loans with offset accounts, but it isn't suitable for all situations.

…and I'm glad you changed your response from "Never" to "almost never" – thanks.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 11:57 am

Haha, I thought you might like that suggestion D

I do most of my shopping online, but need to get out and pound the pavement more often, so lets do it!

I'd be up for drive out West even if you're interested – It seems to have the only cheap property within 30 mins of the city these days – Surely not for too much longer.

I'll PM you the property i'm looking at right now too… I need someone to bid for me as I'll be in the U.S when the auction is on too – Want to go to auction with my cheque book for me? (Just don't go to any other auctions – lol)

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 11:45 am

number 8,

There are several, but never mind, you probably wouldn't be interested.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 10:43 am

I think I overheard DWolfe saying that she wanted to take us all through one of their development projects. Something about a 3 unit site at Box Hill?

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 10:37 am

Hi Tim,

No, unfortunately payments of principal can not be claimed as a tax deduction.

As a general rule, it is only costs incurred in the earning of your investment income which can be claimed.

eg: Interest is a cost of the principal of the loan, but the principal itself is not a cost or an expense.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 16, 2010 - 10:34 am

Hey Christian,

I would love to read it and provide some feedback. I am relatively inexperienced with development, which is probably the same as the majority of forumites. I can tell you all 'newbie' things that it doesn't cover which you might assume that people already know.

Will PM you my details if you are interested.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 15, 2010 - 10:28 am

One word, Delfin

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 15, 2010 - 7:35 am

Hi Amie,

Do you have an offset against the Variable Rate Loan?  (It is not possible to have an offset account against a fixed rate loan).

If so, put all the money in there so you are saving interest, but still keeping the cash available for another purchase.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 14, 2010 - 3:45 am

IZ, just to expand on Richard's comment, it is a good idea to set up an offset account for each new property anyway, even if you still have some non-deductible debt.

As Richard said, you would put all spare cash into the offset account against the non-deductible debt until such time as it is repaid in full, however it is good to get the structure for the IP's correct to begin with as well.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 12, 2010 - 12:35 pm

Could also be as low as 7% for this type of deal.

[YoungInvestorParticipant@younginvestorJoin Date: 2003Post Count: 377]

March 10, 2010 - 5:01 am

it was up this morning!