Forum Replies Created
Hi Guys,
My parents just had a similar situation. They have bought their first IP property but when they went to the bank for a loan the bank valued the house $40,000 less than they are paying for it. Their reasoning being that the property is in a new area and their are no similar houses to compare prices. I feel very nervous for my parents at the moment and they signed the papers on Wednesday.
A couple of other questions: If you buy a house @ land package do you have to pay full stamp duty on the house and land or do you just pay stamp duty on the land? What if you buy some land and then build on it later, does this incur only stamp duty on the land?
Also, “bridgebuff” mentioned that people seldom buy land packages because someone else has already made the profit. If this is the case then why do people ever buy house & land packages??? Is their more negotiation on house & land packages as opposed to an old house? Also, wouldn’t you at least have the advantage of a new house that you get the maximum depreciation on the house plus you don’t pay stamp duty???
Can someone please explain the advantages of buying house & land packages over say a 5yr old house??????
Thanks
PaulHappy New Year to everyone!
So does anyone have any new years resolutions?
My aim is to buy 1 IP by the end of 2007! That will be a great deal to me because I am only 22yrs old and 2006 was my first year out if university studies!
Goodluck everyone!
Hi guys,
Thanks for all your replies. They have been very helpful. However, reading the last response from Richard prompted another question: Other than the purposes of keeping your money more readily available with an IO loan if I have an IP that is on a P&I loan is the interest fully tax deductable?
I ask because the last response by Richard made it sound that the interest may not be fully tax deductable if I have a P&I loan on an IP??
Can you please confirm/clarify this?
Thanks
Paul[suave2]Hi,
Just a quick question about mortage insurance: How is the amount of mortgage insurance you pay worked? i.e. Will is be less if you are borrowing 90% as opposed to say 85%?[suave2]
Cheers
PaulHi mate,
Congratulations on starting to save money. I too am saving as much money as possible. At the moment I am earning ~$1200 per fortnight and saving ~$700 per fortnight, which isn’t bad considering i’m not living at home either. Although over Christmas I will probably not save anything because of presents and rewarding myself for a good year of saving money.
I’m also getting a pay increase of $6,300 in 2007 which should mean but mid-next year I will be able to buy my first investment property.
My New Years resolution is to buy one IP next year. Which is very challenging for me because I am only 22 and have now been working for 1 year!
Keep up the good work!
Cheers
Paul [suave2]Thanks Mate,
The couple I was talking about one works as a nurse (like you said) and the other is a police officer. I know the wife that works as a nurse gets the salary packaging which would confirm your thoughts.
Cheers
Paul[suave2]Hi,
I don’t agree with what Kev said about selling and buying another property to renovate. It is simply not wirth the hassle with a child in the house. Also, as Kum Yin suggested capital gains less than 25% is not worth it because you won’t make enough money after you take out all your costs to make it worthwhile.
However, one suggestion that some investors I know have done over the last 3 years is to move out of their house and turn that into an investment property. And then buy a second IP with the equity from your first house. This way you have a tenant and the tax man helping you pay off both houses. Also, if you are looking to move overseas in a few years. Then you can live in a rental property for a few years until you leave.
I had some family friends that build a retirement village in Sunraysia (Regional Victoria) and to fund it they rented for 3years so they didn’t have to tied up their money in their PPoR. Then once they started selling the villas they bought a house which no mortgage.
Hope this helps. Although, as someone else suggested now might be the time to save money for a while especially as you have a child which would cost a bit.
Cheers
Paul[suave2]Hi guys,
Everyone recently has been talking about interest only loans for property… If I was adopting a “buy and hold” strategy what is the advantage of buying a property with an interest only loan and that is still negatively geared?
I ask because if the property is negatively geared (which it most likely will be) than you are totally relying on capital growth and possibly rents rises to offset your losses. This is fine but what happens in 10 years if your property hasn’t gone up much money and you still haven’t paid any of your principal off???
Can someone please help because it doesn’t make sense not to pay of the principal as well. Especially when at the start of the load the P & I repayments aren’t that much larger than I only repayments…
My second question is if you have a 100% mortgage offset account and have say $20,000 in the account will the lender general let you pay this whole amount of your principal amount?
Cheers,
Paul[suave2]
hey mate,
thats a great story!
How can you afford to 5 IPs, be 22 years old and earn 35k pa??
Are the properties in regional towns and are they cashflow positive?Do you have a problem servicing the loans and how do you go about getting approval from the bank/lender to borrow more money?
Cheers
Paul[suave2]
Hi Wylie,
Without looking at the property it is impossible to know why the price is so much less then other properties in the area. Their may be some problems with the house such as structurally, termites, plumbing etc..
