I ouldn’t want people in there without a tenancy agreement. Even though it’s sublet everyone should be on the agreement.
As you said- if the tenants moved out you don’t have much of a leg to stand on if the granny flat people stay.

So do the house tenants pay the full rent and get the extra money off the granny flat? Or is it 2 seperate amounts for each?

• This reply was modified 10 years, 6 months ago by  Catalyst.

How do you pay the credit card? If you are paying it out of the LOC it is contaminated and you will have difficulty claiming interest. Say for example you were claiming the interest then pulled money out to buy a car then put it back in, that amount is now no longer deductible.

I have a personal account that wages go into. I transact all personal accounts through that. I don’t keep much money in it. I don’t have offsets ATM as my loans are all fixed. Once that ends I’ll get an offset to park extra cash.

I have a seperate account that all my rents go into and all IP payments go out of. I actually like that as it has gone from where I used to have to top it up to it now gaining money each month now that I’m CF+. :-)) It’s easy for the accountant also.

You don’t need an offest for every seperate property. That will mess with your head. You could just set one up. Or have one personal one and one IP one. But don’t mingle them. That’s where taxation nightmares begin. If you are ever auditted it’s good to have clear divisions.

• This reply was modified 10 years, 6 months ago by  Catalyst.

I don’t have a property in North Tamworth but I’ve not had a problem with my Albury one. Had one tenant that moved out as they bought elsewhere. This one has been in since then. Never hear from him. Condition reports are great.

West Albury has some pockets where real Estate agents won'[t list properties for rtent so check that out before purchasing anywhere.

Of course there are lots of housing sommission areas but some are OK.

I have a property there in North Albury. It’s cash flow positive but hasn’t gone up in price in the last 4 years. Waiting. I’d like to offload it.

Rajs- Are they ALL cross collaterized or do you mean they are all with the same lender? They are not the same thing.

Are all properties listed on all loans as collateral?

Yes. The advantage is that you can put the rent up when you like (given the approriate notice of course).

Yes it’s best to have extra funds in an offset. But you don’t say which, if any, you will be living in. That makes a difference to what is deductible and what isn’t.

I”m a bit confused by your description.

Yes of course you can do it subject to council approval but to do it legally would be very expensive because of the large joining area.
I’m talking NSW (not sure about other states) but you need to put a fire rated wall between the 2 dwellings. On concrete you go from the concrete floor up to the roof (through the gyprock). With flooboards you need to go from the ground (dig into th dirt).

eljay1 wrote:

We have 6 IPs bought over the last few years, minimum yield 8% up to 10% +. All are PI mortgages, 3 are paid for and I’m hoping to finish paying for number 4 this year. The properties are modest, most expensive is $200 but the rest around $130k. The 3 paid for return a net of approx. $2800 pm. We have around $760k equity in the IPs and debt of approx. $430k.

These figures are confusing to me.
You said your properties are less than $200K mark and that you are netting $2800 a month from 3. That’s CLEARING $933 per property. Is that correct? $218 a week clear, after rates, insurance, property management etc? That’s a pretty impressive yield.

Are they all in the one state? What is your plan regarding land tax?

I am surprised you are paying them off. I know you say it’s not much difference but it limits your possibilities in the future.
Do you own a PPOR. If you want to buy on or upgrade in the future you will have a non deductable debt.
If you put excess funds in an offset (which results in the same interest as paying it down) then you can withdraw thet extra money at any time and still have all your debt as deductable debt. When you pay doen a loan the money now belongs to the bank. If you want more you have to ask. By having it in offsets you have cash available any time you want it without being at the mercy of the banks.

What is your ext strategy?

I wouldn’t think it would be advantagious.

Are you going to pay for them all to list it on the internet??

Why would someone devote time to your property when someone else could sell it after they’;ve done all the work? I didn’t think people did that any more.

You need to know what your property is worth then decide which agent is working for you. There are agents (shock horror) who tell you that you’ll get a great price. But beware, after a few weeks they tell you the market has dropped or you need to revise your expectations to meet the market. Then your property goes stale. People start thinking “why did they drop the price, what’s wrong with it” etc etc.

I’ve seen it happen. It’s not easy picking an agent. Ask around. Personal recommendation is good but be aware that most people sell 1-2 houses in their lifetime so might not know the difference.
Start with looking at their adds on RE.com. Are the photos proffessional, house plans? good, bad, non existent? Wording? I’ve seen some TERRIBLE adds. A friend listed his and it said “situated on a main road” Blimey I’d stop reading right there. Sure it was a busy road but why state a negative. And there was no mention of the built in wardrobes. The NEW kitchen said “refurbished” kitchen. No mention of the great location.
Anyway you get my drift.
It’s a HUGE decision that can cost you $1,000’s. Good luck.