Forum Replies Created
Hi Noami,
Wouldn’t an appropriately selected buyers advocate be able to assist you with finding such a property?Thanks everyoe for your comments, very useful.
Just another quick qestion, if I was going with a single bank, would I do a single application for the total loan amount and then split the accounts, or would it need to be 3 separate applications (i.e. one per property)?
Thanks again.
Catalyst, you say when you replace something, it is seen as an improvement. I am not totally sure on this (happy to proved incorrect) because what if you replace a hot water service because the old one died? That is replacing something but I would expect the whole cost to be claimed in that year?
Thanks Richards, I think you could be spot on about them trying to sell something!
Cheers
Thanks Jamie,
It is a fairly simply equation isn’t it, which is why I don’t think there is much they could tell me that is not very obviously or something I don’t already know!
Cheers
Interested to understand how you know it has a current yield of 10% when there is no mention of what the property is rented for on the ad?
Hi Bullion,
From what I understand, the ‘capital gain’ event will occur when you accept the offer (and sign the contract), and the actual settlement date (when you receive the money) doesn’t impact the capital gains tax calculation.
If you are comfortable with managing the build (or happy to pay someone to do it) then it may be worthwhile, as you mentioned that you are moving home soon and the property would be in an area you would like to live. There would obviosuly be a number of other things to consider prior to going down this path (e.g. time/cost to get plans approved, complete the build, financing etc.)
Regarding the CGT exemption, I believe 12 months is generally the accepted timeframe but this can be less if you can show that the property was clearly your pricipal place of residence. Happy to be corrected on this one.Jamie M wrote:Generally speaking I'm not a huge fan of borrowing money in order to borrow more. Especially for those purchasing for the first time. I think it's important to be able to demonstrate an ability to save – otherwise they could find it tough when it comes to meeting their repayments.Cheers
Jamie
Jamie I agree with you comments entirely but am a little unsure as to the difference between borrowing money via a personal loan and tapping into equity within a property as this will increase the loan amount which is effectively borrowing money isn't it?
Cheers
Hi again guys, thanks for the comments.
Tom, you are right the bank does know about it as their authority was given before the sub-division was finalised.
Richard – the land is unencumbered, are you able to quickly jot down what some of these options would be?
Thanks in advance
Thanks Shahin,
The land is on a separate title, so that is good to hear.
thanks again
One other thing that is worth considering is that the details of the property in the contract, may end up being different to what is built. This exact situation happened to a colleague of mine, who signed a contract for a 55sqm property, but when construction was completed (about 8 months after the advertised completion date) the property he purchased was only 49sqm. This meant the bank wanted to reduce the LVR by 20% meaning he would have to come up with additional 20% of the purchase price to settle.
He is currently trying to contest the contract through his lawyers, but the whole process has been a nightmare.
As Jamie mentions, there should be a lot of information on off the plan purchases that should be considered.
I recall reading a similar post on Mildura on this forum so perhaps if you perform a search you may find some additional information.
From memory, the general consensus on Mildura was mixed with some having good experiences, some not so good (which would be the same as any area). The fact it is a considerable distance from other regional hubs / capital cities was a major detractor.Hi Ashley,
I am currently at the final stages of this process (waiting for Council to approve the proposed section 173) and have to say that this process flow would have saved me a LOT of worry! Knowing the upcoming steps in the process would really help with planning.
Great resource and thanks for sharing!This is a bit of a change of topic but I was also under the impression that GST is only payable if you have entered into the development with 'an aim to make a profit'?
If you were able to show that your original purchase was not with the intent to develop (i.e. you lived in a dwelling for some time, then decided to sub-divide), would GST no longer be payable on the sale price of the new house or vacant land?
ThanksNo one has the rates crystal ball unfortunately. It may be worth considering fix part of your loan/s. That way if rates go down, you feel some of the benefit but if they go up it wont hurt too much because part of the loan is fixed.
Jamie M wrote:For anyone reading this and considering the ANZ 5.8% fixed rate – just letting you know that the offer expires at the end of this month so get your applications in before this date if you've decided this is the way to go.Cheers
Jamie
I have just fixed my ANZ loan with the 5.8% rate. You need to be on their "Breakfree package" (cost of about $395 annually) which I was already so didn't cost me anything to do. They did have the house revalued as part of the process which I thought was a bit unnecessary, given I refinance my loan to them about 2 months ago!
Terryw wrote:very generally.
80% of rental income, and
30% of salary
must be greater than repayments of all loans.Just confirming that it is 30% of gross (before tax) salary
lifestylez wrote:My point here is if I had of let economic factors stop me from buying, I may never have got started and never experienced a good performing asset.Would totally agree with this comment. There will always be someone giving you are reason not to do it (property bubble, interest rates are rising, the tenants will trash the place etc. etc.) but if you complete your due diligence and the numbers stack up, I would say go for it.
I have just recently bought a new IP (settles in Sep) and was able to get it at a discount of about $20k because everyone else was sitting back just waiting.Qlds007 wrote:Look have to say i disagree with the previous coments.I would also make sure the PPOR loan iis interest only at the same time and you should be good to go.
Cheers
Yours in Finance
Richard,
can you please outline why you said you would set up the PPOR with interest only. Given that it is non-deductible debt, isnt it a good move to reduce this? or will the linked offset account be effectively doing this?
thanks,
BlairHi Adam,
I use Somersoft's PIA Personal Professional. It is a program that allows you to key in all the details you mention (price, loan amount, rent, interest rates etc.).
Once all details are included, it will give you the net income/loss the property will generate in years 1, 2, 3 up to year 30.
I have used it a nuimber of times to see if a property is viable and would recommend it.
Blair
