Yes, generally they are stress tested at a higher rate.

There are some commercial products which are good in that they can disregard the rest of your financial picture which if you have significant existing debts can allow you to grow a portfolio considerably. I’ve written about this here:…[Read more]

I’d rather avoid managed apartmnets/complexes like the plague. In general you’ll forfeit any/any reasonable chance at capital growth, hence why the yields are higher than norm. Likewise income growth over time can be stifled.

There’s very good reason why lenders don’t like to allow people to borrow for these ‘investments’, they’re generally duds…[Read more]

Lenders have always stress tested new debt being applied for – which is currently hovering between 6.5-8.5% stress tested rates between the lenders. The big kicker is with existing debt which has seen the dramatic shifts in borrowing capacity. Quite a few lenders would previously treat existing debt repayments at the actual amount paid, however…[Read more]

Generally they will want to see two years history of dividends being received evidenced via tax returns. Some lenders will also cap the amount of dividend income yield – deeming it only at a marginal amount.

Few options, but generally dividends aren’t big serviceability buffs compared to residential property rents or paying down non deductible debt.

If he legitimately makes $30k/yr net profit before tax in the business and have tax returns showing him receive this consistently, they may be eligible for a full doc loan. BAS/GST registration is not a requirement of full doc loans, unless they’re claiming they’re earning above the GST threshold but not registered. ;)

Best they speak with a…[Read more]

Not from Tasmania but have a few of our clients looking around there/who have bought there right now.

Not that big a place at all, but Invermay tops the list for most popular in terms of clients buying there consistently. Strong yields on aestethically quite ‘pretty’ timber clad homes around there.

For a non investment property you will struggle to find a professional who will be able to tell you the best bang for buck renovation ideas – as it’s generally either style or pure profit.

It is fairly simple to establish however – spend the money on what you like updating the property whilst also looking at what else is selling in the area. You…[Read more]

Frankston has definitely had a lot of ongoing interest for a number of years now – with a major run up over the last 24 months.

The trend follows most of metro Melbourne – I would be looking at similar priced arounds in the Western suburbs to compare against, as Frankston does have a bit of variability in medians. (there was a slight drop in the…[Read more]

So long as you fit the overall potential lenders policies, there is likely potentially options for you to get a new 30 year loan with 5-10 years IO which will give you that last leg of breathing space to have further rental growth, debt erosion and potentially sell some down to give you a more effective cash flow position.

Hi Pollyanna,

This is something that many investment focussed brokers are working on daily to assist clients from falling off a cliff with their effective cash flow.

The main issue itself isn’t so much interest only renewals – but that the lenders borrowing capacities for investors in the last 18 months have dropped significantly, so those who…[Read more]

You will definitely want to avoid cross collateralisation (using one property to secure anothers debt) – as this is poor structuring and can be avoided so you don’t put yourself at unnecessary risk.

Paying cash for the investment wouldn’t be the best move, you would likely want to finance the purchase to at least 80% LVR, then retain the…[Read more]

Poor advice, poor structure (cross collateralised), poor results. Your banker has really done a dousy on you.

As noted above, the ATO looks at the purpose of the funds, not what they’re attached to. Simply shuffling the money around will not increase deductions, but will potentially pollute your loans and make your ability to claim deductions…[Read more]

Tony has hit the nail on the head – flipping in Australia is seldom profitable, and is a step backwards from a renovation-revaluation strategy which allows you to grow your net worth quicker without losing a significant amount of profit each time to fees, taxes etc. I’ve written about this previously here: http://www.precisionfunding.com.au/11366/

Tony has hit the nail on the head – flipping in Australia is seldom profitable, and is a step backwards from a renovation-revaluation strategy which allows you to grow your net worth quicker without losing a significant amount of profit each time to fees, taxes etc. I’ve written about this previously here: http://www.precisionfunding.com.au/11366/

Hey Symo,

To be honest, I’d probably avoid all of the options you’ve suggested. Apartments in Adelaide aren’t up for a good track record of growth over the coming years with the considerable supply coming on stifling any chance of growth.

We actually ran a webinar speaking about the Adelaide market, statistics etc last last year – here’s a vid…[Read more]

You speak with an investment focused finance strategist PRIOR to looking at any properties or making any offers.

That’s their job, you don’t go in blind and you don’t DIY if you want to have results which don’t have you chewing your nails and pulling your hair out for no benefit.

You’ll find that it won’t be in the ballmark however – as FYI some of those variables can be tweaked slightly between lenders which will change your capacity by upwards of 2-300%. Basically trying to just do an excel function calculation is going to give you something which is guaranteed to be unreliable to the point of useless.

In reality Gus it’s best to speak with a broker so they can run your figures through the exact lender calculators. Richard’s given you a rough example of one of the types of calculators some lenders use – but in reality most lenders calculators will have 40-100 variables.

Anything else is going to be inaccurate to the point of useless.

It won’t increase your borrowing capacity – it’ll more often than not *decrease* your borrowing capacity as lenders will then exclude any taxation benefits from the investment debt contained within the structure.

Not disclosing that you’re a guarantor for other loans is nonsense and a great way to get in trouble with the lender if caught.