Forum Replies Created
Thats pretty much it.
However stage one can see cash substituted with someones else’s equity (check legal ramifications first).
And step two can be hastened through renovations and/or paying down some of the loan.
Ultimately the exact chain of events is determined by your individual plan and position.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Ozi,
I ditched my Canon inkjet for a Kyocera Laser Printer about three years ago and haven’t looked back in terms of print costs.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Bodyworks,
Please note that I am not a broker so please take what I say with a grain of salt.
From a lending point of view you are very strong in terms of security even though the ‘farm’ will only be secured at a lower LVR level than your IP. A discussion with a good broker will be able to determine you true borrowing capacity.
Bear in mind that commercial lends usually peg out at around 65%-70% and as such you will need to provide the balance from somewhere – your equity in the farm and/or investment property should be sufficient.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Recommend you do a search on ‘trusts’ as the topic has been discussed at length previously. Check out the ‘link’ under forum boards to the top left of screen.
You can also go to http://www.gatherumgoss.com and order a book called ‘Trust Magic’ – could be the best $99 ever spent.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
When investigating a property for suitability of investment the amount of depreciation available is of secondary consideration. Of more importance is whether or not the property will provide you with the growth or income you desire.
Any tax benefits you can claim should be treated as the icing on the cake and not the reason for the investment.
However as a guide townhouses built in 2001 had construction cost ranging between $950-$1250/sq m.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by FireCaesar:It is listed at $130,000 and the vendor would take $125,500. It is currently rented at $235.00 per week.
As Richmond has already indicated a unit this small is considered high risk by lenders and as such they will not lend at 80% on anything this small. Because of this you will find that more seasoned investors will tend to steer clear of these (unless they fit a special need) and therefore long term growth is questionable and capacity to sell of quickly limited.
If the advertisement indicates the vendor is willing to take $125500 and you see a purpose for the investment then offer less than this. Even if the vendor says they will take this price – they still have to find someone willing to pay it. Start negotiations with a lower figure.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
If you are only selling your home to free up the money for investment you may be better off speaking to a broker who can show you how you may be able to keep you home and also free up some of the equity you have available for other investments.
One of the key advantages you currently have is that your PPOR is CGT free and you do not ‘lose’ money paying REA fees, stamp duty etc as you buy and sell.
Ultimately what you do is up to you but for me I would suggest you hold fire, spend some time thinking and planning about what you want to achieve and then take action that is consistent with these plans.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by Chris2004:Above all remember any loss of income is subsidised (by your appropriate tax rate) by the ATO and as such your end of year out of pocket expenses are not as bad as they seem.
What does this mean?
Hi Chris,
A ‘loss of income’ due to no tenant also reduces your taxable income as a proportion of your costs of running the property.
So, in effect, the $1000 in lost rental income could potentially depending upon a range of other factors result in a marginal tax refund of $480 at the end of the financial year.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Originally posted by Chris2004:I have had one IP for the past 11 months but my PPOR is about to become my second in a few month when I move out. I am so scared about this to the point where I’m currently having a drink to calm my nerves, very scary!
Hi Chris,
The main thing to remember is that you shouldn’t be ‘jumping at shadows’ as the possibility of a period without tenancy should always be considered in your calculations.
The temporary loss of income shouldn’t be seen as the final straw in a properties existence. With a little careful management this can be partially minimised – for example having funds in reserve for moments such as this, manipulating rental agreements so they expire when you want them to, maintain lease agreements and do not let tenants go on periodic leases, regularly review rents so that you are getting your just rewards and if tenats are hard to locate consider a slight reduction and/or an incentive to get a tenant in.
Above all remember any loss of income is subsidised (by your appropriate tax rate) by the ATO and as such your end of year out of pocket expenses are not as bad as they seem.
On a similar note I certainly wouldn’t be selling off your existing PPOR as it is CGT free and will remains so for a further six years if you do not buy another PPOR. Whether you sell or not should be determined by your original plans and whether or not they still hold water now. Sure if things have changed considerably then maybe – but …..
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping.
Hi Zen,
Try this https://www.propertyinvesting.com/forum/topic/6845.html
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Certainly hang onto these – Innaloo is reasonably close to city, beach, transport and employment oppotunities.
