Forum Replies Created
Hi Mike,
Not my forte, but what you wrote sounds good in theory, but the money you borrow is not for investment purposes and the ATO would most likely challenge this. If it was this easy then everyone would be doing this. If I’m wrong then someone please jump in.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Cornel,
Adding value is good but don’t add unnecessary value. A dish washer is an expensive item and may need regular servicing.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Redwing,
If you want to increase by 5 then ask for 10 negotiate down. If 10 then ask for 20. You may want to find out what other similar units/houses are renting for and then decide. You may find a 10-15% increase is fair if the tenant wants a short lease. I still think it’s better to find someone for long term if your plan is buy and hold.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Redwing,
IMHO, I find it easier to put money into a mortgage rather than go around looking for the absolute best possible return. I don’t think it really matters whether the return is 6-8% or 10%. I use the cost of time and effort factor in making quick decisions. My time is valuable and it only takes a simple transfer on the computer to put the 10K into the mortgage. It’s done in a few seconds I get between 6-8% and then I forget about it and move on. If it’s in the right account and I need it again later it’s another few seconds on the computer and it’s done over and forgotten until the next time. If you start chasing for the best possible return how many hours are you going to spend going over shares, LPT’s, PDF’s, etc. How much is yout time worth to you. I’m not involved in shares and it’s not my forte, although I do intend to do Crashy’s course at a later date as part of my investment education.
The choice is yours TIME and EFFORT vs RETURN
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Lynchy,
You will get some help but not all of it. 1-2 hours north or south of Perth. Near the border of Vic just before you get into SA on highway 8. Bay of islands in NZ. Now the rest is up to you.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Redwing,
You virtually answered the question yourself. If you put the 10K on the loan then you effectively get the interest rate you are paying which is more than the interest rate you will receive from an investment account and as your equity increases your return is even much higher.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Yes, i was refering to LI. If the tenant gives 21 days noticed I wouldn’t expect any vacancies longer than 2 days before the next tenant moves in. This is enough time to get the handyman and cleaners to do their jobs before the next tenants move in and who should already be lined up and waiting to move in. Wrong about xmas time it is amazing what some people will do with the extra money ,holiday pay and a 17.5% bonus, they receive. Also it’s the time to move without taking time off work, because they’re already on holiday. It is also possible to get the cleaners and handyman to come in before the tenant leaves. Offer a 10-20% discount on the last week of the tenants agreement to have this done.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Redwing,
This situation may most likely affect your insurance and you may not be covered if anything happens. If the tenant definitely wants this situation then negotiate a higher rent on the grounds that the rent is discounted for long term tenants or the tenant pays 2 months in advance. The tenant asking about this is probably thinking of moving and you may want to advertise privately and see how many people reply just for the exercise. Also you may find someone wanting to sign a long lease and put this in the advertsiement. If you get a good response then you know that if the tenant leaves you shouldn’t have to many problems finding a new one. The PM may have another property ear marked for your tenant and is going to double dip on the situation.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Dave,
Are you able to lower your repayments by putting in some cash and negotiating with the lender for a longer loan term if possible?
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi dglees,
When you find out please let me know.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Azrael,
If there is any doubt at all about being able to finance the situation or repay the loan DON’T cross collateralise. Also you need to put some figures here so it is easier to work out the numbers. If they’re only going to do a 10% deposit then just take out MI and leave the mothers house out of the situation completely. A combined income of 76K is quite good especially if they’re living in their mothers house. If they go ahead with the deal and it is difficult to rent the unit, then rent the mothers house out and move into the unit if it is feasible.
Finally, DON’T DON’T DON’T cross collateralise.
C2
“Is it true the more you owe the more you grow until the banks steps in?”Hi Sue,
The country in case A and B is Japan. Just because something is legal doesn’t mean it is socially acceptable. Socially acceptable seems to take predence over legality in Japan. The child is registered under the mothers name and family registry and where it states father has been left blank. Normally when the father is not named they type in unknown, but in this case it has been left blank and this is a first of its kind.
