Forum Replies Created
With a line of credit if you have the right one can fix part of it. You must have at least $2,000 variable so you can pay money into the loan and redraw it.
The Portfolio loan from St George has regularly been voted the best LOC on the market. If you borrow more than $150,000 you are entitled to an interest rate reduction.
The Line of credit is like a big credit card secured by your home. However, you pay your salary into the account or your rent or both depending on whether or not you have personal and investment debt with the loan.
As a pure investment loan it is always interest only so you do not have to renegotiate the loan every five years.
I would recommend a 100% offset loan with your PPOR but think a LOC is much better for investment because of the flxibility offered.
One advantage Brisbane has over Sydney and Melbourne is that is the fastest growing captial city in Australia thus strong population growth to maintain rent returns. The areas immediately surrounding brisbane are the fastest growing areas in the country (Gold Coast, Redcliffe, Sunshine Coast and redland Shire).
This has been occuring for sometime and is likely to continue for a while. Thus I beleive Brisbane is just a valid location to invest as NSW or VIC on that basis.
I know lots of people on this forum buy without viewing and they have strong views in relation to doing this. I like to know the area I am buying so I can tell they type of area and they type of people living there etc.
I lived in a very poor working class suburb most of my life and would never have invested in it ten years ago. However, after revisiting the area I saw the changes the improvements completed and so I bought an investment property there in Feb this year.
So by seeing the changes in the area I could tell this was a good location to invest, becuase the old adage location location location is still just as important with investment as it is with PPOR.
Just my thoughts though.
Hi everyone I am a Finance Manager in a Real Estate office in the Redland Shire (Where Redland bay is located). The rents in the area are for the most part only around 5-7% gross return and declining.
There is a strong surplus of rental properties. We are the largest real estate office in the shire and we can’t rent all the properties we have.
Prices have moved by a staggering 30% in the last three months. I am now having a lot of clients having difficulty being able to afford to purchase and some of these people have quite good incomes and equity in their current homes.
I would not suggest this area for positive cashflow properties yes for negative and capital growth.
The areas around Ipswich, Inala, Acacia Ridge and Archerfield are close to the city good rent returns and still can find positive cash flow properties there. (just be careful even these areas are rocketing).
Hope this helps!
If you rent at 80% of the gross you receives covers the amount you wish to borrow then the bank may consider lending you the money.
However, this is unlikely so partnering with someone with a stable income could be the best option.
Make sure that you have a contract in place with who ever you partner with to avoid issues down the track and trust me from experience family is the most likely source of grief.
Definetly get all you people on board like your accountant and solicitor. They will help you through the minefield of tax and government requirements.
As for the loan structure it really depends on your personal circumstances. A line of credit does not owrk for everyone. You need to be disciplined with money. If you think you will be tempted to continually redraw the funds available for non investment reasons then I do not recommend a line of credit.
Also be aware that if you decided to sell and close down your loan before the fixed portion expires you may be charged a considerable penalty to get out of the loan.
So you need to look at your spending habits and look how willing you are to keep your non investment spending under check.
I hope this helps.
You can get comprehensive Landlords inaurance from a few insurers. It covers the buildings, some contents (carpet, curtains etc) loss of rent and tenant damage.
Suncorp, NRMA and CGU offer this insurance not sure what the rates are but give them a call and they will fill you in.
Davo70
I don’t know any brokers in ACT, but can tell you (assuming you are talking about getting finance to purchase a property)
You will need the following information.
1. At least three payslips for each of the borrowers (usually you and your partner)
2. Group certificates for this year
3. Statements on all credit cards and personal loans
4. If you already own property then copy of rates notice and insurance.
5. If you are self employed then last two years tax returns.
6. 100 points of ID (drivers licence, passport etc) if you go with a bank you don’t have an account with.Hope this helps
davo70I have been researching commercial property for a while and there are risks associated with them that are present for residential but seem to make the risk higher.
IE: If the tenant leaves the building it can take months to find another tenant.
If you buy into an area that is in decline then you run the same risk but can also may not be able to find a buyer if you choose to sell.
