Hi,this is this first time I’ve done this,even though I’ve been recieving newsletter a few months now.Here goes…
My home is in Ellenbrook,WA(5×2).I was told I could get $200,000 if I sold and I owe $100,00 to bank.A friend of mine has a property in Bassendean,WA.It’s a big long block which has 3 home on it,my friend,her mum and one at the rear which they both own.The mum wants to sell her share,so it’s up for $220,000.My friend dosen’t want to sell for at least 3-4yrs.I was thinking if I used $55,000 equity from my home and have a 1/4 share in the property,live in it and rent my house.I don’t know if it’s a good decision or not,can anyone give any imput.
Regards,LisaUnless you have a personal reason for moving you might find it more tax efective to borrow 110% against the new property, secured by the old one, and rent that one. That means staying where you are.
Whether you will get the finance depends on the numbers which you haven’t provided.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Unless you have a personal reason for moving you might find it more tax efective to borrow 110% against the new property, secured by the old one, and rent that one. That means staying where you are.Whether you will get the finance depends on the numbers which you haven’t provided.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I have 4 children at home,I’m on a pension, recieve family allowance and maintence.It works out to about $1300pf.My youngest has allergies bad,the worst to pine trees,which surrounds Ellenbrook.So I have to move for her health.
I’m open to any other suggestions, I thought it would be good to be able to use the equity so I can get ahead.Lisa
“My youngest has allergies bad,the worst to pine trees,which surrounds Ellenbrook.So I have to move for her health.”
Just as an aside, you can get desensitized for allergies. If this is the only reason for your move, you may wish to consult your doctor about this possibility. Desensitization can provide a ‘cure’ for allergies. You could then use your equity to invest solely for financial reasons.
Regards,
Si
Hi Mrsspud5,
Welcome to the forum. An interesting conundrum!
Some questions for you:
Does the 1/4 share entitle you to live in the third home, or would you have to make some rental adjustment to your friends Mum?How much rent would you be able to charge for your existing home?
How marketable do you think the 1/4 share would be in the future?
Cheers
Croccothanks si & crocco,
I’ll look into the allergy issue more,thanks.
As to crocco’s input,wow,theres food for thought.I have only been thinking about this since christmas night,so I haven’t looked into any of this,although I’m sure I’d have to pay some rent to my friend.For my home,I can rent it between $200-$220.My mortgage repayment is $162,but I’m paying $175pw.I don’t know about how marketable my share would be in the future,how do I find out?Regards,
LisaSome of my friends have suggested that I sell my home and use the profit to buy another but I don’t work(well not for a wage)and even with $100,000 I wouldn’t be able to get a loan.Is this correct?
Lisa
Hi
Obtaining treament for the allergy issue is important and obviously may allow you to remain in your current home.
You are building up good equity there.
My thoughts are with the proposed “share” property.
The dwellings are on (1) title ??
Is subdivision possible to seperate titles??
Are the three homes “building approved” on the one property?
What is the valuation of the entire property & each seperate entity? What value $ variances apply if avail on seperate titles??
As with Crocodiles point above you need to assess the future worth of the property.Finally, if you do decide to move there would be several “other” possibly more suitable properties that are soley “yours” non shared, at perhaps a lower cost and more suitable for your family needs. Just because you know about this property doesnt mean its the right one for you.
Regards
The 3 properties have separate titles,and have been approved,4×2 b&t.the 3rd,at the back of the others is on the market for $220.I must admit I thought it a bit high as I ahve a 5×2,3b/r are double size,1 regular and 1size in between the two.I was told,by a r/e agent I would get about $200 because it only has a single carport.
Should I sell my home and use my equity(approx $100)to use as deposit on another property?I just don’t know what to do,or if I can do it[
]
Lisamrsspud5
A friend of mine has a property in Bassendean,WA.It’s a big long block which has 3 home on it,my friend,her mum and one at the rear which they both own.The mum wants to sell her share,so it’s up for $220,000.My friend dosen’t want to sell for at least 3-4yrs.I was thinking if I used $55,000 equity from my home and have a 1/4 share in the property
Finding it hard to follow this..?
Is it..
1 block ( with the three properties and seperate titles?)
You are looking at purchasing the mothers half share in the 3rd house ?
for 220K ?
Or buy the Mum’s house(house1) and her share in the 3rd house(house3) ?Where do you get the 1/4 share ??
