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B.Deros
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@b.deros
Join Date: 2003
Post Count: 34
October 4, 2003 - 2:09 pm
Just more on melbear’s ‘tenants in common’.
If there are two names on a contract then this is the legal structure automatically used.
According to the ATO both parties are deemed to own 50% of the property and receive 50% of the income whether they have some other arrangement or not.
B.Deros
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@b.deros
Join Date: 2003
Post Count: 34
October 4, 2003 - 11:52 am
I think you may have missed management fees – assuming you are planning to use an agent. This is usually 7.5 – 8.5%.
Repairs are impossible to predict so as previous poster mentioned your positive cashflow could easily turn negative.
Another point I discovered in analysing my own investments…
Buying units under $100K makes it harder to achieve +ve cashflow since your rates and body corporate fees are fairly fixed and not in proportion to your rental income.
B.Deros
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@b.deros
Join Date: 2003
Post Count: 34
May 3, 2003 - 2:15 am
Thanks Quentin,
I have chatted to deppro already and they sounded quite good. I’ll mention the Woodward case and see how on the ball they are
Ben
B.Deros
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@b.deros
Join Date: 2003
Post Count: 34
May 2, 2003 - 7:44 am
The last time I thought about this I concluded the main benefit of these companies was in actually finding the right property due to their “superior market knowledge” (take that with a grain of salt) – all the other benefits are really conveniences that you will pay for.
BTW, I still like going to seminars because it fuels my thinking and you get to really question these guys. They will love trying to win you over to their way of thinking, especially in front of the audience, so it’s truly a free learning experience
B.Deros
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@b.deros
Join Date: 2003
Post Count: 34
May 2, 2003 - 7:32 am
I talked to a whole bunch in the area whilst I was shopping around buying and formed my impressions that way.
I went with the most professional agents, not the ones who went the most out of their way to impress me – that kind of attention is short-lived.
So far I have been very happy with the decision. Especially happy considering I live interstate and have to rely on the agent for firsthand information in many situations.
B.Deros
Participant
@b.deros
Join Date: 2003
Post Count: 34
May 2, 2003 - 7:29 am
Call up the ATO. They will send you the Guide to Capital Gains Tax booklet for free.
B.Deros
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@b.deros
Join Date: 2003
Post Count: 34
May 2, 2003 - 7:27 am
Some developers just want to keep their builder mates busy when the housing economy is quiet
B.Deros
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@b.deros
Join Date: 2003
Post Count: 34
May 2, 2003 - 7:23 am
quote:
I think it depends on where the property is. We have property in warmer states, one with and one without a pool. We got about $40 less rent a week for the one with no pool compaired to a rental in the same street with pool.
It does depend on your strategy a little but in general what you would gain in rent you more than lose in the extra cost of servicing the pool i.e. body corporate fees.
But I am a no frills kind of guy when it comes to property. It’s not for me to live in after all, it’s for my tenants
Ben
B.Deros
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@b.deros
Join Date: 2003
Post Count: 34
May 2, 2003 - 2:30 am
quote:
Hi Ben
You could refinance now, but beware of exit fees and Application fees for the new loans. If you just want to use the extra equity you could just approach your current bank asking for an increase. Also beware that the bank valuation may not come in as high as you had hoped.
What was the LVR when you purchased? You can generally only refinance to 90% of the value (tho one lender will do 95% -with slightly higher rates). How much you can get out will depend on serviceability as well.
Are the properties x-collaterlised? If not you could refinace one at a time?
what interest rate are you paying now?
Terryw
(Mortgage Broker)
Terryw
[email protected]
Hi Terry,
The properties are each financed 95% LVR + mortgage insurance so effectively 97%. This would be more risky if all the circumstances weren’t so ripe for capital growth. I have 5 yr fixed rate loans at about 7%.
Not sure what you mean by ‘x-collaterlised’. Do you mean the loans are somehow linked? They are all with the same lender but not linked apart from that.
I guess there’s no chance of a valuation coming back LESS than what it was at the time of my loan approval, but from what I understand valuation methods vary wildly, so recent growth in the area may not be reflected in a particular valuation.
rgds,
Ben
B.Deros
Participant
@b.deros
Join Date: 2003
Post Count: 34
April 24, 2003 - 7:09 am
I think there’s a book on creativerealestate.com.au by Barry Black that shows how he managed 179 properties with 1 x A4 folder!
B.Deros
Participant
@b.deros
Join Date: 2003
Post Count: 34
April 24, 2003 - 7:06 am
My take on this is based on the fact I am young, have no dependants and live in the currently maxed out market of Sydney. There is no way I can get the same returns on a home here than I can on an investment in say Brisbane.
e.g. rent income pm in Brissie = $950
– rent paid in sydney = $150
– mortgage payments = $800
$0
e.g. rent income pm in Sydney = $1400
– rent paid in sydney = $0
– mortgage payments = $2400
-$1000
My estimates are based on buying a similar home in a similar suburb in each city (and renting out the excess rooms)
It’s a no brainer. Buying a home in Sydney is actually destroying my cash flow, and for basically no benefit. I might be losing $1000 a month or more in mortgage payments.
Now, I also get a lifestyle and loan servicibility benefit by being in Sydney, e.g. I can earn a higher income, support more properties and live in the suburb of my choice and still be ahead. That extra $1000 can be used to service several more properties.
From my POV (and for my circumstances) rent is not dead money at all! It’s part of the investment!