Forum Replies Created
Hey Pysch,
From your own words, I think you’ll be OK
the repayments i can handle ….You are on your way then – the tenant is helping you to purchase this IP. Just keep in mind that the Interest will reduce as you bring down the amount owing.
Did you have a complete month of Rent before the first mortgage payment? Are you receiving Tax deductions on a weekly basis to offset the cost (ITWV)? Are you buying with IO or P&I? All of these can have a marked effect on the final outcome. If P&I, it would normally take 75% of the term to pay down half of the mortgage owing. That’s how they work.
No matter, just go back to that quote of yours – “the repayments I can handle” – just keep on handling them. Maybe the Bank’s first payment was more than expected – they don’t always take the required amount in the first few weeks, then play “catch-up” with the first payment. If this is so, your later amounts will be less.
Congrats for taking the plunge though; if you need more info, then please provide a bit more of your situation. We may be able to help more,
BennySteve,
First off, I’m NOT a legal adviser so this is all opinion – fair enough?
As I understand it, if you set it up as Joint Tenants, the ownership will be 50/50 – but, on the death of one, the title goes to the surviving member (and this might not suit a couple of friends).
So, tenants in common might be preferable as I believe this might allow you (or your friend) to have their portion to be assigned to another party in the event of their (or your) death.
You said the right words though – seek legal knowledge over the whole deal. BTW, was the North Coast relating to Sydney, or Perth?
Benny
Funny how things go – I heard about “the GC corridor” when I moved into Logan 21 years ago. (Each generation of RE agents must have been schooled on the phrase)
Finally it MIGHT be coming to fruition. Certainly the GC highway is top quality (4 lanes each way, and smooth as a billiard table).
Whether or not this translates into “NOW is a good time to buy” is beyond me. It sounded good back then but 21 years is a long time….
Many “advisers” have been selling into the corridor over the years – how’s everyone doing?
My concern over all that time is the availability of land in and around that whole area. But now time has now passed, and maybe today things really are getting better.
The more land is sold, the less there is to sell. So, sooner or later, there WILL be a land shortage in the corridor – and then anyone holding an acre or 10 will make some serious dough.
Good luck with it all,
Benny
Hi Wylie,
I think philosophical is good !!!!
Anyway, I used to mentally kick myself when I thought about the money we “gave away”. It took a while to stop beating myself up about this and I am much more philosophical nowdaysNot sure if I was double guessing, or what – but our first IP was bought for $48k with rent of $150/week. Guess we didn’t know just how good things were (or how good they would get when interest rates dropped from 17%). Whatever, we sold it as it was costing us to keep it.
Today that same house would be worth $180k – rent probably $200/week.
In hindsight, would I have kept it? Absolutely!!! But then, you don’t know what you don’t know – and we didn’t know how good we had it.
As I said, though, it helps to be philosophical. The money that was released on sale helped to pay for education for our two sons. What’s that worth? And, today, the knowledge gained from such mistakes has helped us to grow our current portfolio – to our benefit.
Stay philosophical,
Benny
Hi Mini,
Onya, girl !!! You said it good. And what if they only need the credit card for 3 months – $250 to borrow $10k sounds pretty good to me,
Benny
Wayne,
No one (including Steve or his associates) asked me, told me, threatened me or intimidated me into writing this post.Care to share what DID lead you to this retraction? Like the others ahead of me, I am bemused, confused
Benny
Yasmina,
This is what I hear from the thread
1.You want the best financial result
2.You want to cut down your cost
3.You don’t want to work so hard.So, from your input, your PPOR is in a good area and it has lots of equity. It is too big for you.
Here is what I would look at doing –
KEEP the house, but rent it – this should bring in $450+ ($500?) per week to offset the P&I loan (and leave you some change – up to $200 per week?) Out of that, you pay rates, maintenance, Insurance, etc and still have something left. This extra amount can help to cover the rent you might need to pay elsewhere.Because it is now an investment, there are Tax deductions applicable too. Some $$ come back to you from that. And you can live away from it for up to 6 years and still resell later without paying CGT
I’d keep your IP (as long as it is in a good area) and let time work its magic.
Then you need to look for somewhere to live – and that is up to you. Will you live in a 2 bdr home somewhere? Will you live with friends? Will you rent a room, rather than a house? A unit? Buy a tent? I dunno – but you will.
If you sell your PPOR, it would release a lot of cash, and allow you to set things up to suit you. That could be useful too. But that is YOUR call. You know better than us just what it is you require.
Good luck with your decision
Benny
Gimme a Skyline any day.
First was a Co. car when I had a permanent job. The good bit was discovering that wife (who has had back problems forever) couldtake a 4 hour drive with NO probs – usually stiff and sore after 1 – 2 hours. So…..
When I became redundant (thanks, dudes – best thing ever !!!) and a contractor, bought wife a Skyline ’88 GXE, 2nd owner with 180k for $4000. I now have a 1990 (also 2nd owner) with 200k on it for $3000.
They go like cut cats, have the steer, air, and comfortable seats (eh, wife). Shame they discontinued the model.
The Jag (my desire) can come when we’re “financially free” – not quite there yet…
Benny
PS One owner cars are great – someone buys “their last new car” when they retire, then 15 – 20 years later, it’s on the market, well-kept, low Kms, and just waiting for the discerning buyer.
Hey Oshen, Dazzling,
How about cutting joytony a bit of slack here.
I checked the link and found the quote on the post was word for word with the link. ie. there was NOTHING left out of Daz’s post – so what the??
Joytony, relax, you’ve done it good !!! I can’t see any problem with what you’ve done here.