I’d say get in touch with Simon- mortgagehunter and give him all the figures and details, the selling later issue also needs to be addressed, you may not want to sell later but your friends may, think of any financial issues then also.
Going into property with friends can sometimes become an issue, you definetly want to get mortgage and legal advice for this deal if you’re considering it.
Ellenbrook has a lot going for it in the future also.so i’d expect reasonable capital growth there.
Every now and again i suffer from Hayfever from the Pine tree flowers, and i sympathize with you, didn’t realise you could get ‘desensetized’ either ! check it out..
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
Buying a 1/4 share in a property will be tough.
I am allergic myself. I was tested and found to be allergic to about nine different allergens inc cockroaches, horses, cats, grasses etc etc
I went thru the desensitising program which was a course of injections over a year. Subcutaneous only so not too painful.
It didn’t work for me.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Sorry for confusion, I hadn’t slept. Its the 3rd home they are joint owners and are renting out to tenants.A 1/4 of $220,000 would be $55,000.My friend would borrow the rest. I don’t want sell home in Ellenbrook,as it will be close to the town centre when it is completed. Maybe I should buy ip there also.Went to a home open today within 10mins of being open aprox 8-10 cars had pulled up. spoke to a few people that were just looking for homes with sml gardens & min maintence, to buy or rent.I will contact simon.
As to needles I don’t think my 11yr daughter old wouldn’t cope with that, but I’ll still look into it.
Thanks so much, everyone has helped heaps.
LisaHi Lisa,
Someone else has already brought up the problem of only owing a 1/4 share.
My thoughts are :
1. What happens if you friend doesn’t want to sell in a few years time ?
2. It will be very difficult to sell a 1/4 share if ever you wanted (or were forced by circumstances ) to sell.
3. The interest on the $ 55,000 you need to borrow (to buy your 1/4 interest in the new place) will that not cause a problem as it will be more than the rebate (or discount) you will be entitled to because of your 1/4 ownership ?
[You will be required to pay market rental (less a rebate of 1/4 representing your share of rental proceeds)].
Yes, I know you will be receiving say $ 200 per week rent from your present house. But ………, that is only provided you have a tenant in the place !! Sometimes a house may be empty.
And, in any event, you still have a $ 100,000 mortgage on your present home. The interest will be eating up all or most of the rent you will be receiving.
I would suggest you seriously consider buying a house all by yourself so as to avoid any future problems.
You tell us that you’ve got already a $ 100,000 loan. That lender may be prepared to provide you a bridging loan which would enable you to buy the new place and provide you with time to find a buyer for your present home.
All the same, you will be up for two mortgages until your present house is sold.
The alternative would be to find a buyer for your present house and another house for you to buy all at the same time.
Difficult but …………. worth the trouble as you will avoid having two mortgages all at the same time. And probably your only way to proceed.
I note also that even if your new house is purchased for the same amount as you are selling your present house for there will be a shortfall nevertheless because of selling expenses, legal costs and stampduty for the new dwelling you are purchasing. Have you considered that ?
You could also just rent out your place and rent a suitable house yourself. That solution too will cause problems if you don’t have a tenant for your present house at some stage (which means that you would be paying rent and not have rental coming in to cover your interest payment.
All in all a difficult situation to be caught in.
If you MUST own a house together with somebody else let it be an investment proposition where there is at least a written agreement in place which sets out the rules between the partners (for example that you will sell the property by so and so date etc).
In your situation (being on a pension) the only possibility I can see for you making money out of real estate is to sell your present house and buy another house all at the same time but ……… look for a house to buy with a large backyard (preferably a corner place) hoping or expecting that at one time or another the property can be sold as a development site.
It isn’t a very nice situation to be in if one doesn’t have some money in reserve just for those occasions where something goes wrong.
Also, I fear that increasing your present loan would be a difficult thing to achieve on your present income.
One’s greed or desperation (or some unscrupulous broker pushing you) may well make you enter into a loan with a higher interest than the mainstream lenders (i.e. the banks) would charge and, again, in your present situation I can only see that a possible overcommitment may cause problems later on.
Another possible solution would be to buy a house in a different area where the prices are lower than what your present house is worth.
You may not like that but at least it may solve your child’s health problem.
No-one can really do more than make some suggestions but ultimately the decision (and possible consequences) will be yours.
I wish you well as there is a lot to consider.
Pisces133
]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
