Another consideration is that switching to resi finance can potentially give you a higher maximum LVR on the property – should you want to draw from the equity in the future.

Another consideration is taht switching to resi finance can potentially give you a higher maximum LVR on the property – should you want to draw from the equity in the future.

I own quite a few properties in low socio-housing trust areas and happily continue to expand my portfolio with these properties. Yields are certainly higher, but you also need to make sure the are has the right long term fundamentals – ie, decreasing numbers of housing commission houses, increasing owner occupier numbers, increasing population…[Read more]

I can say the same about the clients I see – a minority are using trusts and when they are it’s primarily for tax than asset protection.

Consider the possibility of litigation against yourself when you hear people spruiking constantly about asset protection. There’s a very different risk metric for a surgeon vs a public sector customer service officer!

Lending wise a 3 on 1 development is nice and simple with the right lenders – can be put through as a residential loan. It is worth noting however that unless titles are issued prior to completion, the development will be valued as OOT (on one title) which will be lower than the end product on 3 individual titles which can affect LVR’s until completed.

A lot of clients are riding the rates down at the moment, not all that long ago people were clambering for 5% five year fixes – which are not 0.5% cheaper again.

Fixing should be used as a risk mitigation in having consistant repayment figures – anything else is a gamble.

Agreed – also if there are defects which you are willing to repair, you can use the report to potentially negotiate the price down.

If you’re reducing to 4 on 1 title can certainly get it refinanced as a residential loan, we put quite a few of these through each year.

Jacqui has touched on an important consideration in that you carefully make sure the end result will be a better investment.

Good luck!

Like you’ve mentioned, I see it as more of a long term proposition. Yields aren’t amazing there in the meantime, so it is a bit speculative and reliant on some major parties (the council, business investment etc) to get it where it needs to be.

Back on the CF+ topic at hand, still seeing a few 8.5%+ yielders being purchased, which in this…[Read more]

Localised policy changed – to be honest I see that as a much healthier response than blanket restrictions for Australia wide!

It really does depend on the numbers. Large development can increase the profile and desirability of the town which can definitely work in the favour of values – but if the supply/demand ratio is skewd towards supply this will provide a long term dampener until scarcity resumes. With some regional councils they quickly do become accustomed to the…[Read more]

I’ve been of the mind that Sydney has already hit it’s effective peak – considering we’re hitting equilibrium in the ‘further boom’ vs ‘property bubble’ talk in the media, industry related commentary etc. We may see a further spike in the meantime, but it wouldn’t be surprising to see a minor correction over the forward period.

APRA’s fiddling…[Read more]

Long term valuation issues, potentially EPA site risks, lower rents etc.

Why buy a B grade investment when there’s millions of A grade investments out there. Remember, the pricing difference between now and the future will remain, so it will always lag behind average prices for the area.

Their calculations based on todays announcement should still make them a competitive player, however their slight adjustments to investor vs owner occupier interest rates isn’t that thrilling.

Different lenders have different serviceability calculations. This can include putting higher servicing requirements on their existing customers who they already have significant exposure. Making use of a good INVESTMENT focused broker who understands strategic lending can assist you to achieve your goals a lot further than going direct to any one…[Read more]

Vacancy is just one of the risks. Other factors include increased wear and tear, potential downturns in student accommodation requirements (similar happened in Newcastle, where the campus built their own accommodation facilities for students and wiped out the private market), increased churn in tenancies compared to a standard residential lease…[Read more]

Otherwise just make use of the 6 yr rule.

Some very large fundamental shifts in the policies of the lenders at this time – spending a lot of time with clients at the moment reviewing their situations so we can ensure we will meet their goals moving forward. Pre-approvals with a number of lenders aren’t being honoured with their new policies in place, which will make for awkward times for…[Read more]

There can certainly be a financial benefit in renting a property whilst renting your PPOR – so long as the rental is cheaper than the cost of living in the PPOR. Outside of the financial benefit there is the personal/emotional preference – some people like to own the four walls around them, whereas some don’t have any such attachment.

Just don’t…[Read more]

The valuer will 99.9/100 revert to the purchase price at sale, even if they believe the property is at a higher value. There is no effective benefit in you trying to achieve a higher value at the contract date, as lenders will take the lower of the two values – as Kinnon has touched on.

In practical terms, after 6 months you can order another…[Read more]