Alternatively, the vendor is in a hurry to sell the property before Christmas and has just dropped the price. Maybe the figure is much lower to get buyers interested but they are expecting 10% higher. Talk to the real estate agent and find out a bit about the vendor and why they are selling, how long they have owned the property and whether their have been any problems with the house in the past.
Hope this helps. Unfortunately, anything I (or anyone else) says would be a guess because we haven’t looked at the property.
Cheers
Paul[suave2]
Hi,
Just a quick question:
With a residential IP what is the tenant expected to pay?
i.e. Electricity, water, gas, land/council rates etc..
Thanks
Paul[suave2]Hi Marc,
Just a quick question:
When you allow 20% of rent for outgoings does this include everything – i.e. property management, land rates, electricity, water etc. that have to be paid.
Also, in a residential IP does the tenant pay electricity and/or water rates?
Cheers
Paul[suave2]Hi,
Think of Today Tonight and those type of programs as “reactive” as opposed to “proactive”. They only broadcast information that has already happened. Otherwise everybody who watches the program could just get rich by doing whatever the little person on the tv screen says and we all know that simply is not the case…
The way to become wealthy in property is too identify areas with high capital growth before the rest of the population does.
Having said that, whenever I watch an article like that I often have a look on the internet at some properties in those areas and see what the prices have been doing in recent times.
Anyways, sorry to bust the bubble so to speak!
Cheers
Paul [suave2]
Hey,
You could have sheep AND alpaca’s. Alpaca’s are often put in with flocks of sheep because they keep the foxes away. I have a couple of Alpaca’s at home – $1500 for a female it cost me!
Anyway, good luck with the challenge! Any ideas what your next trade will be? What happens if you can’t sell that ticket before the seminar is on – then you would go down to $0. I don’t think that was the wisest of trades in my opinion.
Cheers
Paul [suave2]
Hi Julie,
That sounds interesting. Were their any particular requirements that had to met before they would approve your purchase? i.e They would only lend 80% of property value or had to have equity in another property?
Where was the property? EU? What the stamp duty, morgage fees etc. similar to Australia
Thanks
Paul [suave2]
Hi mkc,
The property sounds very intriguing. Can you provide a bit more
detail about the property?Like how old are each of the houses? What suburb/town is it located? These are all things we’d need to know before investing $240 in a property…
It just seems a bit vague and dodgy to me…
Hi guys,
Interesting topic. Just out of interest, is it possible to salary sacrifice my HECS debt? That would be very handy. Also, how come some companies allow you to salary sacrifice everything (inc. home loans) but other companies do not. This seems highly unfair, for example the private company that I work for only allows salary sacrificing of your superannuation…
Also, I disagree elkam. 40k a year at retirement is quite sufficient depending on your situation. For example, if you have no house debts or any other debts than 40k a year equates to ~$700 p.w. which is more than enough to live off and be able to take holidays every few months. At moment, while my average weekly spending is $180p.w. which includes everything – food, rent, petrol, tennis and soccer once a week. However, doesn’t factor in registration for sport and car, services etc. However, if you are supporting two people than this would be a bit more.
Anyways, just thought i’d put my 2c in.
Cheers
Paul[suave2]Cabo Wabo
Established Forum Contributor [178 posts]
Posted 27/10/2006, 16:14:16i reckon 15% under is a pretty good spot to come in at. Don’t tell the agent what you are gonna offer. Go out to the car, sit and write an offer, go back in, give it to the agent along with ur card if u have one, and leave.
Give em the impression u know what u are doing, that u have good finance, that u are prepared to purchase if they are interested, but that u are just as happy to walk away. Be very subtle, and make sure you write the offer. That way u don’t waste the agents time.
Cabo Wabo
Hi,
Very interesting forum this one. Just a quick question. When you mentioned writing offers. Do you write the offer on any peice of paper and sign it? Or does it have to be on a specific piece of paper/document?
Also, is their a website you can provide for the Dep. of Land that tells you the asking prices of particular areas and the actual selling price? Someone said that most properties sell 15% below asking price?
Cheers
Paul[suave2]
Hi guys,
I was not aware about the stamp duty exemption on a first home. Can someone please tell me how much this stamp duty exemption is? And for which states it applies to?
Thanks
Paul[suave2]Hi Foundation,
That was a very interesting response that you wrote, however I also had to read it a couple of times to make sense of everything it says. Especially because my background is structural engineering and not economics.
Are there any websites or books you could recommend reading to get a better understanding of how australia’s economics works and how it affects property prices and interest rates?
Thanks
Paul[suave2]
