Non Footy Chat Thread

[yy_cheng]

Are you saying rent covers your mortgage?

You can get very close to covering your mortgage.

But then you have other expenses e.g. land tax or strata, council rates, etc

But then it's not alot of money to cover that.

With a depreciation schedule, you should be able to still get negative gearing.

 

[Avenger]

And that's when I'll buy back into the property market and get another stupid merkin to pay it off for me.

Suity

Why would you want to pay it off? Negative gearing is most effective when you do interest only loans.

 

[yy_cheng]

maybe Suity is nearly 65 and plan to retire.

 

[Poupou Escobar]

Why would you want to pay it off? Negative gearing is most effective when you do interest only loans.

With interest rates this low you're best off staying in debt.

 

[yy_cheng]

if you had a mortgage on your PPOR, then put it in an offset account there unless you can earn more than the mortgage rate elsewhere.

 

[Poupou Escobar]

It's more that money borrowed for assets should increase faster than the cost of the interest on the loan. After the last few weeks it's a great time to buy shares too.

 

[Gary Gutful]

I've decided to invest in beer.

 

[strider]

I've decided to invest in beer.

Im not sure it depreciates that well mate. Re-sale is a bit tough

 

[Suitman]

I've always found beer to be a very good investment.

Suity

 

[Gronk]

Well thank f**k I followed what Ram said in 2009, sold everything and bought silver.

Silver is worth the same now as I bought it, so I haven't lost a cent. :thumn

Still waiting for the collapse of world order, but at least I am ready for the anarchy when it hits. LOL at you merkins.

 

[Suitman]

Are you saying rent covers your mortgage?

It more than covered it. When I first bought the unit, the rent didn't cover it and it was easily negatively geared. Over time though, as interest rates came down and the rent went up, it was making a profit, which I was also fine with. It helped me pay more off the mortgage and increase my equity to borrow against again.

Why would you want to pay it off? Negative gearing is most effective when you do interest only loans.

I did interest only for a while, until it was making a profit and the increased rent was added to my own income and being taxed.

maybe Suity is nearly 65 and plan to retire.

Not quite. Just setting myself up for retirement.

With interest rates this low you're best off staying in debt.

Yes.

Suity

 

[yy_cheng]

I have this issue now. I need to pay a quarterly tax like BAS as I am positively geared.

 

[Suitman]

I have this issue now. I need to pay a quarterly tax like BAS as I am positively geared.

I never did this but can you contact your lender and increase the payments so it's negatively geared again?

Suity

 

[Gronk]

I never did this but can you contact your lender and increase the payments so it's negatively geared again?

Suity

Increasing your re-payments will not increase the monthly interest component on the debt.

Increasing re-payments will only result in the debt being re-paid quicker and interest reducing.

 

[Suitman]

Increasing your re-payments will not increase the monthly interest component on the debt.

Increasing re-payments will only result in the debt being re-paid quicker and interest reducing.

Yep. My mistake.


Stupid Suity

 

[Gronk]

What many do in a rising market is get the property re-valued and then increase the debt up to the 80% loan value ratio (LVR).

 

[yy_cheng]

What many do in a rising market is get the property re-valued and then increase the debt up to the 80% loan value ratio (LVR).

I didn't know you could do that.

Instead, I have used the equity to borrow 100% to buy other properties. (but now I am not interested in chasing the Sydney RE market)

I am also salary sacrificing to reduce my taxable income.

I am hesitant in buying shares too although my super is in growth funds.

I am also planning to novate lease a new car. (I can't really see the benefit atm with this)

 

[Gary Gutful]

I've always found beer to be a very good investment.

Suity

I'll drink to that.

 

[84 Baby]

I'm looking at how super works, in particular SMSF.

May look at buying property in that.

Did you know if you sell your business you can move the proceeds into Super and pay little to no tax?

My parents have a number of investment properties all paid off.

They are in their seventies and they still pay tax. Their friends moved all their money into super before they retired and pay no tax at all.

I plan to balance it. Some in some out.

I'm am fully expecting another glut of properties to hit the market with old merkins realising they don't actually have enough cash to pay out their pensions because it's all tied up because of LRBA spruikers. Depending on age, I wouldn't be buying property in super if I were you. Definitely take advantage of small business rollover though

 

[yy_cheng]

Why not buy property in super? it has to be positively geared and preferably paid out in full.

From my perspective, it's better than buying outside of super if it is positively geared as rental income and cgt is taxed at a much lower rate.