I have an IP in Gunn, Darwin that is not defence housing. Quite a few defence housing properties in this suburb.

 Whilst I initially thought Defence Housing was not a good deal due to high management fees-was 16.6% pa including gst as opposed to about 8.8% gst incl.  for a private property.

However the big plus is you receive rent for defence housing whether it is occupaied by tenants or not. With a gap in vacancy on my private rental over Xmas (which equated to 2 months) defence housing would have been a better proposition.

I understand defence housing repaint inside the property at the end of the 15 year lease period as well. 

Only problem with defence housing is its harder to sell as it only attracts investors (and only those investors who believe in the defence housing concept).

What about using a Pty Limited company to purchase an IP?

Does this avoid the National Consumer Credit Protection Act requirements?

What are advantages/disadvantages of an IP held in a Pty Limited company?

For a 75% lvr no doc, non impaired borrower, clean CRA,  sydney residential what interest rate am I looking at?

Why is that statement a fact?????

Landlord puts entire block of units on market to sell for several million $. Has builders, valuers, etc running around the building with tape measures etc for weeks (giving an uneasy feeling to tenants particularly one lot of tenants that only recently moved in)

Real estate agent decides to show the better units to propsective buyers (of which tenant's unit is one as he has recently painted the unit) . Tenant agrees to inspection. Shifty couple with sfa chance of forking out $3m inspect (along with lots of others with no ability to purchase) all traipsing through those units open for inspection (with only 2 agents supervising). Shifty couple (when unsupervised) steal whatever they can from units open for inspection…including money, prescription glasses etc). Agent claims on insurance and reimburses but tenant needs to waste time buying new glasses, replacing missing items.   

craigsed,

my RHG loan was variable. I would stay with RHG if their variable rates were in line with other lenders but have to incur 2% ERF's to change lenders as their rates are considerably out of line with bank lending rates.

Where RHG's rate is 7.88% other lenders are around 5.2% I am being screwed. Their variable rates went up higher than most other banks (at the start they were lower than the banks) and have not fallen by as much as other lenders…they are not passing on all or at times even most of RBA rate cuts. At the same time RHG are reporting profit results that exceed RAMS prospectus forecasts (a part of which would be income from Early Repayment Fees as disgruntled borrowers finance away from them).

RHG have also varied their discharge fees after the loan contract was signed..from $225 to $625. They have done this as the contract says they can vary  these fees at their discretion. Most loan contracts have similar clauses.

I see at p.49 Fin Review today that RHG itself is being held over a barrel by its lenders and I don't have much sympathy:-

"…RHG says its being "put over a barrel" by the provider of a $750m debt facility"

One of RHG's arguments in NSW Supreme court over the debt contract is that… "indemnity amounts and interest being calculated by Elektra are not in "good faith and in a commercially reasonable manner"…

To discharge their mortgage (yesterday) and in addition to up to 2% Early Repayment Fees they also charged me legals $295 and a discharge fee of $695. My variable interest rate has now fallen from 7.88% with RHG to 5.29% with new lender (RAMS). There was also a small amount of cash out as property value had increased (even where moving from RHG 85% lvr loan to RAMS 80% lvr loan).

The discharge fee in my case was $695 despite being stated as $295 in my loan contract. Person in RHG discharge section  stated contract permits us to change our fees at any time. I asked how was I notified of the change..answer we advertised this in the Australian and we would have written to you and given you a letter advising of increased discharge fee.

I asked could they send me a copy of the letter to me. They said it was a proforma letter which won't have your address on it.

Am tempted to buy 100 RHG shares and attend their next AGM to ask a few questions. Financial press reported that their profitibaliity at the moment is exceeding original RAMS propsectus forecasts despite them not writing any new business and having a very low shareprice. Why?…probably due to them screwing clients with their higher rates and subtanital ERF income.

Its all short termism by RHG…this time next year they may be left with only problem borrowers who can't satisfy other lenders of their ability to service a refinanced loan. Which will mean falling profits. Their loans in arrears are already higher than a lot of bank lenders. The directors deserve a big whack of karma for the way they have treated their borrowers.. I suspect they will get it too.

When I did a news search on RHG and interest rates in the last few weeks this is all I came up with. No mention of interest rate cuts yet.

http://www.brokernews.com.au/contents/news/32105/details.aspx

Hi petit homme,

yes RHG and RAMS are separate companies.

RAMS administer RHG loans (out of same offices at Homebush Bay Drive, Rhodes NSW).

Westpac are the credit provider for RAMS but not RHG.

I have both a RAMS loan and an RHG loan (and am no great fan of RHG)

RAMS corresponodence to me sometimes has a contact number which if you call will be the telephone line (recorded message..if you want * press A etc for RHG). Annoys me when I call RAMS number to be answered by RHG. Also I don't like the recorded message for both RAMS and RHG.

I reckon after 3 years non competition period (since former RAMS became RHG) RAMS will simply acquire RHG and maybe funding costs for RHG clients will fall. Would make sense for RAMS as they already provide admin and are presumably using the same systems for both entities (how to acquire a whole heap of new clients who are currently paying high interest rates and woudl eb grateful to be transferred across to a lender funded by Westpac) .

Ajax 

Am thinking a unit I bought last year might soon be cashflow positive.

Purchased for $172k now rents for $280/wk, loan of $146k at 8.48%.

It takes a lot for a property to be cah flow positive when I factor in body corporate levies (fixed adn sinking fund) of $2800 p.a., council rates, landlord insurance, managing agetns commission. A still out of pocket by $2.5k pa.

I don't think buying then revaluing hoping for capital gain is the way to go.

Buying ahead of further interest rate cuts (and possible increases in rent) so that cashflow improves could be.