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Originally Posted by Anthony B
You can negative gear & end up in front, there is two provisos buy newer so the property has a depreciation report worth paying for & don't stretch for huge negative gearing gains.
Positive gearing is the overall goal for you to achieve, start positive gearing start looking for a 2nd investment.
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This.
I don't think many people understand how to utilise negative gearing and automatically think that it must mean that investors are losing money on a property.
I also believe it's always worth paying for a depreciation report no matter how old the property e.g. 1970's apartment still got me a $4k depreciation return
Regarding the current market, it's definitely running too hot at the moment! This also means it is a great time for old time investors to re-value their portfolio and get equity to further invest when it cools down or look at alternative investment classes.
Quote:
Originally Posted by Anthony B
Be very wary of interest only aka pissing in the wind suggestions & if you do go this split it to part interest only & part P&I(principle & interest).
Try your hardest to put down a 20% deposit, lenders mortgage insurance applies for most institutions with lending over 80% of the value of the property, LMI is literally throwing money away there is zero financial benefit to it.
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I disagree here.
Interest Only with 100% offset account is the only way to go if you're going the investment route as the goal is to make the entire loan tax deductible. Why would you pay off the investment loan and pay more tax?
Again, cash is king - you basically want to use as much of the bank's 'money' and none of your own (keep all your cash in offset). The principle + interest is recommended for those who are living in their purchased home or are poor money manager - not investors.
Furthermore, LMI is not a bad thing. If you can pay 3k LMI to get an extra 20k in a loan - it is worth it to save you 20k cash. LMI is tax deductible also...
Quote:
Originally Posted by Alpha Trion
I just bought a house off the plan, by the time it's built it will be worth approx 100k more than i bought it. Flip it in a couple of years and there's easy money.
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Congrats on your purchase!
I've always personally viewed OTP investments unfavourably, however am curious as to how you know that it will be worth 100k more once built?