What size development is it? ie how many units. If it’s a resi based loan the DA will not provide an increased value. In some cases a commercial val will, but it comes down to the overall picture on end construction vals, peak debt etc.

To answer your question – it depends.

Valuers will base it on the local market – so in hard to let areas there can be a significant valuation variance between tenanted and vacant, or short term vs long lease.

Property type ie industrial, office is definitely considered and the leasing rate. For the most part commercial will often be compared on…[Read more]

Speak to your solicitor for the purchase immediately – if you do not have the right contract conditions in place you may be locked in.

Joint and several liability from joint borrowing with non spouses is definitely an issue which will destroy most borrrowers borrowing capacity – so it’s a prudent piece of advice to try avoid these types of arrangements.

With 450k borrowings – there is going to be a lot more quality residential than commercial properties. Commercial also requires…[Read more]

Don’t directly redraw it, else you’ll have a mixed use loan which is a pain for claiming tax deductions – reduce PPOR loan and create a new split for the same amount. Before doing this make sure you still have sufficient borrowing capacity with the lender that the PPOR is with, else you might pay down your loan and be unable to create the new…[Read more]

There are buyers agents who source commercial properties for buyers – I’ve worked with David Mews from REvaluate who assists investors source commercial property for investment, SMSF etc. http://www.adelaideba.com.au/#!commercial/ctzx

Compared to residential property, commercial is quite specialised and the average investor will generally not…[Read more]

There are buyers agents who source commercial properties for buyers – I’ve worked with David Mews from REvaluate who assists people source commercial property for investment, SMSF etc. http://www.adelaideba.com.au/#!commercial/ctzx

Hi Liam.

In terms of your questions, landlord insurance + property management will certainly be the main additional costs than currently.

With regards to the finance – the lender *may allow the loans to switch to IO, this depends on the lender and specifics of the loan (how many years in etc). You’re not going to be able to combine the two loans…[Read more]

Huilo, the borrowing capacity with many lenders for SMSF is calculated completely different to your personal name – the contributions are counted as income and in many cases your personal A&L is disregarded for servicing. This is an area we’re seeing a lot of clients venture into to increase their portfolios through a tax effective vehicle.

If it’s cheaper than renting – sounds like a good potential option. Manage and mitigate any risks that you can – through buffers, insurances etc. Over the long term you can grow your financial position.

And it varies on the ‘type’ of valuation. Some will send out a valuer to inspect the property (full report), others will just drive past the property (kerbside), and sometimes banks will just use their own computer model to estimate the properties value without any inspection.

Using a buyers agent can certainly be valuable – especially if you’re new to investing or wanting to invest in an area you’re unfamiliar with (interstate etc).

$8,800 is about right, some States are more/less. The key with selecting a buyers agent is to ensure they’re working exclusively for you, not selling you developers stock for…[Read more]

There’s no legal restriction, but there’s two main factors which will decide whether it’s the right time to setup a SMSF:

*the practicality – whether the benefits will outweigh the upfront and ongoing costs, this is usually the case as the balance increases
*lender policy – whether you have the ability to meet the lender policy requirements to…[Read more]

Property across Australia doesn’t move in a uniform up or down, there’s different markets and markets within markets – so you’ll see many investors actually consider other cities/states when their market goes through a down turn. ie right now we’re seeing a lot of Sydney clients looking at Brisbane/Adelaide as they believe the Sydney market has…[Read more]

Definitely draw from equity then, especially if you have any personal non deductible debt.

When there isn’t sufficient equity and the borrower has a principal place of residence with a personal debt, the other option is to use the cash funds to reduce the existing home loan, then setup a new investment equity release to pull out the same funds…[Read more]

And that is exactly why you would generally shy away from a declining market. Catching falling daggers is dangerous business. There are people who will try to pick the bottom, which is a fair strategy, but still in the early stages before you’ll see significant upswing to allow the portfolio to leverage and grow further.

You’re likely going to need to remain in your job to show sufficient cash flow for the development – at that small size a triplex can be done on residential rates, which is going to be a lot more cost effective than commercial lending.

Perth market – that’s an interesting one. Ensure you factor in values post development, as a number of perth…[Read more]

Is this for an investment property or your own residence? You can setup a seperate loan split against the property if there is sufficient equity to fund the renovation costs.

Definitely agree with Jamie – with all the investors we see each week, the number one issue for first time investors is having a sufficient deposit.

After gaining a few properties, this quickly changes to having sufficient borrowing capacity to continue growing their portfolio.