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What does your research tell you? Has it had steady growth? did it peak then flatline? What's happening in the area?
I know people who thought their properties were not performing over 5-7 years and sold them in 2000 only to miss out on 100% gain in the next 3 years.
Remember sell and buy costs. Is the extra cost justifiable? I'm not one of the "never ever sell" brigade but if I was to sell it would have to be because I can do much better with my money elsewhere.
First can you clarify_ You said you want to find a job. Then you said you are on $60,000pa??
You said you just got 2 and a half months payout but you only have $5,000 (or was it a very poor paying job?)
If you have just started working you will find it very difficult to get a home. AND you have no money. I don't see how buying your own home is possible in the near future. In your situation an investment property would be financially easier (when you can afford it).
But as you said. You need to start somewhere. Good on you for trying to put a plan in place.I'd consider keep sharing to enable you to save like crazy. Get more stability on the job front. Read some investment books (Somers, Lomas)
In a year see whether you are in a position to borrow.Hi Richard. I was also told the St George one (with many sub accounts) was the same.
If this is the case why does the contract for each loan only mention the purchased property used as collateral?
Deposits taken out of LOC. Each loan is for 80% of IP. How is that crossed? Or is that a different setup?
Yes. I do that for regionals. Most agents are pretty good.
You definitely need to do a pre settlement inspection JUST before settlement.
Things can change so quickly.Even before you buy always pays to do a last minute check.
I turned up to inspect a property once (dept housing). Every wall was smashed. Agent said it wasn't that bad a week earlier.
Guess that didn't fetch much at auction (unless some person viewed it the week before when it only had a few holes).
Thanks Terry. I wasn't thinking and was confusing LOC with offset.
Thanks for clarifying. Don't want to confuse anyone.
as others have said not much profit in selling.
Actually you will be worse off if you sell and buy again. Can't see the point unless the property you have chosen is not likely to get CG.
$20K – selling fees ($6k) gives you $14k. How much did it cost you to buy the property? $2K solicitor? Loan establishment fees, exit fees ($1K+) You'll be lucky to have $10K in your hand.
Not enough to even pay the stamp duty on the next house.Either move in with mum and dad or get a boarder (as suggested). But factor in the capital gains implications if you declare the boarder, however you can rent it for 6 years (if you move out) with no capital gains payable under the 6 year rule.
BTW do NOT pay down the loan. Use an offset account.
Do you realise that the strata managers actually work for YOU (the owners of the units)?
They don't make decisions about rises in rates. YOU DO.
Everyone who owns a unit is entitled to vote at the AGM on fees. Why weren't you there if you care about the fees charged?
I suggest you attend the AGM and have a say. Even get on the executive committee if you don't like the way things are run. I have sacked strata managers before BUT I attended meetings and knew what was going on.
First stop paying down the principal. Keep putting extra into the offset account. That way it's your money to do with it what you want.
You don't need to put your home on the line to invest. You have at least $50K. Paying down your mortgage will give you a sound sleep but will not move you any further on the investment path.
You can use the offset account to pay deposit, legals etc. Take out a separate loan for an IP ( if that's your chosen investment strategy) for 80%. That way your PPOR is not secured against it.
You need to do the figures to work out how a CF- property will affect your living standard.
I would get a LOC on the investment property. There's nearly $100K available at 80% lend.
Let the interest for the investment property come out of that while you pay your cash into the credit cards.
After that is paid out decide whether you can afford another IP (based on the cash flow, your income etc). Use the LOC as the deposit, legals, stamp duty etc and get a new loan for 80% borrow on the new IP.
Be careful though not to contaminate the LOC by using some for the IP interest and some for your PPOR reno.
You might like to read this.
Electricity in your name at that address, showing usage. If your bill is' say' $10 a quarter, obviously you aren't living there.
Car insurance as garaged at that address etc. Drivers license at that address etc.
Just having your address on a PO box I don't think will be enough if you are questioned. Thousands have had to pay it back because they were not actually living in the property. Just saying you live there is not enough.
Yes you can own an investment property (if acquired after 2000) but I think you only get the FHOG not the stamp duty concession.
If you have lived in it then for that time it was a PPOR so you don't get anything.
Yes but you can also claim all costs associated with the unit. EG rates, management fees, insurance, interest etc.
Just before you move back in you can repair any problems (paint etc) and claim that against the rent. Do it in the same tax year.
Ok so you've decided Brisbane will be doing well in 12 months time.
But what of the off the plan purchase. I it good value? how does it compare to similar sized properties in the same area? If you overpay it will take years to get to market value even if prices do go up around you. Whats the expected rent? How will your cash flow be? Have you factored in more interest rate rises?Lots of DD to do. Just hoping you've done more than just look at expected (hoping for) growth.
Ring up the Real Estate agent and tell him you are looking for a place to rent around $300 and in the area of your place.
Or ring specifically about your place. THAT may give you the answer. Maybe they're too busy to show people.
Hi sometimes banks do a desktop valuation so may not even come out. It's up to you to provide why it's worth mare than the average.
As others said, speak to RE Agents to see what's in demand from a sell and a rental point of view.
Work out what you intend to replace, fix, etc.I only do reno's where equity has increased 3-1. That is if I spend $1 the equity has to increase $3. Plus I eed increased rent.
Otherwise what's the point?Last reno cost $15K. Increased equity $60K. But a LOT of sweat equity in there.
Lots of variables.
Are you going to live in the house first? Otherwise it's an investment and you may be liable for CGT.
No-one can tell you how much you'll make when no-one knows the costs involved. What about interest paid? etc. Too many unknown facts.If it is your PPOR. End price – agent 2% (roughly) – land and build costs – interest etc = profit.
If it's not your PPOR then pay tax on the profit. OR wait 12 months and only pay tax on 50% of the profit.
This is why people are encouraged NOT to pay down their PPOR but to get an offset loan instead.
I didn't know that when I started either but luckily we have stayed in our PPOR for a long time and won't use it as an IP.
I joined the first one I bought. After a few years I dropped out as the people running it were great and I had joined anothers by this time and had metings for others to attend (only the yearly ones).
The one I joined had major issues. BC manager was hopeless so I arranged to have their contract terminated and appointed a new manager. I'm still on that one but it is easy now. Few Emails to approve work etc. That's it.
I think have a look, go to the first few meetings. If everything is flowing smoothly let it be. Can be a lot of work.
