[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 29, 2011 - 8:25 am

Hi Alaric,

I will repeat myself, at the risk of sounding like a broken record.  It is currently mortgaged with Westpac, on residential rate at 80% LVR, interest only.  I am paying 7.09%

I have spoken with my Personal Banker, and he affirmed that Westpac is prepared to assist my buyers on residential loan.  Can we now, please everyone, put the interest rate down to rest?  Please.   It is ON RESIDENTIAL LOAN.  If you give me your email  address, I will scan the loan contract and email it to you.

Currently, too, the rent has another 10% of upward movement because I only increased rent once in three years.   In fact, the tenants are ready to sign new leases for the new owners.  I have advised them that rent is likely to go up 10% and they are happy to stay regardless.  Do the math, my friend.

Thank you.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 29, 2011 - 8:12 am

Oh Richard,

I struggled, too.  But I couldn't bear the thought no one has answered her.  But it sure does seem like too brave a thing to do for a newbie.  They breed them tough these days.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 28, 2011 - 8:15 pm

Hi jelovea2003,

At the risk of being called a fool, I will attempt to answer the question, the equity contribution is the three townhouses you will lose to the vendor and the builder and the $240,000 payment after completion. Why?  Because it is what you contributed to make the project happen.  I think,

Sweetheart, I assume that the $500K is to be paid to the vendor at the end of the construction of the townhouses.  I arrived at this because you said you have no money out-right.  Please correct me if I'm wrong.

If this is the case, I have to assume the property is currently unencumbered, meaning there is no mortgage on it.   The reason for the assumption is simple:  once the house is knocked down, the vendor loses his/her residence. If there is still a mortgage,  the vendors will have to rent for 12 months and pay their mortgage too, while they wait for their townhouse to be constructed.  I don't think anyone in their right mind will agree to this.

I am assuming the builder is happy to pay for all the costs of DA as well, not just the construction costs. 

I am assuming that your only real contribution is bringing everyone to the table and getting everyone to sign.

If any of these assumption is wrong, then you are walking into a landmine.

If all is good on paper, and everyone signs and understand what risks they are undertaking, then you have stumbled upon the gold mine of the century.   For your young age, you are to be commended.

If any of  you guys think I'm wrong, I'm happy to be corrected.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 28, 2011 - 8:38 am

Hi Jamie,

Don't know much about Canberra RE market so I'm happy to take your word for it.    But as for me, the CG would not tempt me on balance. 

That's just me. 

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 28, 2011 - 7:07 am

Hi all,

Lots and lots of mortgagee in possession in Rhodes.  If you're keen to buy there, homersyd, you might bag a bargain at the auctions.

Take care,

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 28, 2011 - 5:14 am

Hi Desilucky,

Read you private message.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 27, 2011 - 7:22 pm

Hi newbies,

I've said it before and I'll say it again and I stand by it:

Personally, I would never buy off the plan or buy brand new apartments.  I will buy, if I have to, one that's at least three years old.  Depreciation schedule is still healthy, hence there's still that hefty tax deductions; but remove myself from the pains of discovering construction building kinks.  In this case, discovering that the surrounds stink.

I really reckon, in three years time, if the building is badly constructed it would show by this time.  If walls were going to crack, it would have already cracked.  If buildings are badly made, all owners are required to put money in, called sinking funds.  Research the issues surrounding REGIS TOWER.  It will frighten the living daylight out of you.

The owners of REGIS TOWER have been mainly high powered professionals, many are silks (barristers, etc), and they still can't bail themselves out of this quagmire they found themselves in. 

Brand new apartment will always be more expensive, precisely because of the depreciation.  The price remains stagnant for a few years before capital gains kicks in.

If you are buying mainly for the depreciation – you're buying for the wrong reasons.  There are better ways to minimise tax.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 27, 2011 - 7:50 am

Desilucky,

You made me laugh…. that was so cute.

I totally agree with you.  When the mortgage payment is the same as the rent, why pay the landlord's mortgage?  Doesn't make sense.  I'm on your corner.  Remind me not to be on your wrong side. 

Bless you.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 27, 2011 - 7:44 am

Hi Larry,

You're a good student.  You've done well.  Over analysing can also be a deal breaker.  It causes paralysis.  Whatever you do, there is bound to be an amount of risk.

The important thing is base your decision on sound investment strategy and always, always have an EXIT STRATEGY.

Bless you.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 27, 2011 - 6:46 am

Hi Jasno77,

I have an advice which would be contrary to what others believe – but in the end, the decision is up to you.

I don't advice buying off the plan.  I also don't advice buying a brand new apartment unit.  I could advice buying one that's at least three years old because the building construction kinks would have already surfaced by then.  If the building is badly made, trust me, it would show by its 3rd year.  If the walls would crack, it would have already cracked by then.

