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  1. #41
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    Quote Originally Posted by BigRedV View Post
    Well if you can't afford a house in Sydney or Melbourne but still want to live there, you can always just buy a cheap property elsewhere, like Brisbane or Adelaide or Hobart, negatively gear it and then push the house prices up for the people wanting to buy there
    That's not a joke, that's pretty much the best thing you could do.

  2. #42
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    Quote Originally Posted by Elijahs Mum View Post
    The reasons it's inflated is because of low interest rates and demand , our population is increasing but houses in most suburbs are not - thus creating a huge demand - the government can't stop it so it needs to focus on better transport , releasing new land and employment opportunities to the outer suburbs so first home buyers and young families can find affordable housing or like a lot of my buyers do who need /want to stay in the area buy units or smaller properties they can afford now
    This! So well put! 👏🏼

  3. #43
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    Is there really a lack of housing in capital cities though? Genuine question, I live rurally

  4. #44
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    One thing that I don't quite understand is why some people think negative gearing is a good thing for your personal finances... Yay let's intentionally lose $1,000 a month so I pay $350 less tax!!! Of course that's great if your property is going up in value by more than $650 a month (plus whatever the agents fees will be to sell it and whatever you paid in stamp duty when purchasing the property - which can be a lot) but outside of Sydney and Melbourne that's just not happening. When the market in Sydney and Melbourne slows down and the younger investors start settling down and having children, watch them drop these houses fast when they are on a single income and need that $650 a month to pay for nappies.

  5. #45
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    So an example:

    A LL's mortgage is $2000 a month. He has a tenant in there paying $1500. He's making a loss of $500 a month. He neg gears and gets back say $150-200. He's still making a loss on paper of 300 a month right?

    But his 2 grand mortgage is being paid for essentially 300 a month with some possible expenses for the tenant.

    That's a pretty sweet deal....

  6. The Following User Says Thank You to delirium For This Useful Post:

    Wise Enough  (11-05-2016)

  7. #46
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    Quote Originally Posted by Tinkers View Post
    There had also been a lot of overseas investors buying property in Sydney and Melbourne.
    I have more of an issue with this than negative gearing and cgt discounting!

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    Tinkers  (10-05-2016),VicPark  (10-05-2016)

  9. #47
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    Quote Originally Posted by delirium View Post
    So an example:

    A LL's mortgage is $2000 a month. He has a tenant in there paying $1500. He's making a loss of $500 a month. He neg gears and gets back say $150-200. He's still making a loss on paper of 300 a month right?

    But his 2 grand mortgage is being paid for essentially 300 a month with some possible expenses for the tenant.

    That's a pretty sweet deal....
    it's not that full mortgage payment that creates the rental loss, it's the interest expense only that is able to be claimed as a rental deduction. so unless they're paying an interest only loan, the full $2k is not contributing to the loss.

    that's an important distinction here, I hope everyone reading along gets that too?

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    babyno1onboard  (10-05-2016),Elijahs Mum  (10-05-2016),Rose&Aurelia&Hannah  (10-05-2016)

  11. #48
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    Quote Originally Posted by delirium View Post
    So an example:

    A LL's mortgage is $2000 a month. He has a tenant in there paying $1500. He's making a loss of $500 a month. He neg gears and gets back say $150-200. He's still making a loss on paper of 300 a month right?

    But his 2 grand mortgage is being paid for essentially 300 a month with some possible expenses for the tenant.

    That's a pretty sweet deal....
    But only if the house is going up in value, and enough to cover the cost of stamp duty and agent selling fees. If that's not happening then it's a waste of $300 a month.

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    Rose&Aurelia&Hannah  (10-05-2016)

  13. #49
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    Quote Originally Posted by delirium View Post
    So an example:

    A LL's mortgage is $2000 a month. He has a tenant in there paying $1500. He's making a loss of $500 a month. He neg gears and gets back say $150-200. He's still making a loss on paper of 300 a month right?

    But his 2 grand mortgage is being paid for essentially 300 a month with some possible expenses for the tenant.

    That's a pretty sweet deal....
    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.

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    Rose&Aurelia&Hannah  (10-05-2016)

  15. #50
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    Quote Originally Posted by turquoisecoast View Post
    it's not that full mortgage payment that creates the rental loss, it's the interest expense only that is able to be claimed as a rental deduction. so unless they're paying an interest only loan, the full $2k is not contributing to the loss.

    that's an important distinction here, I hope everyone reading along gets that too?
    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?


 

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