Forum Replies Created
I have never know CBA/Colonial to give out a copy of their valuation[angry2]. Think it is the result of litigation whereby it was found that they were in no way compelled to disclose details of the valuation, as it is for their purposes only and shouldn’t be relied on by anyone else (more complex than that, but a very basic version!!).
Whereas there are plenty of lender who are more than happy to disclose valuations (and if you’re very lucky you might get your hands on a copy)[biggrin].
Cheers
AlanaBeen a few postings regarding Darwin over the last few months – my experience is not good – not really any capital growth to speak of in last 5-6 years for the two properties I’ve been involved in (one inner city apartment and one house in good loc 10kms from city) – negetive cashflow properties. Darwin also has a very high vacancy rate.
Lots of talk of Darwin going off due to gas/railway, but been saying that for years – my experience only as I know there are people keen to invest there and is still opportunity for +ve cashflow properties.
Good luck!!!
I’ve had an IP in Darwin for 5 years – capital growth has been hopeless compared to other regions – good opportunities for positive cashflow though as rents are high!!!
Friends have owned an inner city townhouse for past 8 years and hasn’t increased in value one cent!!! (where’s that old doubles every 7 years theory gone!?!?!)
They keep saying prices will start to move with hype of the railway/possible gas contracts, but they have been saying that for the past few years!!! My thoughts are that Darwin has been too overprices for too long and it’s just starting to correct now with prices staying stagnant.
So good opportunity for positive cashflow properties, but I’d say a bit risky if it’s capital growth you’re chasing!!!
I’m in a similar position to you, however looked into the trust structures just before my last purchase, and ended up buying number 3 in the name of the trust. So better late than neva to set it up for future purchases, and can also then assess whether it’s worth the expense to transfer the existing properties to the trust.
I spent an hour with a good accountant and was well worth every cent.
Cheers
By the way, ended up with a Discretionary Unit Trust with a Family Trust as one of the beneficiaries, but really need to get advice from an accountant as to what’s best for your circumstances cause gets quite complicated.
with the last few loans I’ve got the bank has told me when applying that if I want to keep the rate as at my application date, then I can pay a rate fixing fee, otherwise I would get the rate as at the date of the loan is drawndown – not sure if all banks operate this way…..but assume that without an agreement to fix the rate, then it would be what the standard rate is when the loan is drawdown.
Cheers.
Pretty much impossible I would have thought – apart from a few exceptions (family court orders/ppor transfer to joint ownership with spouse in certain states), any time you transfer an interest in land you cop stamp duty, even if you are not actually purchasing and are “gifting” property from one person to another.
In this case, you are actually purchasing their interest so wouldn’t imagine would be any way around it – unless there’s something in NSW that’s different to the norm.
Cheers
If purchasing negetively geared properties, a trust is still very beneficial, so not just for positive cashflow properties – can still get the tax benefit if set up right!!!
Cheers
ooops, just re-read your message and see that you’re not looking to invest for 12 months….please disregard my “keen as mustard” ideas.
Cheers
You should be able to refinance up to 90% but would have to pay Lender’s Mortgage Insurance. Apparently if you repay the loan within 12 months you can get some of this LMI back – so if you’re keen as mustard and want to get in, then that might be worth looking at. Then get your property revalued in 12 months and if you’ve got enough equity you can refinance then and get a refund of some of your LMI.
I’m from Perth also and have been lucky enough to experience fantastic growth in the past 12 months so would have been worth getting in like that then…..but never know what the future holds!?!?!
In relation to cross collatorisation – what’s the downside of this??? I have seen a few people mention to try and avoid this, but never seen a reason why…anyone!?!?!?
My advice would be DON’T LISTEN TO THE REAL ESTATE AGENT and do your own homework to try and establish value, rental return etc.
I can’t believe the things we have been told by agents over the years in order to try and make a sale (sorry to all those honest agents out there…unfortunately my experiences have been pretty much all bad!!)
Cheers.
The ATO site has a great booklet you can download on rental properties that goes through the list of what you can/can’t claim – very user friendly and easy to follow!!!
Cheers.
The ownership structure is generally just indicated on the Transfer of Land when you buy it – there are two structures:
Joint tenants – which means you own it jointly in equal shares and on the death of one party the survivor will be the sole owner; and
Tenants in common – where you indicate the percentage owned by each person (i.e. 1/2, 1/3 etc etc) and upon the death of one party their interest is transferred in accordance with their wishes.
If you’re using the property as security for the loan, then I don’t think it would be possible to borrow seperately – both owners have to sign any mortgage document (and therefore the loan contract and/or guarantee depending on how you set it up!!).
Mmmm, having said that….I wonder if you could both have individual loans and each go guarantor for eachother’s loan and that might work…dunno if a bank would like that setup!?!?!