Teething problems of new developments may not be worth the pain.  Buying a three year old unit will still offer great depreciation benefit (if you're after some hefty tax deductions).  So get the gain without the pain.

At any rate, I personally wouldn't invest in units after a sour experience.  Again, that's just me. 

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 27, 2011 - 6:36 am

Hi didi1981,

Firstly, you ought to be congratulated for acquiring a "practically" debt free house.  $100K loan against an $800K asset is marvelous, someone so young, too.

Consider me your Agony Aunt, my advice will have nothing to do with finance but with life's practicalities.  You can say I've been there and done that.  I have four kids, one young adult, two teenagers and a tweener.  Three sons and a "terrorist."  You have three kids, wow, I can really relate. 

You will be going back to Uni next year, I assume hubby works full-time.  Your hands are full.  Your life is busy in more ways than one.  Changing address CAN cause much upheaval and you may find yourself at a "tipping point.". 

You are young, there is no need to hurry.  Unless your current house is a shoe box and may in fact cause one of you to become homicidal, stay put for now.  Wait till you finish Uni, get your new employment and then move.  If you could buy another property without selling this present home, then you're on your way towards becoming a property investor.

This is my experience talking – it would be foolish to suggest it could become yours.  But conventional wisdom dictates that too much upheaval at any one time is best avoided.

Regardless, enjoy the family and each lovely moment it brings.

Take care.

Angelina

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 27, 2011 - 6:07 am

Hi desilucky,

Once you've done all the research, and has made up your mind, and you're 100% comfortable with it, go for it.

Don't ask other people's opinion as if you still need affirmation.  What are you going to do if someone here pipes up and said, "No, it's not a good place to invest."?  Are you going to back out and throw everything you've learned out the window? 

The strategy, hon, is to do all the research and then back it up.  If you are still asking for other people's opinion, then something is not quite right.

Blacktown is a great suburb, there's a lot of promise.  Personally I won't buy there, only because like JacM, it's outside of my investing parameter.  For no other derogatory reason.

Good luck and take good care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 26, 2011 - 9:40 pm

Hi giovi 2003,

The capital gains tax is not applicable on the sale of owner occupier.  This is the rule of thumb — owner occupiers can not claim tax deductions on the holding costs (e.g. repairs and maintenance and interest payments) but is CGT free.  Rental properties enjoy tax deductible benefits on holding costs but is CGT liable.

The stamp duty for the purchase will depend on which state you live in.  Google "stamp duty + name of state"  example "Stamp duty NSW,  The calculators will come up.  Every info you need can be googled.

If you can improve your home for the price of stamp duty then renovate and increase living space and equity instead.

Angel
I hope this helps.

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 26, 2011 - 7:52 am

Hi Larry,

Depreciation works best for high income earners, if you are not in the high tax bracket, this is not a suitable strategy.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 26, 2011 - 7:48 am

Michael,

Can you please email me information on the property you're intending to sell?

[email protected]

I'm not promising anything but I may consider it. 

Thanks.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 26, 2011 - 7:41 am

Larry,

What's "best" is what works for you "best".  Our financial circumstances are all different,  we also have different comfort level and risks tolerance.

Your best bet and to find out more from Nathan how he does things.  I'm pretty sure he'd be willing to mentor you.

If you live in Sydney, you can catch up with me as I'm a retiree.  I can show you how I did it and how I do things.  My means and methods may not suit you but will help you find your niche.

Take care.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 26, 2011 - 7:29 am

You're welcome, hon.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 26, 2011 - 7:26 am

Hi Madchen,

Learning about rental vacancy rates is immaterial.  It is all about choosing the right property in the right location.  As an investor, my philosophy is location, location, location.

Even if there are 100 houses vacant at one time, and only 10 people looking for accommodation, those 10 people will still choose the house that is in the right location.  If your IP is situated near school, hospital, shops, transport link, you will not be without tenants for long.

You need to be looking at population drivers.  Are people shifting in or baling out?  Are young people staying or are they leaving? 

These information are more relevant  than trying to find out what the vacancy rate is.

I hope this helps.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 25, 2011 - 9:10 pm

Hi all,

I'm reading all posts in this forum and my head hurts now. 

I so want to know more but the brain can only take so much in.

A friend is going to the US soon, I might tag along if she doesn't mind.

I'm still stuck in the wilderness.  Not like me to be so ambivalent.  Age has a lot to do with it, I'm sure.

You guys rock.  Thanks for sharing.

Angel

[angelinsydneyParticipant@angelinsydneyJoin Date: 2011Post Count: 270]

April 25, 2011 - 8:08 am

Hi Ferdinand,

All I can say is "Just do it."

Good luck.

Angel