Forum Replies Created
Hi Bamute,
I have a line of credit on my PPOR. I have sub accounts that I have split off to take advantage of my equity.
Each sub account is used for a different investment purpose and this makes it very easy to keep track of. Just be aware that some lenders charge a monthly admin fee for each sub account. However, I don’t mind paying a bit extra to keep things separate and easier to understand, manage and keep track of.
Just remember, at tax time, tax deductible and non tax deductible interest has to be clearly identifiable.
Todd Burns
http://www.freepropertyhelp.com.auHi Herks,
If you’re going to buy a negative geared property I suggest that you make sure you’re going to get capital growth.
I think it would be worth getting the Residex Report on predicted capital growth areas to start you off.
If you pay tax there are lots of deductions you can claim from property investment. I prefer to buy newer properties so that I can claim good depreciation as well.
I also use Interest only loans which will makes it cheaper for me to hold the property (while I wait for the proeprty to rise in value).
Try and get something as close to cashflow neutral as possible. It is not uncommon to get a new or near new property that only costs you $70 per week of your own money to hold (taking tax deductions into account) It does depend on your income and other variables though.
Some of my negative geared properties will become cashflow positive soon because rents are rising. They are quality properties in quality areas and are very easy to maintain. These are just some of the advantages.
Todd Burns
http://www.freepropertyhelp.com.auHi All,
I use Deppro for my residential schedules because they are very cost effective. They have also been fast and reliable for me.
I have also used BMT and they produced a very nicely laid out report but were a bit more expensive last time I checked.
Todd Burns
http://www.freepropertyhelp.com.auGood post from Lee,
Many properties are not CF+ if you accept them as they are advertised. You really need to do a lot of negotiation and put in a lot of offers to end up with the property that will be CF+ for you.
You may have to negoatiate hard on the price and be prepared to walk away if the financials do not stack up or you may have to accept that you need to do some value adding.
In this climate it is difficult (but not impossible) to find an ‘off the shelf’ CF+ property. The thing is if you find one you better be quick because there so many others out there looking and if the deal is half decent it will be snapped up by someone else before you can say “where’s my building and pest inspection” [biggrin]
Todd Burns
http://www.freepropertyhelp.com.auHi Holdandrefinance,
I have taken onboard the feedback of Qld007 to be more specific
Click on the RAMS link and see if this loan product suits you-http://www.rams.com.au/products/lowdoc.asp
Hope this helps.
Todd Burns
http://www.freepropertyhelp.com.auQlds007,
I gave H&R the link to see what lo doc information there was. There is more information available if you click the lenders link. Even more information available if you call the lender on the the phone.
Todd Burns
http://www.freepropertyhelp.com.auAleta,
I have some positive cashflow property information coming out soon. There will information on both houses, units and even commercial deals. You can go to my website to register to get the information when it is released.
I suggest that you need to be VERY careful with selecting the first property because you don’t seem to be in a position of having much in the way of cash or assests to fall back on if anything goes wrong. Having said that, you have done well to save $20K.
Todd Burns
http://www.freepropertyhelp.com.auHi Jaffasoft,
I had this little black ant problem in a property of mine too. I got it treated once and the ants just came back.
The second time I got the property manager to use a different pest control company and they ended up fixing the problem and the ants have not returned since.
It doesn’t sound like a legitimate reason to me to break a lease. Especailly if the problem can be solved quite easily.
You could try sending your tenants this link http://www.mortein.com.au/product_ants.html
Todd Burns
http://www.freepropertyhelp.com.auMichelleandRob,
First of all let me state that cashflow positive properties in Australia still exist and I find them quite regularly (about 1 per week on average).
When calculating cashflow positive status I take into account ALL money used to purchase eg: Loan,deposit, legals, management, insurance and any other costs. I then consider ALL income eg: Rent, depreciation (if any) and tax advantages. Simply subtract ALL costs away from ALL income and see if you are in the positive.
Todd Burns
http://www.freepropertyhelp.com.auHi Canada,
I agree with Solomon. Don’t sell unless you have a good reason to sell. Especially if the property is not costing much to hold on to. The Sydney Market has softened significantly. Try and sell near the top of a boom if you can wait for it to happen again.
“Buy in GLOOM-Sell in BOOM”
Todd Burns
http://www.freepropertyhelp.com.auHi Holdandrefinance,
Have a look at the Cannex site http://www.cannex.com.au
Todd Burns
http://www.freepropertyhelp.com.auHi Freddy,
I own a nice IP in Northlakes Estate, Mango Hill (about 20 mins out of Brisbane). New Schools, new Westfields, nice parks, recreation centre, lakes and bike tracks. It’s very neat, well planned and lanscaped. It is also close to Moreton Bay.
I highly recommend it.
Todd Burns
http://www.freepropertyhelp.com.auHi Penguinchick,
I have a list of realestate search engines on my website that you could check out to see if they list rentals http://www.freepropertyhelp.com.au
Todd Burns
http://www.freepropertyhelp.com.auHi Tim,
Don’t be taken in by the high rent returns that you can sometimes get on display homes. You often only get good rent for a couple of years maximum and then the rent returns to market rate and you have to deal with that for the rest of the time that you hold the property.
I guess if you are doing a short term hold and are confident of capital gains in could be an OK deal.
Todd Burns
http://www.freepropertyhelp.com.auHi Whatson,
I have a house in Townsville that has done quite well over the p[ast couple of years (as the Brisbane Market was cooling off).
There is an interesting PRD Nationwide report on Townsville listed on the reports page of my website. http://www.freepropertyhelp.com.au
Todd Burns
http://www.freepropertyhelp.com.auTomtkb,
Why don’t you ring up Metricon and ask them what a complete package would cost?
Todd Burns
http://www.freepropertyhelp.com.auHi,
I agree with Nigel. I too would rent if rent is cheap where you want to live and buy an investment where rent returns and capital growth are high.
This is a trend that is occurring now. More people are making their first property purchase an investment property rather than an owner occupied property.
Todd Burns
http://www.freepropertyhelp.com.auHi All,
Each of my property managers email me an end of year schedule of all income and expendture relating to my properties and I just file my bank statements as they arrive.
My accountant emails me a spreadsheet at the end of the financial year and I take about 1hour to fill it then I email it back to him.
He gets back to me if there are any problems or to suggest anything that I may need to bring for our face to face appointment.
Finished !! [biggrin]
Todd Burns
http://www.freepropertyhelp.com.auHi Shazza,
On the basic figures you have posted, your property should be at least cashflow neutral. If you want more help you will need to supply more information as follows:
What’s the interest rate on your $100K loan?
Is it Interest Only or Principal and Interest?
Is it fixed or variable ?
What is the total of your costs ie: rates, insurance mangement etc?
How old is your property ?
Does your property have a depreciation schedule?
Do you claim tax back per pay (using the tax variation from the ATO)Remember, over time, you will still keep gaining equity in the property as long as you don’t sell. Who kows how long the WA growth will keep going?
It’s hard to make any suggestions on selling or holding because I don’t know what your goals are. What are you trying to achieve?
I personally, would avoid selling if at all possible, especially because your rent return is high (compared to your outstanding loan balance).
Todd Burns
http://www.freepropertyhelp.com.auHi Jenny,
Business turnover does not mean much. I could be turning over 10 Million but if my costs are 11Million the lenders will be scared off.
A 100% + may be possible but the rate would probably be high.
I think it’s worth asking if this company has a product that suits http://www.onyxfinance.com.au/
Todd Burns
http://www.freepropertyhelp.com.au
