Check the wording on the FHOG… I think it might say occupy “WITHIN” 12 months, not “FOR” 12 months?
Don’t quote me… any other takers on this?
Pleading the fifth, but am aware of at least one PI that has utilised loose terminology
Hey, I’m new at this though, so do your research!
What happens when you hedge your bets and aim for 10? Could you still hold them all and comfortably retire?
Foundation: could you give us a “rough” idea of how you do finance day to day living without a credit card? I am a new investor and have always previously relied on them for everything, then religiously paid off the entire balance each month to avoid bank fees. Is it better to use ATM/cash for everyday stuff, wack the mortgage payment in (1st priority – DD) and disperse remainder into Bills acc, savings/offset, saving acc?Originally posted by Peachey2000:Check the wording on the FHOG… I think it might say occupy “WITHIN” 12 months, not “FOR” 12 months?
Don’t quote me… any other takers on this?
Pleading the fifth, but am aware of at least one PI that has utilised loose terminology
Hey, I’m new at this though, so do your research!
The wording is:
You must occupy the property for at least 6 months starting within the first 12 months.
it is amazing how many people assumed it is for a year and also that you lose the FHOG if you buy an IP.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Originally posted by foundation:In 20 years the debt will be negligible.A pretty big assumption there. On what do you base this claim?
18 years ago I bought a property for $52K.I see you’ve answered my question. You’re expecting the past to mirror the future…
Fair enough, so we can expect interest rates over the coming 30 years to mirror interest rates over the past 30 years then? An average of around 10.4%?Imagine if I still owed that much against a property worth $300K+ .If you still owed that much, you would have paid out ~$100,000 in interest on the loan. Subtract 30% from the $300,000 because we are still floating near the top of a 30% overvaluation bubble, leaves $200,000 worth of house with $152k in debt and interest, maybe $8 grand in rates & insurance. Now subtract sales costs…
The picture isn’t as rosy as often painted.
$35k in profit for $160k invested over 18 years is exceedingly poor. Term deposits would yield a far higher return.
Remember, over the long term, interest costs EXCEED capital gains.
Of the two options, choose investment. An average IP only needs to appreciate by ~2%pa to pull a profit, a PPOR needs ~5%.
Cheers, F. [cowboy2]
Foundation, you forgot to include rent in your calculations.
I tend to agree with what your saying however. There is no guarantee that things will be the same as before, especially with rates low. But we can only make calculated guesses – we have to put our money somewhere.
Terryw
Discover Home Loans
Parramatta
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Originally posted by Mortgage Hunter:Originally posted by JohnSmith:Good advice there from Simon
just add the preferred way is to say the money within a mortgage, as it is more tax effective.
Regards
JohnInspired Finance
(02) 9944 7776John,
My preferred way is to save it within an offset account. Should the funds be used for personal expenditure – and lets face it, sometimes good intentions fail when something needs to be paid for, or even used in an emergency for travel, medical expenses or the like.
Should funds be drawn from a mortgage for personal expenses then this % of the mortgage will never be deductible.
this is easily avoided by using an offset account and the tax effect is identical.
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
The only problem with paying deposit for the IP with funds from the offset account is that the interest on the PPOR goes up (as the balance of the offset reduces), and this is not claimable.
What some people do is get IO loans with offsets, then save as much as they can in the offset. When they buy something, they take the money from the offset and pay it into the loan, then make a withdrawal, thus reducing non deductible debt and increasing the amount of interest they can claim.
Terryw
Discover Home Loans
Parramatta
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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