Long term it will be a great investment.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Myydral,
Ditto the previous comments – at this stage use your equity to progress your financial future.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by collie:There are 2 houses for sale in our small town (1400 pop) that is halfway between two large regional centres.
Hi Collie,
Firstly let me welcome you to the forum and I am sure you’ll get diverging opinions about the suitability of these properties as investments but…….
On the face of what you have said and for ‘me’ the town is too small. A population of 1400 leaves you susceptible to minor population and/or industry changes. I would prefer to put my hard earned into something of a little more substance.
You did indicate that ‘this town’ is half way between two larger centres. The critical issues is how far away are they and do these towns have much of an impact on ‘your town’?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Shawn,
The critical message is that postively geared, as per the purest definition, are as rare as hens teeth in Perth.
Sure, it may be possible to ‘manufacture’ then but in the main we are at the wrong stage of rental & growth cycles for them to fall out of trees.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by crj:Maybe you should spend a few hundred and get a valuation done so whatever agent you use you’ve got the facts.
You can also go to the WA Valuer General’s Office and for around $50 get details on recent past sales in the suburb.
Valuers largely use this information, a blindfold and dart board, some ‘educated’ research and discussions with local REA to arrive at their figure anyway.
In considering alternative REA you also need to be aware of their ‘marketing’ program and what they offer in this area. Just remember all REA fees in WA are negotiable – but balance this with their ability to market and move your property.
You may also want to ring the previous agent and let them know why you will not be using them – a bit of potential customer feedback doesn’t hurt anyone.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by waprincess:I met a real estate agent whom I liked and asked her if she would like to sell the house only when she came to view the house she brought a partner, a real slick salesman kind of guy they then spent the next ten minutes playing good cop bad cop with me during which the guy asked me if I wouldn’t mind selling the house to an investor friend of his for no less that $20,000 less than the bank valuation of the house (and I know how conservative the bank is).
The house is costing me – I have to get rid of it but I feel oblidged to let the lady sell it – thing is her partner has really got my back up.
Hi Princess,
I am curious as to why you feel obliged to use this ‘lady agent’ as you are not obliged to use this agent at all – if you find one of the ‘partners’ objectionable then move on a find someone who meets your needs.
Bear in mind the agent is employed by you and should be looking after your interests. From your comments I suspect ‘superman’ sees you as a desperate vendor and thus an easy sale in waiting.
There are other agents in the area and I am sure that with a little research you can find someone who suits you without the need for them to engage in a ‘good cop – bad cop’ routine.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Ambo72:Get rostered on to work Christmas Eve, Christms Day, Boxing Day, New Years Eve and New Years Day.
Ian [angry2]
Hi Ian,
Upset the boss did we?[bigeyes]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi myoung,
Asbestos roof sheeting is the ‘sleeper’ in the asbestos debate. It suffers the most weathering and as such is most likely to be degraded to such an extent that the fibres are released into the atmosphere. The effects of the sun, rain, wind and hail lead to the breakdown of sealants and as such fibres can be released into the atmosphere, gutters and subsequently onto the ground in an ongoing manner.
Roof replacement is an expensive exercise as there are process that must be in place while sheeting is removed. Any material disposed off must be done so in an approved manner and discarding at tips can add other costs depending upon where you are.
Another technique sometimes used is ‘encapsulation’ – which is the application of a second, and approved, sealant that extends the life of the roof sheeting.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Booboo,
Rental increases of that magnitude would be dependent upon the rental market being very, very tight.
While there has been some tightening in some of the major markets around OZ as a result of the reduced affordability of homes it hasn’t been to the extent you believe.
Don’t forget the rental market is ‘controlled’ by large numbers of ‘mum and dad’ investors who for various reasons do not actively manage their rental properties and thus their returns, leases are up for renewal at various times in the year and there is no single entity that says ‘rents will go up by x% in the new year’.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Micasa,
It sounds as if you are paying P & I on your investment loans. Based on this assumption I belive you would be better off converting some or all of your investment to interest only, especially while you still have some non-deductible debt.
After your home is paid off then reconsider your options.
In addition you may want to consider a PAYG variation form (if appropriate) and a depreciation report to maximise your cashflow – if you haven’t already done so.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
