"The Week That Was: 2-8/2, 2000"

From: Mike .

Hi One and All,

Another healthy week with 8 threads totalling 30 posts. The longest thread contained 9 posts. Record is 10 posts.

Topics Included: GST, DHA, Interest Rates, Property Management, and Capitalising Interest.

Quotable Quotes:

From Les: "My crystal ball tells me that the percentage of "GST" topics is going to DWARF any other subject for the next 11 months (the last 6 months as we check it out in hindsight)."

From Gee Cee: "In 1987 -- 1988 interest rates had little effect on applying the brakes to rising property prices!"

Me: Quoting from memory Gee Cee?

From Les: "Many "old-timers" (myself included) have realised that pensions may not be around when it's our turn to retire, so are saving/investing more instead of spending."

Me: Maybe I should have put you in the Forum Museum (old-timer) instead of the Hall of Fame, Les!

From Sue: "Les, you're a card. Just got back from holidays. Great to tune into all the forumites again esp "our Les". Gee Cee, I will answer your previous questions about my persona later. Sue1"

From Les: "Sue1 - you're back!!! Wondered where you were - I've missed you. Hope you had a top time on hols. Welcome back."

From Gee Cee: "Sue 1, you cannot be a true property investor if you can afford a HOLIDAY! How Can you afford to eat; let alone go away on a HOLIDAY?"

Me: Bread and water goes a long way, Gee Cee.

From Sue1: "Thanks Les and Gee Cee, Wow! What a welcome back. And don't worry I didn't stay at the Hilton or anything!"

From Les: "Good to see you back, Sue1 - I look forward to your comments (I often wonder how you manage to "say it all" in about 3 sentences - I haven't learnt that trick yet ;^)"

From Gee Cee: "As a property investor I guess we all know that in the long term our financial positions will ultimately be a lot better off than if we sat on the fence and did nothing but wait for a pension."

From Adam Randall: "Hello I have spent a long time looking for a group such as this. If anyone wants to chat with me I can talk for hours about investment properties. The reason I started investing in real estate was because I am really bad with money, and I needed to put it into something that I could not touch."

Me again: What, can't touch bricks and mortar, Adam? That's news to me.

From Gee Cee: "Dear Leon, I think the ice you are treading on has already melted."

Classic Post:

Tough choice, this week. A couple of great crystal ballgazing posts from Les and Gee Cee were short-listed, as was a post from Sue1. But, after careful consideration, I've decided to give two gongs, this week. One to Gee Cee for his reply to Jonathan's question concerning Property Management, the other to Ian for his reply to Leon concerning Capitalising Interest.

Jonathan's question:

Hi all,

I'd like to know your thoughts on the need for a property manager to have a shopfront in the area where the IP is located. i.e. the local real estate agent.

A lot of management companies claim to be able to manage property wherever it is without the need for a local outlet. Tenants are obtained through print advertising and internet and rent is paid either with direct debit or through any branch of the companies bank.

While I can see the benefits of rent collection in this manner, I feel demand for the property will be reduced by the fact that there are no 'walk in' tenants i.e. tenants who drop in to local real estate agents looking to rent.

I'd appreciate a note from anyone with experience with property management of this kind.

Thanks - Jonathan

Leon's question:

I recently purchased the PIA software & have found it extremely useful in creating a variety of scenarios. I have been trying to work out the fastest way to pay off the homeloan & have an investment property/s.

When I capitalised the interest & expenses on the investment loan (ie don't pay them & have it accrue)I realised that I now have the income from the rental property to put towards paying off the homeloan more quickly ie $150,000 within 4 years. I'm trying to work out the full effect on the IP loan/rent/equity to see if it is worth doing.

At the end of the day we save interest on home loan-which has appreciated over that period & after capitalising the investment loan the total could still be $100wk investment. Are there any tax implications that I'm not aware of? Any comments or experience with this concept? Cheers
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