Bikelife finance

[Escapee..]

Bit off topic but yesterday I walked into Coricraft to have a look at new couches.

 

Repayment Terms of 36 months @ 26% interest rate.

SUCK ME SIDEWAYS

[Mongoose!]

 

Two points:

 

• The math of "stretching the interest out as far as possible" works for one simple reason: I'm not paying the interest, my tenants are.
• In the scenario I mentioned, even if I didn't have tenants and lived in both properties, it would still make sense to continue transferring cash from the bond with the lower interest rate to the one with the higher rate..

Just be careful not to claim unproductive interest on your tax return. This Means by drawing money from your bond and spend it on bikes and stuff resulting a higher outstanding capital amount with higher interest component on your rental loss...lol

[LazyTrailRider]

As soon as it becomes a "second bond" you must show that it is for home improvements.

 

As long as it is part of the access bond it does not attract attention

 

 

 

at least, that is what my accountant told me .....

 

This has nothing to do with tax and all to do with your finance agreement with the bank.

 

• If you're borrowing additional capital specifically to make structural additions to the property (and thus to increase the value of the bank's asset), the bank needs to be sure that the value of the asset continues to offer sufficient security to the capital they've lent you, so the capital can only be used for the intended purpose. This assumes that the value of the property hasn't already increased "naturally" since the inception of the bond, so this scenario is most likely only true if the additional borrowing is done very soon after inception.
• If 5 years down the line from the original bond you register a 2nd bond for R500k against the property and can do so because the value of the property has increased by at least R500k, you can do whatever you want with this money, it's effectively simply a secured loan.
• No one cares what you do with money already covered by the value of the property. You could blow it on strippers and cocaine, the bank and SARS wouldn't bat an eyelid (although SAPS will obviously have an issue with the cocaine).

 

Things only go sideways if you finance toys, or use bonds to offset taxes.

 

Such idiotic things to try and justify!

 

I'm assuming that you're joking? Just checking...

[ChrisF]

Martin the interest bearing portion of your rental units bond is tax deductible to your rental income, as is a few other expenses.

 

 

Thus SARS can and do keep an eye on a rental units bond, especially a second bond.

 

 

Playing with the money in your access bond has thus far not been an issue with SARS

 

 

 

Your second bond with the bank is a different topic, in terms of affordability etc ....

 

 

Using money from a bond to pay for other items is yet another topic .....

 

 

 

Been using my bond as a "savings account" for the last 25 years, so I DO understand pro's and cons of doing this.

 

For the tax part of a rental unit .. best speak to an accountant.

[LazyTrailRider]

For the tax part of a rental unit .. best speak to an accountant.

 

Chris, my statement that it's not about the tax but about the finance agreement was a reply to a very specific part of what you said (which you were vague with), not a sweeping statement about the tax implications of this entire story.

 

I have more than one accountant on my payroll and I'm married to an attorney, so I don't need 25 years' worth of experience to understand how this works.

 

Nothing more to say on this topic. Have a great Friday everyone!

[Hairy]

Chris, my statement that it's not about the tax but about the finance agreement was a reply to a very specific part of what you said (which you were vague with), not a sweeping statement about the tax implications of this entire story.

 

I have more than one accountant on my payroll and I'm married to an attorney, so I don't need 25 years' worth of experience to understand how this works.

 

Nothing more to say on this topic. Have a great Friday everyone!

All I want to say is that you must certainly never win an argument at home, and even if you think you might have won an argument, you really have not and will still be "paying for it" later on 

[ChrisF]

and tomorrow is FRIDAY .... then the thread goes sideways ....   

 

and it is Friday ... and it is going sideways ....  

[Odinson]

I really doubt that a bunch of uneducated workers financed their Sworks commuters through BikeLife....

Did you just assume my education?!

[DIPSLICK]

Did you just assume my education?!

Well now we must know;)

[andydude]

Did you just assume my education?!

Well now we must know;)

We don't need no education

We don't need no thought control

No dark sarcasm in the classroom

Teachers leave them kids alone

Hey! Teachers! Leave them kids alone

All in all it's just another brick in the wall

All in all you're just another brick in the wall

[gtr1]

Yeah, because the ZAR took a beating.

The opposite could also happen; Zuma gets recalled tomorrow, and Cyril is the new prez. The markets react and the ZAR strengthens to 11.00 R/USD. Come 2019 and the DA wins, and we're back to 6.00 R/USD and a 2019 Camber S-works costs R40k.

Where have you ever seen bike prices come down when the exchange rate improves ???

[NotSoBigBen]

Where have you ever seen bike prices come down when the exchange rate improves ???

Our anything else for that matter ...

 

Sent from my LG-D958 using Tapatalk

[andydude]

Where have you ever seen bike prices come down when the exchange rate improves ???

CWC

[BSG]

Well I've got 2 payments left on a bike that I had to sell ????

 

Keep the rubber on the gravel!

[Heel Drop]

Bit off topic but yesterday I walked into Coricraft to have a look at new couches.

 

Repayment Terms of 36 months @ 26% interest rate.

SUCK ME SIDEWAYS

but you need the couch to show of your new bike when you buy it and want to show it off on the hub - so GO BUY THAT COUCH man dont hold back

[Hairy]

but you need the couch to show of your new bike when you buy it and want to show it off on the hub - so GO BUY THAT COUCH man dont hold back

your bicycle must always cost more than your couch .... and you must also spend more time on your bicycle than you do on the couch