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I can only talk about BrickX as its the only one I’ve looking into.
Seems like a well run group however a things I cant get past……
1/ Their PM fees seem very high
2/ Their “pre-purchase” structure seems prone to abuse
3/ their entry and exit costs are high’ish’ (though no worse than stampduty/agents fees etc etc BUT bricks and mortar shouldn’t be like buying stocks.That’s said, seem to be the best of the bunch and if you think returns are acceptable to you then all power to you.
Up? Down? Sideways?
Thoughts?Depends on what you think he does with Chinese and the threat of tariffs (this is going to have the biggest affect on Australian economy).
This said money is getting a lot more expensive here in the USA, some people are saying bonds are oversold on the rapid move….but I’m not sure, I expect to see a lot of inflation here in the USA over the next 4/8 years.
If you haven’t already you might want to lock in your fixed loans on aussie property sooner than later.
Thanks for the link to the regulations Terry.
Unfortunately they seem to tell you about the “apartment” but not really where the money is going and why the strata fees are high.
But next time I get a strata manager tell me they don’t want to provide any info i’ll send them a form letter asking for the minimal amount and quote the regs just so they have to do ‘some work’ :)
Appreciate it.
CBA shouldn’t assess the debt at 7.25% for the existing US debt, but instead 25 years P&I (or 30 years if P&I from day 1) @ 20% above the prevailing interest rate on the associated debt.
In any case banks aren’t quite sure what they want these days in terms of expats/OS borrowers – more so non residents.@corey, lol try telling CBA about 3.5%+20% exchange……and that’s why they didn’t get our business. :)
Likewise you are right about St George not knowing what they want and no allowing us to increase our portfolio loan……and that’s why they don’t get our business either. :)
Westpac took forever to get approved and came back twice to make sure we really didn’t own a car (eg I don’t think they understand the parking situation in NYC)…..but said yes so they get our business for our next $700k IP mortgage (and most likely first dibs at the next one after that as well in 2018).
As a side note Aussie banks wont take foreign property as security as there is no way (or at best long and protracted) to get a hold of the security to recover funds in the worse case scenario.
@colin, Yep we weren’t asking for the Australian banks to take into account our NYC PPOR in anyway apart from repayments which like I said CBA screwed up by insisting on calculating the interest rate at 7.25% when our PPOR loan is a 30 year fixed at 3.5% and no matter what we did to explain that the loan was fixed for the next 28 years and 10 months……at 3.5% they couldn’t understand why their calculations were illogical.
In the end we went to Westpac and they approved us for a $700k loan at 70% LVR (the irony that their subsidiary St George wont extend our portfolio loans because we are expats but that the Westpac parent division is happy to take our money…..still puts a smile on my face and cracks me up).
renovation/repair fees of 1% if a unit, 2% if a house (you actually pay 2% for a unit but the other 1% is sinking fees etc to the body corporate etc).
I’m assuming this is your first property so under the land tax threshold but also adding in annual land tax payments.
What sort of “Apra” help are you proposing?
Wouldn’t your Broker have known that CBA used a sensitised rate on external loans whether they be in this Country or not ?
I don’t know….. it was my understanding from the broker (who is active on the list here) that CBA was the best to go for as they treated my wifes existing IP’s and PPOR debt the best…..eg would let her leverage the most…..lol or not as it turned out :(
Hi Dean,
The irony that comes from St George knocking back expats working overseas on their portfolio loans might actually cost them more than they think…..
I N T E R E S T I N G !!!!
You will be keeping in touch, no doubt? Good luck with it,
BennyI’ll be sure to post back here early next year with the details however because of Australian regulations loans will only be able to be written for expats offshore (I know what a weird quirk……can be written against Australian property…..but only if you don’t reside in Australia).
I figure my wife wasn’t the only one getting screwed over by St George so when the investment memorandum proposal crossed my desk I was happy to chip into their initial foundational funding round.
