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  1. #51
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    Quote Originally Posted by delirium View Post
    So my narkiness is really a personal one atm as opposed to hating investors overall....
    I find it strange that anyone would "hate" investors. Not having a go at you, I know this is a sentiment shared by many. There is a huge misconception that investors are fat cat rich people sitting on top of their penthouse apartments smoking cigars and laughing at the small folk below.

    Most investors are ordinary hard working Australians. Most investors are just trying to have something for their retirement because there is no way their super or the age pension will sustain their lives, given current life expectancy (which will increase over time as well) and the rising cost of living.

    I had a look at 2014 statistics from ATO (because I'm a huge geek) and found that the majority of people in high income brackets (above 80k) had, on average, extremely low rental losses. Those on incomes of 200k-500k (adjusted taxable income, I.e. Adding back the losses to their taxable income) were reporting losses of about $700-$1000 on average. That's a saving of tax per investor of around $500 max. Meanwhile, there was an overwhelming number of investors in low income brackets (again, adjusted taxable income - so you can't argue that their income was low "because of negative gearing"). The rental losses claimed were between $5000-$20,000. Some of these people had almost no income from wages or other sources. In other words, they didn't save any tax from negative gearing. They are probably the same people who are on a pension. Most of them though were just ordinary people on average incomes. This is where most of the negative gearing is costing "Australia" tax revenue.

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  3. #52
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    Quote Originally Posted by Janesmum123 View Post
    Yea that's the whole point the tenant pays your mortgage. You still make a loss even after negative gearing. So you need to be in a position to manage that. You also need a deposit and stamp duty, agent fees and insurance. And you have to make sure you have money to cover repayments if the property is not tenanted for a period of time.
    Yes of course. But people are effectively saying they are making losses even after NG like they aren't getting anything out of it.

    The tenant is paying the mortgage. Instead of paying 2k a month, you are paying way less. Yes, on paper there is still a loss even after NG. But you are getting a house paid off.

  4. #53
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    Quote Originally Posted by delirium View Post
    Good point, but especially in the early stages of the loan, a big chunk is deductable unless they had a huge deposit or are paying big repayments. Which of course they don't to get the loss.

    Ultimately renting out and NG is a sweet deal, or people wouldn't do it. Why rent out your house if you aren't getting significant gains?
    It's a sweet deal when property prices are rapidly increasing. It's most definitely not a sweet deal when property prices are decreasing or stagnant. I think many people get into investing and negative gearing without realising this and if they did their sums they would find out that they are not making any money.

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    Default Housing / negative gearing / politicians

    Quote Originally Posted by delirium View Post
    Yes of course. But people are effectively saying they are making losses even after NG like they aren't getting anything out of it.

    The tenant is paying the mortgage. Instead of paying 2k a month, you are paying way less. Yes, on paper there is still a loss even after NG. But you are getting a house paid off.
    Not you're not getting the house paid off because principle repayments are not tax deductible, only the interest is. If you have an interest only loan then it won't get paid off.

  6. #55
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    Quote Originally Posted by Janesmum123 View Post
    Yea that's the whole point the tenant pays your mortgage. You still make a loss even after negative gearing. So you need to be in a position to manage that. You also need a deposit and stamp duty, agent fees and insurance. And you have to make sure you have money to cover repayments if the property is not tenanted for a period of time.
    This!!! When we rented our house out in bris our agent told us to have a 5-10K slush fund in case things go pear shaped.

    And six months into their lease - the air con is busted as is the hot water system. Which we have to pay for and fix immediately (accept and understand that) so thank heavens for our slush fund. We had to scrape together that whilst I am still on maternity leave.

    Meanwhile in Canberra - the LL have dodgy cheap insulation and our heating bill will be ridiculous. Our bris home has top of the line insulation and double glazing. Urgh.

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    Quote Originally Posted by witherwings View Post
    I find it strange that anyone would "hate" investors. Not having a go at you, I know this is a sentiment shared by many. There is a huge misconception that investors are fat cat rich people sitting on top of their penthouse apartments smoking cigars and laughing at the small folk below.

    Most investors are ordinary hard working Australians. Most investors are just trying to have something for their retirement because there is no way their super or the age pension will sustain their lives, given current life expectancy (which will increase over time as well) and the rising cost of living.

