If it takes more effort to manage the manager than to self manage the properties yourself, it’s time to move on.

The big thing for me is maintenance requests, a PM should be able to handle these to make sure any *real* issues are resolved quickly, but also filter out any unnecessary requests/issues.

You pay for a PM to make the investment as…[Read more]

Stick to your guns, development is especially price sensitive, if the margins dwindle this leaves you less available to cover potential cost overruns etc. Even if this one ends up a pass, there’s millions on houses in Australia. :)

The general rule of thumb, is the less work involved, the less financial gain. The more parties involved, the more clipping of the same ticket.

As a supporting applicant LMI territory is acceptable now, lenders are becoming more flexible in this policy area.

As your partner is contracting however, it would be more likely to be at 80% max however, stability of income for the family is important in the lenders eyes.

That’s a very small discount when looking at flipping, as purchasing and selling costs eat into most of the transaction, and whats left will be ravaged by tax.

A good point, 10% doesn’t leave much room for error, delays, overrun budgets or the ability to negotiate down on price to secure an eventual sale. Just some food for thought.

The idea Ronnie is that the excess funds you are not paying into the loan are used elsewhere, either invested to grow the portfolio, or more pay down non deductible debt. It’s a zero sum game with that respect, however there is more practical tax benefits from paying IO on investment debt whilst there is non deductible personal debt in play.

If…[Read more]

I think you’ll find that you need to have already successfully sold the idea to most investors to even get them to take the business plan into consideration, it’s more a confirmation than sales tool.

What sort of business is this?

Listed beneficiaries will generally be dragged into the finance perspective in any case, so you’ll be back to square one.

A subprime lender may consider looking at this sort of deal if it can shown that the issues behind the defaults are not ongoing, but rates will significantly higher than prime lending.

If you really want to ask an awkward question, ask someone selling Off The Plan what happens if the valuation comes in significantly lower than purchase price (happens quite often). I’ll give you a hint, you’re in an unconditional contract and possibly have to make up the difference in cash.

I think Benny has identified a key issue. The yield appears to be sub 5%, which is quite low for a regional apartment within a NRAS complex. Not ticking too many boxes at this point. It might be worth playing devils advocate with this, looking at an altenative similar style security within metro Bris. How do the numbers stack up in…[Read more]

If you’re eligible for the FHOG for construction you may actually scrape by with a cheapish house and land package. This would boost your deposit to circa 30k. As you may be aware, the FHOG for established homes has now ended in South Australia.

How is the allowance paid? Some lenders will accept 5-6k car allowance per annum if it meets their criteria.

But you’re happy with the result no doubt? ;)

Generally lenders look at the monthly servicing cost of 2-3% per month on the limit. In this case reducing a limit down $500 would only achieve a $15/per month servicing boost per month at best, any loan that borderline is going to have a multitude of other problems which could be solved by using different lenders/products etc.

Nice, neat and presentable cheap reno. Good work, always best to provide a clean product, as you’ll attract the more desirable tenants too. :)

A *broker* (not a branch staff member) will be able to simultaneously run your serviceability across dozens of lenders at once, and factor in a lending strategy to try extend these figures over the long term – so there is no need to see multiple to see what figures each come up with.

The market is a market, if you can’t provide them with an option which is better for them, they’re not going to likely want to take it. :)

In the case of JV/reno-resale, that involves risks for the vendor and time. The reward would have to be *significant* for them to warrant consideration, and for the most point at the point of sale vendors want…[Read more]

A broker will go through your financial situation, future plans etc before submitting a pre-approval. A part of this will include calculating your serviceability with their panel of lenders.

Lenders generally take into account rent, interest, generally negative gearing addbacks with rental properties. They don’t factor in IP depreciation or cost…[Read more]

Try avoid signing anything until you have reviewed 3 or so options in the local area. Compare their sales strategy, sales record etc.

Look online and research how these agents perform and how their pricing is structured. Just because an agent promises you the world for the house, doesn’t necessarily mean they will achieve it. It’s a common tactic…[Read more]