You need to be very clear on what it is you are responsible for and be very careful to check the lease (have a solcitior look it over, there can be some nasty surprises in their if you take over a property already tenanted)Talk to an accountant before taking the leap and mkae sure the accountant is savy with commercial property.
You need to have a reasonable deposit (if using property) as most banks will require at least 25-30%. Don’t forget to factor in the costs as well. These tend to be the same as normal residential property.
I hope this helps. If anyone reads this and I have forgotten anything please feel free to add.Thanks
Davo70I agree with the stick to your guns mentality. We sold a property in Brisbane back in April 2000 before the boom began. The property had been listed for three weeks and it did not look good. We knew the ppty was not overpriced. The agent told us we would not sell it as the market was dead and we were asking too much.
We told him it was either our price or we would take it off the market. Surprise surprise it sold in three days for the price we asked for. (very depressed we sold as the property would have been worth a fortune. ie one of those you learn from your mistakes situations)
Hope this helps
CBA has zero applications fees on it’s line of credit at the moment.
Davo70
To add to Terry’s comments you can get a line of credit that allows you to split the debt so a portion is for personal use and the balance relates to the investment debt. As long as all you transactions are run through the personal portion then the tax man will have no problem.
This is how I operate mine. St George, Macquarie Bank, Suncorp all have this type of LOC.
Hope this helps
Davo70David I agree that at some stage people have to take responsibility for their own actions. How many scams like this have occured over the last twenty years and yet no one seems to get any wiser why!
I am only 33yrs old and even getting on to this website and listening to Steve write I was very wary. So far I am yet to have my fears realised (thanks Steve!) However, anyone who will give $15,000 without any prior research mystifies me. I spent two months looking for my first car and it only cost $5,000.
But to be fair the things these scammers use are bordering on stand over tactics (bit like the mafia!).
Anyway that’s all from me.
Davo70
Ms Elvis may know the area a little I suggest you read her post on SA Mentors and email her direct.
Most of the areas you mention in Qld are ok they are outer Brisbane or Logan city locations for the most part. All are experincing strong captial growth. They are predominantly working class areas with good rental demand. Tin Can Bay is near Hervey Bay and this area is rapidly growing tourist area, Whale watching etc.
Rainbow Beach is also another nearby area that is growing well due to it’s proximity to Hervey bay.
Scarborough is near the city of Redcliffe and this is the star performer in the South East corner at the moment as it is near the water. Growth has been very strong and prices have more than double in the last twelve months.
Rental demand is also strong as many are moving their for lifestyle changes.
I would be very wary of beenleigh it is close to no where and has declining industrial base, it has a railway line but not much else.
Australian Bureau of Stats also shows declining population not good for rental income.
Hope this helps.
Davo70
I worked in the conveyancing area of two major banks for over ten years and i can tell you things get lost all the time. (not a lot in comparison to the number of documents processed) but they did get misplaced or someone files the documents in the bank vault and forget to lodge the transfer etc.
If the bank has lost the documents they may need to get another signed this of cause can be a problem 16 mths later when the original vendor may not be located easily.
As it appears to be the banks fault let them do the running around and keep the pressure on them. Regular polite phone calls will get you there in the end.
Just remember the banks conveyancing departments are currently in meltdown mode becuase of all the investors like us buying up big so be patient.
The transfer can be lodged at the settlement for the sale of your property so there is time.
Hope this helps
DavidUsing Stuarts scenario including the Medicare levy you would pay $20,590 in tax for the year.
This figure would be higher if it were not for the deductions you are entitled to claim.
So you don’t pay 47% on the whole $68,000 it is broken down into parts as Stuart’s table demonstrates.
Hope this helps a little.
Thanks David U
Just one more question. Which banks do you guys deal with in relation to this NZ or Aussie banks?
Thanks
Davo70This is a dumb question. I have been talking to the other half about possibly buying in NZ. Apart from the fear of buying so far away from where we live. We are not sure what sort of fees apply for buying in NZ.
I am aware of all the costs here in Australia like stamp duty, contract duty, conveyancing, registration fees and of course bank fees but what does it cost in NZ to buy?
Any help would be appreciated.
Davo70
Sooshie where are you located at because it is quite cold here in Brivegas today. You sure you want to move?