    I had a look at 2014 statistics from ATO (because I'm a huge geek) and found that the majority of people in high income brackets (above 80k) had, on average, extremely low rental losses. Those on incomes of 200k-500k (adjusted taxable income, I.e. Adding back the losses to their taxable income) were reporting losses of about $700-$1000 on average. That's a saving of tax per investor of around $500 max. Meanwhile, there was an overwhelming number of investors in low income brackets (again, adjusted taxable income - so you can't argue that their income was low "because of negative gearing"). The rental losses claimed were between $5000-$20,000. Some of these people had almost no income from wages or other sources. In other words, they didn't save any tax from negative gearing. They are probably the same people who are on a pension. Most of them though were just ordinary people on average incomes. This is where most of the negative gearing is costing "Australia" tax revenue.
    I said I didn't hate investors lol I was trying to explain my annoyance on the topic was primarily from people IRL who had been given everything then act like they are somehow better for owning and NG.

    I certainly don't think most investors are 'fat cats'. As a long time renter, sadly I'm aware many are mum and dad investors..... that over extend, over capitalise, get greedy then can't afford to fix anything. We've had those LL's. They are the worst kind. They want their rent paid every fortnight but won't fulfill their own end of the TA and maintain the property bc they are broke.

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    Quote Originally Posted by delirium View Post
    I will add before crashing, that this topic is a point of contention for me atm. A few family members I have, that despite consistently making sh*t financial and life decisions have had Mummy and Daddy giving them the deposit, or falling into money they haven't earned. Then carrying on to me how NG should be their god given right and they can't help it if ferals can't buy bc they don't manage their money properly

    My eye has been twitching furiously of late at the irony of that statement ^^
    So my narkiness is really a personal one atm as opposed to hating investors overall....
    I'm not in this situation but this is the kind of thing that I hate about this housing issue. Sure there are some people who have got onto the ladder with prudent saving and others locked out from overspending but often it's just luck / timing / parents ability to help etc. I dunno I just think of houses around us selling for $1.1m and wonder how can anyone afford them. We're not in central Sydney either it's an hours commute each way. I don't buy the idea that people are being too fussy. To buy here now you'd need 2 good incomes. Do people really think someone who's spent years studying to get themselves a good job should then be happy to buy a tiny hovel just to get onto the market?

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    Quote Originally Posted by delirium View Post
    Good point, but especially in the early stages of the loan, a big chunk is deductable unless they had a huge deposit or are paying big repayments. Which of course they don't to get the loss.

    Ultimately renting out and NG is a sweet deal, or people wouldn't do it. Why rent out your house if you aren't getting significant gains?
    I'm going to be blunt here. You don't like investors because you see them pushing up house prices and you can't buy. What you need to do is make a plan to buy. This may entail doing things like increasing your income buy going back to work or buying with a smaller deposit and paying mortgage insurance or buying a smaller home/villa etc. Speak to a broker and see what your options are. Plenty of banks will lend with less then 20% on a good credit rating.
    I get that you are upset and frustrated but instead of blaming those horrible investors make a plan and put 2 years hard work into making it happen. Get work night shift, work at a supermarket, tag team with your husband child care. Get a cheaper rental or move in with family if possible. Do whatever it takes if you really want to buy.
    Or buy an investment property first in a cheap area and negative gear it. Come to the dark side

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  12. #59
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    Quote Originally Posted by babyno1onboard View Post
    Not you're not getting the house paid off because principle repayments are not tax deductible, only the interest is. If you have an interest only loan then it won't get paid off.
    You are missing the point though. If you don't have an all interest loan then you are eating into the principle. The tenant is paying that. Look I get some people will always rent, and god knows no one expects you to house people for free! of course they pay you rent. But if you have high interest % then a portion of that loss is subsided. If it isn't you get little to no NG but your principle is getting paid off by the tenant.

    I know what I'm trying to say lol

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    Quote Originally Posted by delirium View Post
    Is there really a lack of housing in capital cities though? Genuine question, I live rurally
    In our council area there have been 10,000 new residents in less than ten years - there has definitely not been that many new homes built , when I was selling houses in 1995 we had probably 30-40 houses for sale in the suburb I sell in at any one time with an average days on market of 90 days , this week there are 3 houses for sale in the same suburb and our average days on market is 21 and we average 8 registered bidders per property

    Sydney's population is expected to hit 5 million this year 😬


 

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