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Viewing 17 posts - 1 through 17 (of 17 total)
  • Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    May 15, 2008 - 5:24 am

    Hi Kate

    What Richard is trying to get at is if you only pay the interest, then that leaves any spare cash available to service your second loan (if you get one). ie. have a friend who purchased a property for 72k in the early 90's, now worth about 450k at least, he only pays the interest on the property (and it ain't much on 72k), with the spare cash he had, he bought another investment property for 150k a few years later, now worth about 450k also. He worked out that by paying interest only instead of payign his property 1 off then purchasing another, he thinks he is ahead by 300k due to growth. But, this assumes growth, which you should get in the mid long term (and sometimes in the very short term). It all depends on your risk appetite. In your situation, you need to work out if your cash left over after paying the interest on your first loan (as principal will be next to zilch on a 30 year loan), will that cash be enough to cover your second property. I have seen this strategy work very well but also very bad for those new in the game if things go wrong. You nee to work out how much risk you want to take.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    May 14, 2008 - 6:35 am

    Hi Kate

    I am guessing your apartment is your PPOR? If its your PPOR, I always advise trying to pay this off as quick as you can, as the loan is not tax deductable. The bank will look at if you can service the loan. In your case, you have only saved for a deposit, you may be up for mortgage insurance if your LVR is more than 80%. Be wary of trying to service two loans, as you mention most cash goes into paying your apartment. Without knowing all the circumstances, and it seems like you have answered your own question, trying to pay off your first home is a good goal (or at least making a bid dent in it.

    PS. where in Melb you did purchase?

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    February 23, 2008 - 12:28 am

    Thanks everyone. Even though I have a cheque book and have bought at auction before, when I bought at auction and gave the cheque to the agent, the agent could not transfer any funds until I could transfer the 10% of the purchase price into that account on the Monday, so technically, what he held in his hand til late Monday had a face value of zero dollars. But my point relates to buying at an auction with no cheque book, its all good and well saying that if your interested or serious you would have the cheque book or finance sorted, but I was thinking like last week, I drove past a property and it was at auction, now had I purchased, my cheque book was sitting in my office at work, and I couldn't get to it before Monday, now had I purchased, what do I tell the agent, my cheque book is at work and can't get to it before Monday, or an even quicker solution is follow me to the bank on Monday morning, and you will have a bank cheque in your hand or a direct transfer into the trust account.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    February 22, 2008 - 6:47 am
    Dave H wrote:
    Not an expert in this area, but my feeling is that they'll want a cheque, so they may suggest that they follow you back home after the auction so they can collect it on the spot.

    Thanks, but what happends if you don't have a cheque book but have the funds sitting in your account in the bank? (ie. I can make a cheque on the monday but don't have any cheque or cheque book on me)?

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    February 16, 2008 - 4:09 am

    Hi Francis

    I think I know where your talking about, the new development next to Westal station. In terms of yield it should be okay, in terms of growth, it should be slowish until the development finishes, and with the rate of sales over the past three years, I would say it will take another 2 – 3 years before the development is complete. Until this happends, I would suggest you hold onto the property, otherwise its a good development.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    February 13, 2008 - 5:12 am

    Hi Francisl

    I haven't used either of them for property management but I purchased my home from the team at century 21/wilson pride from clarinda. I have to say that these guys would have to be the most ethical real estate agents I can come across, they don't play games. Con is a director there, really takes pride in his office, and Jim was absolutely fantastic, can't speak highly enough. Not sure if this has helped, again, I don't know what they are like on the property management side. As for barry plant oakleigh, which I am sure was HS before the change, when looking at their properties, they didnt return calls and were not very helpful. BTW, what area in Clayton south is your property in (clayton, clarinda or westal side?). What do you think about the current market in the area?

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    February 7, 2008 - 11:35 pm

    Thanks for input everyone, much appreciated.

    Masih, no offence but I am not warming to paying $1m on a docklands apartment. With the amount of activity going on in docklands, there will be an oversupply of stock there for quite a while still. I had a friend who just sold his docklands apartment and made a capital loss of 80k after holding it for 4 years (an off the plan special where he thought he was getting it cheap), and not to mention his interest cost.

    Just to clarify, I am a qualified professional in the financial services industry so understand about depreciation, tax etc. I am leaning towards land with an average house on it I can rent out. Most of you mention units about 350k, but say in the bentleigh area, most blocks with run down houses go for 700k plus, new 2 – 3 bedroom units are 600k plus. Its fine to diversify, but this is entry level in the bentleigh area.