And Daz, Oshen, let’s not drive new posters away here for no good reason. Or am I missing something here? Keep in mind that I’m reading this as MOST other posters would read it (you might have some other angle that we are not aware of)
Benny
Hey Dr. X,
Good for you!!! I have a few thoughts about this subject, and here they are in no particular order –
1. An associate has a “sig” that says “Be who you are, and say what you think – for those who matter don’t mind – and those who mind, don’t matter” Worth some thought, yeah?
2. Some say “money is the root of all evil” – but they are mis-quoting the Bible. It is the LOVE of money that is the root of evil.
Now, think about that, and consider whether those WITHOUT money might love it more than those that have it. e.g. If your whole life is spent “waiting on a paycheque” doesn’t this keep MONEY more foremost in your mind than those that have a “sufficient supply” of money? So who is loving money more in those two situations?
Also, in reply to those that seemed to “down” you for giving up your friends to associate with others who “make more money” let me say that everyone continues to grow through life. If part of that growth involves a realisation that some friends are “holding you back” – isn’t finding other friends VALID?
And does that mean that you automatically turn your back on your former friends? Or simply that you spend more time with your newer (more uplifting) friends?
Don’t doubt yourself, Dr. X If others aren’t seeing it your way, hand them a business card and invite them to call you back when they’ve caught up a bit more,
Benny
PasandBec,
Though you have $100k equity, this is on total value of $500k (i.e. 80%) so if you don’t wish to pay LMI I reckon you’re stuck.
But then, you only need $15k as a deposit and costs for a $64k property – can you not use a personal loan or cc to get this? The interest might be a lot higher, but if it’s for a short period why not?
Even LMI for a 90% loan on $64k is not going to be huge. Sounds like you think it’s a deal – is it worth the extra cost of making it happen? With a 90% loan, you only need to find $8500 + LMI cost ($1000 ???) You sound keen on it.
Benny
Len,
Things do not compute. From statements 4 and 8, you appear to have $380k in Equity but in 11. you seem to have only $25k equity.
Something needs correction Is 11. giving correct numbers?
Benny
I’ll have to find a knowledgeable mortgage broker to discuss this further. Where would be a good place to look? Any one know of a good one??Look at the last three replies carefully
Benny
From what I understand it seems to have some good growth prospectsReally??? With 250% growth in the last 2 -3 years, I wouldn’t have been so sure. Maybe I need to call DD too
Benny
Hey Dr. X,
You certainly raised a great topic, and you’ve had a whole bunch of great responses.
Well done. Most of the others have given all of the answers that I could have given, so I’ll just say “Great thread, and similar responses” – one of the best I’ve read here.
Benny
221D is the old name – but I can’t determine what the new name should be. I’ve variously heard of it referred to as ITWV, or 1515. But nothing on the ATO website that I’ve found has added clarification.
Try this:
http://ato.gov.au/businesses/content.asp?doc=/content/17023.htm&page=2#P8_289I’ve found the ATO website is a good cure for insomnia,
Benny
JD,
I think Herb offered some good suggestions there. And TMA’s comment about 100% LVR could be valid too. So combine the two and see what can be done.
1. Do you believe that Spring Hill values will increase in the next 5 years?
2. By how much? Is this more than what you are spending to hold on to it?
3. Could you refinance this property? (see below)
4. The current yield is 5.3% – some landlords in Sydney would kill for this return.
5. I haven’t invested in apartments, so I could be right off the planet.
Refinancing:
I agree with Herb that the current Interest rate is quite high. It could be worth checking whether you can either renegotiate (or refinance) the loan. Even if (as TMA says) the actual value won’t replace the current loan, you may be able to get a normal 80% loan on $240,000, then shop around for a second mortgage for $20 to #30,000 at a higher rate. It may still be lower than your current payments.And, yes, do check on the use of Depreciation to lower the Tax paid, then use the 1515 form (ITWV – used to be 221D) from the ATO to get some more money in your paypacket on a weekly basis. This would help you to “hold” the property, but only if you want to go this way. (See earlier comments).
Good luck with your decision
Benny
Wayne,
You said this
I’ve managed to speak to the broker, and he said that even though the valuer’s may re-value the 4×2, in his experience, he said it’s Westpac’s policy to only work off the 1st valuation…?For what its worth, one of my two successes WAS with a Westpac revaluation. In that situation, the second valuation (13% higher than the first) was accepted by Westpac. So all I can say is that it’s not etched in stone. Or your broker might need a bit more experience? [blink]
Sounds like you’ve found a workable solution for now – good luck,
Benny
It might be too late now, Wayne, but I just had a devilish thought!! How about using your 3bdr house as a “comparable” in your submissions re the value of your 4 bdr?
In the past, I’ve challenged location, size of block, and style of house. WHY would a valuer value a 4bdr as only $5k more value than a 3bdr in a similar situation?
In 1970, this might have been the best you’d get. But today, if a 3bdr is valued at $200k or thereabouts, a similar 4bdr would usually be valued at $20k more – easily!!! If not, WHY NOT?? They usually bring in better rents too. Sometimes way above the % uplift in value.
So go tap your valuer on the shoulder, and put the hard word on them. Can’t hurt, as you’ve lost if you just let it go.
Benny
JenD,
The real estate agent must submit our offer in writing to the vendor, regardless of what (if any) initial deposit we decide to payAs I understand it, a deal is made up of three parts – an offer, a deposit, and an acceptance.
If any of these is missing, I believe you might not have a valid binding contract.
The important part here is “the deposit” – and it can be $1 (but money must change hands). I have bought property with $20 down, remainder on settlement. This “might” vary from state to state, so do check this with your team.
An RE agent might well push for more – they are trying to ensure that you are a valid buyer, and finding out if you CAN AFFORD to buy is part of that negotiation. A decent deposit is one way they attempt to do this. Can’t blame them for trying
Benny
