How do I get there?

Buy 00 farina and mix with Aqua e Levito e sale.

Can't get good pizza bianca here. I'd pay $500pw for a plentiful supply.

Seriously though anything you could import from back home?

 

Haha Cactus, the start of your post made me lol.
It has always tickled my mind, and perhaps you are right and I should look into it more and more..
Grazie and I hope you are well,
MB

 

Ellejay, you don't stop surprising me. Thank you for another meaningful and useful post, I didn't know about the meet ups, I will look for them right now as I am very flexible with work and face-to-face learning is where I swim better.
I have booked with an accountant for next week (referred to me, but I want to test the waters and see how he is) and hopefully from my tax return we will shift the convo to my goal.
In the meantime I wish you well and hope you had a great day out there.
Ciao for now,
MB

 

Hi Marco

Another member on this forum from Italy residing in Melb @Luca, may be you guys want to connect??

Some great advice on this thread. My suggestion is keep learning and the key is persistence and networking.

Where are you from in Italy, I am just curious. My family is from Sondrio

Ciao

MTR

 

Hi

To Marco: My parents arrived in Melbourne in the 1960's and are both from Italy, I was born in Australia. If the internet was around in the 60's then I am sure my father would be asking similar questions as you have in this thread as he arrived in Australia with absolutely nothing and got a full time job working in a factory and had a short term goal to pay off the family home and that was it.

Fast forward to 2016 my father is 74 years old and has a property portfolio returning over $1m per year with no debt whatsoever and this has taken just over 50 years, I thought I would write this to give you a little inspiration. He came to Australia with no qualifications and couldn't read or write english.

I understand you have a medium term goal of 5 - 7 years and I will be honest you should look a little longer than that, I have not been to any of the propertychat meetups but are thinking of attending one from September 2016 onwards as I do have a lot more spare time now so might be able to catch up with you.

I would not consider purchasing any property in Italy whatsoever. Every relative I know that did that has regretted it and wish they never did so and the laws are as you are aware not favourable for property investors in Italy.

Regarding which approach to take to achieving your goal, I suggest reading lots on these forums and asking many questions.

Regards,

alicudi (You may recognise my username as it is a little island off Italy)

 

Ciao MTR,

I am from Trento, not far from Sondrio actually! Have you been there?

Hope you are well, and please don't hesitate to pass my contact to Luca.

Ciao for now,
MB

 

Ciao Alicudi,

Thank you for your kind message, it surely is an inspiring story: we all need these positive thoughts to boost ourselves up! I am based in Melbourne, and it would be great to catch up, I have plenty of time due to the flexibility of my job, so we can definitely organise something.

I will be attending the meet up in Footscray on this coming Thursday, I am sure it will an interesting night.

It is far from my intentions to buy in Italy, mostly because of very 'pro tenant' laws and high taxation.

I hope you are well,

MB

ps. I have never been to Alicudi but it looks fantastic!

 

Si, many times and lived there about 12 months working holiday when I was younger, been to Trento nice. What's there not to love about Italy

 

True, I love home, but Australia is gorgeous too! I guess everyone prefers the place they can call home Are you in Melbourne?

 

no, in Perth but I develop property in Melb. have a read on my Thomastown and Croydon projects if interested

 

What great thoughts, i especially like the investing in Italy idea! I am also more into P&I mortgages.. as while the theory of IO payments makes sense and majority does it, i just dont feel comfortable with it.

 

I don't know about shares but regarding actually paying off a home, there is some very very basic maths that almost no one understands and they lose the biggest investment return imaginable because of it.

your repayments on say a standard 30 year loan will not change throughout the life of the loan.
the bank gives you an amount, and you basically pay the same amount at the start through to the end.

here is a very basic graph but you must have seen something similar before
https://www.commbank.com.au/digital/home-buying/calculator/home-loan-repayments

lets take a 500k loan over 30 years at 4.5%
repayments 2,540/mo

in the first year you are paying 30,480

22,500 interst
7,980 principle

since 75% of the money you paid is interest, your amount owing is not much different from the previous year, and in the second year you will be paying almost the same figures because your principle goes down so slowly.


here is the important bit

if you paid off double the principle, you effectively avoid paying the whole second years worth of interest

so you pay out a total of $38,000 (22500 interst + 7980 x 2 principle) instead of paying $60,000 (22500 x 2 interst + 7980 x 2 principle)

the benefit to you is that you have paid $8000 to get a benefit of $30,000, so you are getting a profit of almost 400% on any money you put in "on top of your normal payments" and it is 100% risk free.

you will never get a profit like that again in your life - ever.

lets say you worked at a petrol station for $15 an hour on Saturdays to put to your loan this way.
even though you get $15 an hour, due to this enormous benefit, you are effectively getting around $55/hour after the financial advantage comes into play. Would you work at a petrol station for $55/hour? I sure as hell would!

This benefit only occurs at the beginning of a loan when your interest is such a huge percent of your repayments, so I would suggest something like this for the first 3-4 years of a loan to get money any way you can to get the principle down.

It also has the nice benefit of increasing your equity much faster so you can not only pay the whole loan off more than 10 years earlier, but you can also invest in a second property mush sooner than you otherwise would, and/or you could have it positively geared so that renters pay it off later and you can go and put your salary towards other investments.

 

Excellent post. Debt recycling strategies can work with what you are saying to boost the effect of paying off more.

Tax Tip 2: Debt Recycling

 

Bloody great example!

 

Hi, noob question. Do you get the same effect by just parking money in the offset account or do you have to make actual extra repayments off the loan?

 

Yes same benefit by putting money in an offset.

I believe that it is almost always better to put all your money into an offset and to change to interest only loan, so even what would have gone into paying off the principle now goes into the offset. Also usually good to have a separate loan for any other property and have it's own offset, so that if you change one property to be your PPoR you can take all the money out of the IP offset and put it into the PPoR offset so that as much of the interest as possible is deductible (depends also on the different interest rates), and change it around if you ever move and want to make another one your PPoR. Other people here would be able to explain this further (or search for posts by @Terry_w. He has posted a gazillion awesome articles).

But this is getting off point - yes offset works the same way.

 

This is so important, and probably needs a sticky thread by itself somewhere...
Also, this interest money you saved from doing the above is payed off by after tax money meaning you'd have to earn say 20K + 5K(at average 25% tax rate) to repay 20k of interest so that return also ads up by your average tax rate.