In the second case the child was either sponsored or on a tourist visa initially to get into Japan.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi dglees
Okay your scholarship is tax free. Your other income is meant to be taxed. Can you tell me the name of the mortgage broker and which bank? I would still be a little careful in regards to what the MB is offering to do. But if they’re able to bend the rules and get away with it then I’m interested.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi dglees,
Can you explain a little more about why you think your additional income is not taxed in Japan whilst you’re studying. This doesn’t sound entirely correct. You should be paying at least 5% or possibly 10% in Japan even if you have a scholarship or receive funding by the Japanese govt or an authorised educational intitution. I would suggest a call (you don’t have to give your name or any private information you don’t want too) to the ATO and explain the type of fund you are using and your situation o/s. There are no problems borrowing from a Foreign bank or an Australian bank in Japan for property in Australia, but if you intend to leave Japan they may ask you too pay out the oustanding balance and then refinance with the same bank in OZ. Also, if the exchange rate changes too much and the ratio of your LVR changes they will ask you to put in enough cash to bring the LVR back to the acceptable limit. Also you may find that the interest rate for o/s borrowing should be about 2.25-3%. 1.6% should be for domestic borrowing in Japan but normally requires a 60% deposit although some banks are now a little more flexible. If you contact Bill he can give you some additional information that may help you.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Kay Henry,
An interesting thought. Also, cash is a thing of the past- equity is cash just waiting for a purpose. Equity is the new cash
I would think that cash is still king. Equity needs to be borrowed and incurs interest. It may be a taxable deduction, but cash incurs no interest and helps create equity.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi J,
Definitely meat pies. A bloody yanky mate of mind got me all excited when he said he bought some Australian pies from a discount shop here. Off I go. 2 Hrs and 100Klm later and what do I find? These strange oblong looking chicken and vegetable things, but they do have Australian beer, wine and TIM TAMS.
Sebastian,
If you go into the ATO they have a simple form for you to fill out, I haven’t done this. After a family dispute with the ATO that cost over 2M, I chose not to pay tax. I know I can’t get away with this for much longer but it was a conscientious objection at the time and I will face the repercussions later.
Terry,
Thanks again, I will be carefull. Also if you borrow money and you stop working in that country, they can ask you to refinance with another institution.C2
“Is it true the more you owe the more you grow until the bank/ATO steps in?”Once again not all people choose to be poor or rich and the CSA doesn’t help at all.
Cooper,
No 3 page debate but some fathers don’t get the opportunity to look into their childrens faces, let alone get any details at all.
When dealing with the CSA the poorer you are the better it is. My mate sends xmas cards birthday cards and any toys he remembers that his kids like to the ex-mother-in-law because he is not allowed to know where the children live and every time they come back to him. When he goes into the CSA with what has been sent back they say there is nothing they can do. His ex even questioned that he had the right to get remarried, let alone have more kids, when he has 3 other kids to support. The best part of all this is the ex is on over 80K and her husband on 70K but his income is not taken into consideration. On top of this before they separated they sold the family home and had about 130K left over which he put into an account for the children. The CSA refused to accept his share as pre payment of CSA obligations and said that it was all a gift from him to the children and wouldn’t be taken into consideration.
C2
“Is it true the more you owe the more you grow until the bank/CSA steps in?”Hi Sunshine,
Your thoughts on these situations and can you guess which country?
A husband decides to freeze his sperm for later on in life. He dies and the wife then has IVF and has a baby. The baby is born 300 days after the death of the (husband). The court decides that the child can not have the husbands name on the birth certificate and is thus fatherless and not entitled to any estate or allowed to be registered under the fathers name or on the father’s family register. The court basis its decision on no proof that the husband wanted the child and that IVF is still not considered socially acceptable.
A couple decide to use a surrogate mother. They travel to another country where everything is done. When the couple go to register the child as a national of their home country the court refuses as the surrogate mother is of a different nationality. This leaves the couple with a child who has a different nationality and is not allowed to be registered on the family register. The court basis its decision on surrogacy is not socially acceptable.
This is all within the last 1-2 months.
Crashy,
That’s between 25K and 50K a year on average. What country?
C2
“Is it true the more you owe the more you grow until the bank steps in?”G’Day Bill,
How long were you in realestate? Buyer Enquiry Range (BER). It’s 3.39am as I post.
C2
“Is it true the more you owe the more you grow until the bank steps in?”Hi Dovie,
My concern is and probably that of the others is that you currently have no cash savings. Even though a property you buy may be +ve cash flow you still need to have funds in reserve for emergencies. This appears to be an area that is often overlooked. If you refinance at a lower rate and borrow money through equity then try to make the total repayments equal to or less than what you are paying now.
If you are in an absolute hurry to buy then consider what possessions you have that you can do without, sell them and maybe used that as your deposit. For example if you own a car worth 30K and it’s free of debt, then down grade to a 10K car and use the 20K as your deposit. This allows you to buy without refinancing and risking your home.
C2
“Is it true the more you owe the more you grow until the bank steps in?”