    I would like to minimise tax, and I did mention I am looking at long term, so I am not just in it for the tax gains, but also want growth. Back to my initial question, if blocks in the (again, the bentleigh example) say are going for 700k plus, even on my income, do you think I am over stretching myself?

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
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    February 7, 2008 - 11:05 pm

    Thanks Jon, excellent, you have answered my question, much appreciated.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    February 7, 2008 - 6:04 am

    Thans Jon, but I am getting confused between site coverage and gross floor area, won't this be the same ie. if site coverage is 35% as an example, how can gross floor area by greater than 35%, ie. the building takes up more than 35% of the block?

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    February 7, 2008 - 4:30 am

    any info would be appreciated.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
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    March 30, 2007 - 1:51 am

    thanks Steve, will confirm with my accountant.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
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    March 30, 2007 - 1:51 am

    thanks Steve, will confirm with my accountant.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    March 30, 2007 - 1:51 am

    thanks Steve, will confirm with my accountant.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
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    May 1, 2006 - 1:59 am
    Originally posted by Becky&Gordon:

    Hi,

    We have a clause in the contract that reads,

    “The vendors warrant that all fixed household appliances, electruc light fittings, heaters, air conditioners, and other associated items are in good working order. They further agree not to remove or substitute any of the same, including curtains and drapes, between the time of purchase and settlement and agree to demonstrate such items to the purchasers at or about the date of settlement.”

    As power may not be connected when we inspect the property pre purchase, we can’t be sure electrical items are working. At least we have a come back if upon getting the power connected, some items aren’t working.

    Gordon

    Invest in People for a Prosperous Future!

    Hi, what happends if your buying at auction, can this clause still be added?

    Are dishwashers normally included as a fixture/fitting?
    What about washing machines/dryers?

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    April 28, 2006 - 12:05 am

    Hi YoungInvestor (Steve)

    Ahhh I see, thanks for clearing that up, that makes much more sense. You seem much more mature than your age suggests, most people your age are wasting all their money on cars, lol.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
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    April 27, 2006 - 5:31 am

    Hi Daniel

    Its great your saving for your first home. Try and save as much deposit as you can. The 100k goal seems like a good start. But remember, if your thinking od borrowing 500k, thats $600 interest a week. Are you able to afford this and all the other bills associated with home ownership? Unless you like to be highly geared, make sure you do all your calcs before hand.

    Profile photo of cadancadan
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    @cadan
    Join Date: 2006
    Post Count: 25
    April 27, 2006 - 1:03 am
    Originally posted by YoungInvestor:

    True dat. SIS has been around for ages… wouldn’t mind a progress update from him!! [evo]

    As for me, im 22 – Own 1 ip, now got enough deposit for number 2 and looking every day :)

    As for how i started, save save save!! I saved about two thirds of my pay whilst in the last 2 years of uni working in a call centre, and managed around 40k.

    My short term goal is to have another 2 IP’s by the end of the year, so that’s the focus for now.

    My medium term goal is to have a net worth of $1M by age 28, but I think i’ll change to something more challenging soon. [strum]

    I also have shares to the value of around 10k, but looking to get out as soon as I can avoid CGT – (something about gold, property and shares all rising at once sets off alarm bells for me [upsidedown])

    I earn good money for a 22 y.o as a Business Banker with NAB, and thanks to my job, I have a lot of handy people at my disposal. eg:

    – Solicitors
    – Residential and Commercial Valuers (Buy a coffee every now and then = free valuation [specool])
    – Tradespeople
    – Developers
    – Wealth management specialists
    – Mortgage brokers
    – Real Estate Agents etc etc etc etc

    I didn’t have these guys when I purchased the first IP, but they’ll be a good source of advice from here on in :)

    There’s obviously a lot more detail on how I started in property than what I have just mentioned, so please feel free to ask me any questions you like.

    Thanks,
    Steve.

    ps: I’m in South East Melb if you’re wondering.

    Hi Steve

    An interesting post. I am hoping your right but a net worth of $1m by time your 28 (6 years) seems optimistic. You mention you own an investment property but it seems as though your net worth is only 50k (am I missing something?). I am assuming that your hoping for a large capital growth, but still $1m is a way to go. Don’t get me wrong, I am not having a go at you, just wondering about the figures.

    BTW, I am 30 and in Melb south east suburbs as well.

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