We've done it!

[Rixter]

Agreed. The big picture is always worth keeping in mind to keep the context. In order to make money we have to spend money - stamp duty always reminds me of that!

Yes, property investment is a business and just like any other business types there will always be operating costs involved. Stamp duty, loan interest, management, repairs/maintenance, insurances, purchasing expenses, etc etc are just some to note.

 

[Rixter]

Progress report...

Today my mortgage broker advised that my bank have finalised my loan documentation and are ready to settle my loan.

Settlement is booked for next Tuesday. Just waiting on my solicitor to get back to me with the amount I need to transfer to him as the balance of funds needed to complete settlement.

 

[Rixter]

Progress report...

I have now been to the bank and sent the Balance of funds needed to complete settlement via a local telegraphic transfer direct into my solicitors trust account. I had to send it over via the bank teller because Westpac online banking only allows $10k per day transfer.

The pre-settlement inspection is now organised to take place next Monday, the day before settlement.

Clock is counting down to settlement taking place in the Sydney CBD Tuesday next week 2.00pm AEST.

 

[Rixter]

Progress report.......

My solicitor advises the funds I transferred arrived overnight into their trust account. Cheques are now being drawn in readiness for handover at settlement next week...

....to be continued.

 

[HiEquity]

I have now been to the bank and sent the Balance of funds needed to complete settlement via a local telegraphic transfer direct into my solicitors trust account. I had to send it over via the bank teller because Westpac online banking only allows $10k per day transfer.

Hi Rixter

Sounds like it's a shoe-in...

FYI - You should be able to get a free SecureID token from Westpac to allow you to increase your transfer limit to as much as you want.

 

[Rixter]

FYI - You should be able to get a free SecureID token from Westpac to allow you to increase your transfer limit to as much as you want.

Nope you cant...I already inquired...$10k is their top tier limit using personal online banking. The token you mention is for business banking.

 

[HiEquity]

Nope you cant...I already inquired...$10k is their top tier limit using personal online banking. The token you mention is for business banking.

Re-enquire with someone else! I use it with Westpac for personal online banking all the time to whatever limit...

 

[Rixter]

Re-enquire with someone else! I use it with Westpac for personal online banking all the time to whatever limit...

Ah excellent ammunition - precedent set. Thanks for the heads up. Where did you go through?

 

[HiEquity]

Ah excellent ammunition - precedent set. Thanks for the heads up. Where did you go through?

Can't remember who set this up for us - we've had it for some time now. May have been our private banker?

 

[Rixter]

Can't remember who set this up for us - we've had it for some time now. May have been our private banker?

Ah ok no probs......yeah I had a private banker for a short stint until I discovered that I had a greater interest rate discount and net worth than he did. I gave him the flick. He didnt know you could even negotiate a bigger discount than the banks top tier 70 bp. They're just employees at the end of the day I suppose.

 

[HiEquity]

Ah ok no probs......yeah I had a private banker for a short stint until I discovered that I had a greater interest rate discount and net worth than he did. I gave him the flick. He didnt know you could even negotiate a bigger discount than the banks top tier 70 bp. They're just employees at the end of the day I suppose.

Yep. We have been through a few now with promotions and maternity leave etc on their part. I find them useful if you actually want to email or phone the bank regarding some problem with their systems. Far better at getting back to you than the telecentre anyway...

 

[Rixter]

Progress report.......

Pre-settlement inspection carried out this morning with satisfactory results.
I would like to thank MJA for all his help and giving up his time, very much appreciated.

Ive notified my solicitor of the outcome and now await settlement affective tomorrow afternoon.

 

[srini]

Congratulations

Hi Rixter,

I have just read through the entire post and am very inspired.

Thank you for sharing your story.

Also read your strategy post at http://www.somersoft.com/forums/showpost.php?p=244355&postcount=7. Very inspiring to read and very informational.

Some newbie questions (happy to be told to look for specific searches on the forum).

1. If you capitalise the interest on your IPs into the Line of Credit, do you still claim the interest of the LoC (interest on interest) as a deduction?

2. How does your bank charge the interest on the LoC? Monthly same as on an IP loan or is it somehow different?

3. If you claim interest on interest as a deduction, what do accountants think about this? I feel uncomfortable claiming interest on interest as a deduction. Somehow feels wrong.

Thanks again for sharing.

Srini

 

[Rixter]

Hi Rixter,

I have just read through the entire post and am very inspired.

Thank you for sharing your story.

Also read your strategy post at http://www.somersoft.com/forums/showpost.php?p=244355&postcount=7. Very inspiring to read and very informational.

Some newbie questions (happy to be told to look for specific searches on the forum).

1. If you capitalise the interest on your IPs into the Line of Credit, do you still claim the interest of the LoC (interest on interest) as a deduction?

2. How does your bank charge the interest on the LoC? Monthly same as on an IP loan or is it somehow different?

3. If you claim interest on interest as a deduction, what do accountants think about this? I feel uncomfortable claiming interest on interest as a deduction. Somehow feels wrong.

Thanks again for sharing.

Srini

Hi Srini,

Thanks for your questions...

1/ Yes I claim the interest on my Investment LOC's as a taxable deduction.

2/ The interest on my LOC's are charged monthly on the same day each month unless the day falls on a weekend. If/when that happens it gets debited the next business day. The interest charged simply gets added to LOC balance at the time. The facility does not required me to make any interest payments until such time as the LOC reaches its credit limit. However I have instructed all my Property Managers to deposit all rental incomes into the LOC at the end of each month anyway.

3/ My accountant (same as me) has no issues with claiming the interest as a deduction providing the LOC is used purely for investment purposes. There is plenty of precedents and ATO cases ruled in favor on this.

We all have different personal risk profiles..You could always get your accountant to lodge a private ruling on your behalf if you're still uncomfortable.

I hope this helps.

 

[Rixter]

My Sydney IP has now settled.....You can find out all about where it is, purchase price and rental return in a New Thread Here.....

 

[investor2009]

Hey Rix!

Can you see yourself ever retiring? Or are you quite confident it will be soon?

Currently in Sydney property shopping for more real estate to add to the portfolio due to lifting our income goal plus further portfolio diversification. Reset time frame a further 2 years.

 

[Michael.Knight]

Hi Rixter,

Truly inspirational story as many other have also mentioned. And a great "real-life" plan that everyone can aim for...

Just have a Q. Your plan was to buy villas, townhouses etc each year. Could you talk more about body corporate fees and whether this impacted your cashflow or not over the 10+ years? Were there ever any disagreements with the body corporate?

 

[Rixter]

Hi MK,

Since I actively started in investing 12 years go I have never had any real issues with strata companies/ body corporates.

The levies them selves cover expenses such as repairs & maintenance of the building and outside areas, buildings insurances & public liability insurances and BC manager fee. All these, apart from the BC manager, you still have to pay for whether you purchased a house or strata titled property anyway.

From a BC levy cash flow perspective you are budgeting and putting money aside for those expenses in advance where as with a house you pay for them as they fall due in the case of insurances, and repairs as the need arises.

From a management perspective, having a BC Manager look after the building and outside of your IP and having a Property Manager look after the tenancy and inside of your IP, works very well especially when you are investing interstate or remote distances from where are located.

If you require clarification feel free to ask.

I hope this helps.

 

[Rixter]

Hey Rix!

Can you see yourself ever retiring? Or are you quite confident it will be soon?

Sorry investor, some how I overlooked your question... My portfolio asset base is set. Just have to let time weave its magic over the compounding CG/equity until it reaches our income goal.. $500k to go.

 

[OKFFW]

Well done Rixter, yours is a truly inspiring tale.