Newbies: Is there a reason?

Discussion in 'The Buying & Selling Process' started by Gockie, 19th Oct, 2016.

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  1. Gockie

    Gockie Life is good ☺️ Premium Member

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    Is there a reason why there's a bunch of newbies who have the notion of paying off their IPs or buying IPs with no loans? Has there been a new book or TV show or magazine article or Internet story or spruiker pushing this idea?

    Seems like there's a bunch of newbies all asking this question at the same time.

    Nothing wrong with that, it's just very odd imo.
     
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  2. Phase2

    Phase2 Well-Known Member

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    maybe they've been having newbie meet-ups at cafe's that don't sell smashed avocado on multi-grain rye?? maybe the idea popped up and now they're running with it :)
     
  3. wombat777

    wombat777 Well-Known Member

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    The things that make you go hmmmmm
     
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  4. Barny

    Barny Well-Known Member

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    Yep bernald salt is to Blame.
     
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  5. c_west

    c_west Well-Known Member

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    Personally I can see the value in paying down loans a little while rates are at record lows. Im actually paying extra into my IP loan at the moment, i figure it gives me some extra redraw for maintenance, share purchases etc should an opportunity arise.
     
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  6. Gockie

    Gockie Life is good ☺️ Premium Member

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    Do you have a PPOR loan? And when you say redraw, do you mean redraw (from loan) or a deposit from offset?
     
  7. Jerry O

    Jerry O Well-Known Member

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    why not utilise the offset account? it has the same effect as paying it down. unless of course you move funds around every time there's extra cash in the offset?
     
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  8. c_west

    c_west Well-Known Member

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    I do have a PPOR loan, but I will be leaving it in just over a year and renting it out so I have set it up as an almost IO loan (defence loan so cant go full IO) and am just paying down other IP loan with the extra cashflow. IP doesn't have offset sadly as we were limited with lenders when purchasing so couldn't be too fussy.

    Also this strange thing tends to happen when we have large amounts of cash in our PPOR offset, all of a sudden the boss suggests we need to upgrade things or go on a holiday, so I'm just looking after us in the long run!
     
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  9. kierank

    kierank Well-Known Member

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    You need to educate your 'boss' or get a new 'boss' :) :)
     
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  10. Phase2

    Phase2 Well-Known Member

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    Yeah I've heard that one before. :) Share the plan and sell the benefits.. or is that sell the plan and share the benefits?? Anyway boss will come around...
     
  11. Angel

    Angel Well-Known Member

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    That explains it then :)
     
  12. Drunkanbarbarian

    Drunkanbarbarian Well-Known Member

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    I could say the same to you guys , use are always pushing debt and leverage, must be the meet ups at the cafe's;)
     
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  13. larrylarry

    larrylarry Well-Known Member

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    Do what you're happy with. At the end of the day, it's your IPs and your money. Others have explained why they leverage. If you think it doesn't suit you, all is good. The meetups are for people who are keen to learn and share. Everyone's different. Some walk away wanting to do more in their portfolio, some walk away thinking it's too hard. It's all good. :)
     
  14. Heinz57

    Heinz57 Well-Known Member

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    Yes nobody ever went broke paying down debt
     
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  15. Ghoti

    Ghoti Well-Known Member

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    Yeah, must be that Bernard Salt they put on the smashed avo on rye :p
     
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  16. Sackie

    Sackie Well-Known Member

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    Some newbies really want to learn from those who have a little bit more experience and some runs on the board. Other newbies would rather stick to their position and not let the experience of others in. They won't built wealth if that's their goal, imo.
     
  17. Jerry O

    Jerry O Well-Known Member

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    just stick around the forums and keep reading. you will find out eventually why this is the general consensus.

    But hey, as other's suggested. to each his own. if you have found a way to do things that will benefit you and be very comfortable with. Then good on you. its better than other people who haven't even taken an action to be better off financially.
     
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  18. JDP1

    JDP1 Well-Known Member

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    Correct.. It must be signed grain...if there is such a thing.
    So unfair...I mean, how can anyone eat ordinary stuff... Now..where is my first home in Bondi :)
     
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  19. Indifference

    Indifference Well-Known Member

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    Perhaps you could elaborate on the peculiarities & benefits of your loan as many here probably wouldn't have a clue..... it is important because not knowing means they can't possibly appreciate the circumstances.

    Could you please explain DHOAS & more importantly what it means when/if your PPOR becomes an IP.
     
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  20. c_west

    c_west Well-Known Member

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    Off topic but....

    After speaking to my local NAB branch I have set up my DHOAS payment to form part of my PPOR loan payment instead of extra. Using different numbers for ease of explanation - $1200 p/m P&I payment reduced to $1000 p/m after paying down PPOR debt to extract equity for IP. DHOAS loan only comes in P&I payment only but with my setup tax free DHOAS payments contribute $220 a month whilst I contribute $780. With the increased cashflow I'm putting extra into PPOR offset and a little extra into IP.

    I still get DHOAS payments when PPOR becomes IP as long as I don't re finance the defence loan and don't purchase another PPOR in my new location. This could turn the original PPOR into a bit of a cash cow. However, I only have 2 years once notified I am moving to take advantage of another scheme that will cover all selling costs should I sell my original PPOR. Depending on what the Adelaide market is doing at that stage will determine whether I hold or sell.