Steve & Sharon…Hi

To explain my suggestions I’ll use approx. figures

If it was my scenario I would do the folowimg…

Your home at …$350,000 …Refinance with a two in one type loan to a total of 80% = $280,000.

The $280k is split in two…$130k P&I loan …and
$150k Line of Credit for Investment, but NOT at the moment. I would get the loan in place now as the LOC won’t cost you anything to have it in place. You of course will have access to it when required. In the meantime focus on reducing the P&I “home loan” as no tax advantages here.

If you are to target properties at $150-$200,000
You are in a position to Invest in 3 IP’s certainly 2IP’s. Say IP at $173,000 ..Dep req. 20%
plus costs about $12,000 Total req. = $$47,000

You draw the $47,000 from your LOC. You could do it three times. Ensure that each IP is a
“Stand Alone” deal for conveniance in refinancing down the track..also easier should you sell one day. Don’t let the lender take other property as security…they will, if you let them.

Initially, I would have the 80% loans at Interest Only until such time your $130,000 P&I is paid out.

Why do I say get ready..but not now….the current R/E Mkt reminds me of Oct’87 in the Stock Mkt. I am confident that you will buy todays IP at 20% better,1n 12-18 months……

Just my two bobs worth.

Wishing you both well.

Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]

Daisii and Mel..

What it may come down to is if the property was bought as Joint Tenants( husband/wife) or
if as Tenants in Common ( couple of mates, biz partners) then perhaps it will be treated differently as Tenants in Common would not be considered as a “Love and Affection” transfer.

Legal matter..

Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]

G’day Daisii…

You need to check with a Solicitor, a phone call would do it. I am sure that I’m right in saying that it is referred to asa “Love and Affection” transfer, and as such, no Stamp duty is payable.
Maybe a small Govt. charge for registration.

Cheers

Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]

G’day Hot Rod…

As stated in the previous reply you have……. it does tend to give the Lenders more security than is required. This obviously reduces your available equity for another purchase.

You certainly make it harder for yourself if two or more loans are cross collateralised.

For example if the properties are “stand alone” deals then it is much easier to sell one of them.
This is not the case if they are cross
collateralised. Also easier to borrow additional funds. There are plenty of advantages in “stand alone” deals and if the LVR is at or below 80% they should not be cross collateralised.

Don’t kid yourself…If you default on an investment property the Lender can Sell up the property in question and if there is any shortfall they will take any other property you have including your own home.

Stand alone deals you have better control of your properties and Finances.

Cheers

Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]

G’day Sooshie…

You another nightowl too?

My sentiments exactly re the Rent-a-Room. As you may have gathered in some of my posts I am a little cautious(Not Negative) of the current R/E boom…this is Year Six. The ladies idea has huge merit and is just what I am looking to do in Armidale/Wagga/Richmiond ..NSW. I am considering offering Free Accom to a Single Mum in exchange for general housekeeping.

She will have the option of making a few extra Dollars in offering meals . My plan is for a 4Br Ensuite for her..and rent the other 3 rooms for $100 night (3x$33). The Housekeeper will be my live in Property Manager.
I got the idea after looking at a guest house and figured I could do the same, but with Five-Ten properties.

And I thought I had that idea to myself[!]

G’night from me…

Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]

Paul….

I didn’t realise it was you … sorry.

That’s right Paul…wait until I respond to your first post….then come back with more facts.[!]

Get your Dad in on the act. Otherwise sell it direct to a developer once you have educated yourself as to it’s true worth.

G’night

Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]

G’day….

A good Accountant in Canberra is Anthony Curtis at Weston Creek…Coolamon Court…in phone book.

“Tony Curtis”…just like the actor!

Tell him Bill sent you…

Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]

G’day Stevod…

Your property management fees should look something like this…

On a rental of $120 pw x 52 = $6,240 Gross

1 weeks letting fee……..$120
Advertising…………….$ 50
Bank/admin fees…………$ 60
7% Mgt fee (51 weeks) $430

Total………………….$660 pa = 10.5% year1

If Tenant stay on…then no extra letting fee or Adverts. 7% of $6,552( 5% increase) ie $126 pw
= $458 + $60 Admin….
While tenant remains…Annual cost to you $518pa
and that equates to 7.9% of Gross rent received.

If it’s as you say, with add ons…inspection fees etc and you are paying 20-25% get another Agent. Are you sure your figures are accurate?

You can’t blame the Agent for the rates/maint.

Cheers

Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]