Forum Replies Created
True Jamie. But at least with the offset there he could always pump the money in the offset into the mortgage if it was never going to become an investment property, and then redraw it out later.
Open the offset account asap. It provides the best flexibility.
Yes Terry is very knowledgeable and he’ll be able to help you out. It would be a crying to shame to waste the inheritance and hopefully you can invest it wisely from here on.
As a general rule, new properties are not good ‘investments’ because you are paying retail price for a product. Do you see people who shop at Myer making money by on-selling the products they bought? Of course not. Developers make money by buying land cheap, building for cheaper than what you can build for, and charging you retail price for both land and building. Not that that’s a bad thing – but as long as you aware of it.
The private town planner would be the right person to talk to. Council will always give you the most conservative, unprofitable answer since a lot of them are ex-librarians with no idea how to make money. A private town planner knows the State Planning Framework etc like the back of his hand and will be able to help you maximise the use of the land, whether council likes it or not. Let’s not forget that if the proposal goes to the tribunal it is no longer a council decision.
Definitely not 60 days for an SMSF loan – there are so many potential issues due to the complexity of the setup. 90 days, at a minimum.
Speak to as many people as possible. You don’t have to follow the advice of every single person but by talking to people you get a better idea of what you are comfortable with and how you should go about your own business.
Agreed Richard. I think it’s taking a turn for the worse.
You are dealing with two different entities here. The Bank and the State Government. The bank lends you money to buy the property, and honestly they don’t care whether you use the property for living in or for renting it out, as long as they are happy you can service the loan. The State Govt, however, does care and you need to demonstrate that you have lived in the property for 6 months within the first year of owning it. If you get caught they will clawback the FHOG and impose some penalties. Will they find out? I don’t know.
What’s the developer building next door? If it would devalue your property I would suggest selling. If, however, it’s just a few units which gives you precedent for your own future development then potentially keep it. You can ask him for compensation to use your property during construction – I don’t know what rate to charge though.
Pay As You Go Witholding Variation. http://www.ato.gov.au/individuals/content.aspx?doc=/content/00188348.htm
Hi panno24,
Why are you purchasing with a friend? Don’t try and overcomplicate things with a structure at an early stage as it can hamper your ability to borrow money (banks don’t like complex things). Have you spoken to a broker?
Eric, talk to a broker ASAP to structure your finances properly. It looks like a dog’s breakfast to me.
Hi Vas87 – you can certainly afford to borrow some money. As Jamie said it’s hard to say exactly how much – best to talk to a broker about what you can do from here.
A commercial property is not necessarily worth less than a residential property. It’s just that they are valued differently. Commercial properties are valued by the rental that they are (or expected to) achieve, divided by a yield rate. This yield rate varies from 6-8% depending on the property.
With residential, the property is valued on the basis of comparable sales only and not on yield. So if your expected rental from the medical suites is not that much higher than renting out the place as a purely residential house, you may actually get a lower value.
As mattsta identified, it depends on your figures. If the rental from the medical suites is much, much higher then it’s something I would definitely consider – keeping in mind to keep the place looking like a house in case you change your mind/tenants leave in the future.
Yes check your zoning. In some zones you need a permit to use your property as a medical suites/consulting rooms, while in others it’s not allowed at all. Check with your local council at the very start.
Just be wary though of how banks value these type of properties. Make sure – and I can’t stress this enough – that you keep the property looking like a house!!! Don’t make it look like an office building! Otherwise it will be valued purely as a commercial property! If the property looks like a house, a property valuer will value it as such, but deduct the cost of restoring the property to be a house again (putting in showers, kitchens etc). This gives you a far better result than 100% commercial – plus medical suites are very, very specialised if they’re purposely built so try and avoid it so you don’t destroy value.
Maria – check the back of the Australian Property Investor magazine. All the suburb data is there although I think it’s unreliable because property has so many micro-markets.
Where are you looking? Suburb? Price range?
You can actually get up to 85% with a lo-doc loan, you are not limited to just 80%.
Maria all that information will be in the back pages of the Australian Property Investor magazine.