Nice work if you can get it – become a Bank.
Interestingly…..I’ve take that advice to heart :)
Still not official yet but I’m a 1% foundational shareholder of an offshore bank planning to do exactly that….!!
The irony that comes from St George knocking back expats working overseas on their portfolio loans might actually cost them more than they think…..
Keep in mind Mike that releasing equity on UK property might actually count against you !!
eg my wife recently got knocked back on a loan with CBA through a broker here on the site because CBA used the APRA serviceability on our PPOR here in NY (the property is worth about $US2.2m), the current mortgage on this PPOR is around $US975,000 which if you work out at todays current exchange rate is around $A1.25m
Our monthly payments are $4433pm
Now here is the kicker……even though our PPOR mortgage is fixed for 30 years at 3.5% CBA in Australia insisted on calculating the serviceability requirement at 7.59% a total of 4.09% higher than what we are actually paying.
WTF??
Basically our $4433pm would is being counted as almost double even though our mortgage rate wont and CANNOT be changed for the next 28 years and 6 months.
Im not sure what rate you can borrow on your UK property from a UK bank and if its as low as 3.5% but its something to think about, might make sense to apply/borrow in Australia and then borrow from the UK after the loan has gone through to ‘equalize or release equity’.
probably down as will be oversized….you should offer to sell your block.
This said, depends a lot on design etc. At least it will most likely be nice an quiet and no one will complain about your tenants listening to the TV too loud :)
How long were the leases?
Should have just sucked up the short term loss and then given the tenants notice to quit once they came up for renewal.
Make sure you include the leases in the sales contract eg so they cant be extended.
How do you know an agent is lying…..their lips are moving.
Of course you can force an agent to show you whats there.
Hold…..its costing you less than $3k a year for 8 years (you say $3k like last year was an anomaly)……whats not to love?
even if it cost you $3k every year for something that you put no money down on you doubled your money at $45k for less than $28k.
interesting question…..so is a special levy deductible if the property is rented at the time of payment or when youa re first made aware of it.
(btw a third option you didn’t take into account is rent out both properties and go and rent somewhere else……
I guess a 4th option is…….rent out both properties and go and buy a new PPOR, but if you are having issues coming up with the $25k special levy……buying a 3rd property as your new PPOR isn’t really an option).@corey, I agree on a 2 year fixed….but on a 5 year fixed…..sounds like cheap insurance to me. Basically allows an investor to sleep soundly at night for at least the next 4 years and then consider selling when the fixed term period runs out in 5 years from now rather than being in a situation where you are at the whim of the banks who can raise rates at any time…..
@Bjoern, your maths is correct….if it costs you more for the offset and you don’t expect to have $30k in it then don’t get it. This said…..shop around as some banks offer it at no additional expense.
@colin, there would be no way we’d sell any of our investment properties within 5 years (forget the break mortgage costs….the stampduty/sales costs would be a killer for people to make such rash mistakes)
We have other “back up funds” that we have access to should there be temporary issue come up and even if a permanent loss of income should happen we still wouldn’t need to sell IP’s as we structure our loans for break even- we’d actually sell our PPOR if permanently incapacitated and downsize into a smaller apt/house as sitting on a substantial capital gain in our PPOR we could access.
having said that as much as I’d love interest rates in Australia to drop to 2%……I don’t see it happening this cycle – it would be nice to see long term rates (eg Australian 5 and 7 year) to come down though – currently the cheapest 5 year, <80% LVR, IO , IP I’ve seen is 4.49%…..anyone seen/know of cheaper??
lol at CBA announcing 0.13% discount within minutes and NAB announced shortly there after around the same.
Looks like the govt gave a wink and a nod to the banks that this 0.25% didn’t need to be passed on in full.
…..tell me the game isn’t rigged.
why would you need a trust? if you are an Australian citizen you can buy property in your own name.
…and yes I’ve purchased property sight unseen (well photos and video walkthrough but never visited in person).