If you set up another legal entity using a trust and/or company, there would probably be a way around it, but a bit more complex and costly and would be something a solicitor and/or good accountant would be able to advise you on.
Mmm, just rambling…not sure if any of that helps!!!
Cheers.
The DHA properties are definitely overpriced due to the sale/leaseback arrangements.
If you buy a house yourself that meets their criteria, you can actually have them lease it off you under the same arrangements without having to pay the inflated purchase price!!!
Better option if it’s the leaseback that you’re interested in – not guaranteed I suppose, just an option to explore!!
Cheers!!!
I think the term ‘hybrid’ in relation to trusts just means a trust that emcompasses more than one type of trust (i.e. if you amend a Unit Trust which is fixed in nature to make it discretionary, then you’ve made a Discretionary Unit Trust, which can also be called a hybrid trust cause it is a combination of two different types of trusts). That’s my understanding of it anyway – hope that makes sense.
The two main types of trusts for these purposes would be:
(A) Family/Discretionary Trust; and
(
Unit Trust (which has fixed unit entitlements and is not generally discretionary).As far as advantages/disadvantages, there are so many ways to set these trusts up and so many different reasons as to why you’d have what structure – so sit down with a good accountant who can advise you on the best structure for your circumstances.
Cheers
In relation to the trust issues, I have set up a discretionary unit trust for my properties that are negetively geared and still get the personal tax benefits – asset protection not an issue for me, but significant tax advantages with properties being owned by trust – see a good accountant if this type of stucture interests you cause it can be achieved and in some cases can be well worth the stamp duty you have to pay to transfer them to the trust.
Cheers!!
Have been investing in property for a few years, and only recently (thanks partly to this site) realised the importance of having the right structure.
Have ended up with a Discretionary Unit Trust (Hybrid Trust) as it appeared to be the most appropriate structure for our requirements, but the type of structure you have depends on lots of issues, so really need to get advice from a good accountant.
In our case, it was well worth the $150/hr to see a good accountant to explain the pro’s and con’s – best money we’ve ever spent and only wish I had have done before we bought the first IP.
Cheers!!!
Hi Red,
We have just set up a Discretionary Unit Trust (Hybrid Trust) in which the individual/unit holder borrows the money and the Trust owns the property. The Trust can then distribute the income to the unit holder who can then offset the loss incurred from the loan against the income received from the Trust.
From what I know, a loss can’t be distributed by a Trust (only offset against gains of the Trust), so with the above scenario the loss is incurred by the individual/unit holder and not the trust.
Cheers
I’ve just been through a similar process, which resulted in the following set up –
* Discretionary Unit Trust owning the properties * Loans taken out personally (with Trustee of Unit Trust as Guarantor – lending requirement)
* One of the Unit Holders is Family TrustMy understanding of how this works is that because losses can’t be distributed from a trust (can only be offset against gains of the trust) – when negetive gearing this system allows the trust to distribute the income to you, which you can then offset against the interest on the loan.
Then, when you sell the properties and/or they become +ve, the income can then be distributed through the Family Trust to the lowest income earner.Mmmmm, hope that makes sense!!!!!
We briefly discussed the issue of a company but in our circumstances there wasn’t any real need for a company and it didn’t provide the same benefits for us – although I presume it would provide more asset protection.
I’m no expert, but hope that helps – although everyone was careful to tell me that it totally depends on your personal situation as to what is the best structure, so sourcing a good accountant is the best way to go.
Cheers!!!
I had a similar problem a few years ago….the joys of it.
My insurance paid for up to 6 weeks rent (if the tenants left before the expiration of the tenancy agreement and only up to the expiration of the tenancy agreement) and didn’t cover any vacancy following tenancy expiring.
It also covered any damage caused by the tenant (i.e. if they damaged the carpet and walls/paint, then it was claimable!!), but otherwise it wasn’t an insurance issue!!
Hope this helps – although it will depend on the terms of your policy and in particular what your entitled to when you only had a week by week agreement.
Good luck with it – it can be a nightmare getting these type of insurance claims through!!!
Thanks for the advice guys!!!
It is a secure complex in one of the best streets in South Perth with UCP – just one of the older complexes.
It is unique in that there are only very few complexes in South Perth that have ground floor apartments that have river/city views.
Perth is well behind Melbourne/Sydney in the apartment stakes, and still well behind in the price stakes too which is handy for us West Aussies (I’m actually a Melbournian originally but too expensive for me there at the moment!!!).
Already have 2 other investment properties and we have decided to take the plunge and diversify and give the apartment a go so here’s hoping!!!!
Unit Trust (which has fixed unit entitlements and is not generally discretionary).
