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Hi Glenetti,
Are you addicted yet?
Most typical leases are paid at a weekly rate with a requirement, unless otherwise agreed that the tenant will be two weeks in advance.
Tenants are also required to pay a bond equivalent to 4 weeks rent upon taking up the lease.
Loan repayments are typically calculated on a daily basis but paid monthly.
Interest only loans are readily available with the typical I/O loan being for 5 years – some longer now as banks become a little more attuned to the needs of investors.
The banks generally have an expectation that the loan will revert to P & I after the I/O concludes but it would be a brave bank manger to ask that on an asset that has grown over five years, where you have met all repyaments as required, when you loan is readily transferrable to another bank if they get a little niggly and when mortgage brokers are now a clearly defined presence in the market place and can act as an intermediary between you and the bank – many banks.
P & I loans are typically up to 25 years although I believe 30 year loans are possible.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Brenny,
Who has told your Dad that he is now over the assets level?
I recommend an appointment with one of their advisors and you go along too so thatyou can look at things from a slightly different angle.
How much over the assets test level is your father? How is this determined? Are the figures accurate for the area? Is the pension amount lost significant? Or is your Dad better off ditching the pension? – I suspect not based on your comments.
Some other random and incoherent thoughts.
What about reverse mortgages through Commonwealth Bank? Are these an option?
Sell the duplex to you and gift you an allowable sum of money to reduce his asset base.
Sell the property and buy some cheaper property, (but under the asset level) and such that it is returning similar or better income levels.Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Lazy,
Good growth areas.
Check out http://www.quartile.com.au – they may have a general ‘report’ type document on the area.
Also check out http://www.prd.com.au as they will be able to give you statitical data (at a fee) on the two areas too.
Just remember some of the stats used in the report and to compile the report may be a little aged in a fast moving market.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Misty,
Lenders tend to work on gross income levels, but this does vary. A good broker should be able to get you over the serviceability line if they have a good relationship with the various lenders the work with.
If not, there are number of lenders who also include lo doc and no doc loans in their product range so these may be available to you, albeit often at a slightly higher interest rate.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Monopoly,
You have been ripped off – there is no legal requirement for you to put a 10% deposit down in Victoria.
From http://www.loan.echoice.com.au/pages/h_vic_deposit.html
I also recommend a check with the legislators in your respective states – some of these household myths incorrectly develop ‘law’ status without it being enshrined in state or federal legislation.
“Both sale deposit and property insurance will become issues as you approach the exchange of contracts. Note: this presentation is not intended to replace formal professional advice.
How much is the deposit? Most often buyers and sellers expect it to be 10% of the purchase price.
However, it can be any amount agreed by you and the seller.
Where is the deposit held?The seller’s agent or solicitor can hold it in a trust account. This means that the money is not owned by the solicitor or agent, but is held in trust until it is released.
How is the deposit released?There is a law called the Sale of Land Act that deals with deposits.
The seller can ask you to release the deposit before settlement. To do this they must:
* give you information about any mortgages or caveats that affect the land; and
* there must be nothing in the contract that prevents the release of the deposit money.You can ask the seller to provide written proof that the mortgage (if there is one) will be paid out at settlement, so you are guaranteed possession of the property on that date.
If someone is doing your conveyancing, they may want other questions answered before allowing the deposit to be released.
If the seller asks you to release the deposit, you have 28 days to respond, otherwise it is assumed that you have agreed.”
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Dave,
And in Victoria,
Should I insure?
“You should think carefully about insuring property after you sign the Contract Note or Contract of Sale. A law called the Sale of Land Act says that you can pull out of the contract if the house is damaged and is “unfit for occupation”. To do this, there are technical rules about notifying the seller – it’s worth getting legal advice if this happens to you. Also keep in mind that the destruction must make the house uninhabitable. If it just causes damage – you may not be able to get out of the contract.
If you want to be absolutely sure that the property is insured and you are covered for anything that might happen, the best advice is to insure the property as soon as the Contract Note or Contract of Sale is signed. Other reasons for taking out your own insurance are:
* the mortgage documents can insist you take out insurance; and
* you might not be able to check the seller’s policy, and it is unwise to rely on the seller’s word that the level of insurance covers the value of the property.”From http://www.loan.echoice.com.au/pages/h_vic_deposit.html
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Dave,
Definately get insurance from the day your offer is accepted as you have a finacial interest in the property. This requirement is actually legislation in Qld and may also exist in other states – worth checkingout with the relevant authorities in your state.
At the very least get a cover note organised at time offer is signed off and at the latest when all conditions have been met.
Considering the costs involved ~15% of an annual insurance premium is cheap ‘insurance’ of your asset and ensure it will be in one piece when settlement is effected, or at least your financial interests are covered.
Why pinch pennies when insurance could save you thousands? For me the bigger picture is always more important.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
Simon is based in Newcastle – but don’t let that discount using his (or the services of others)
The wonders of modern technology usually mean there is little or no need to be seated on the other side of the desk from your broker.
The key issue should be can they source you a loan that suits your needs and at an appropriate rate to your circumstances.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mysta,
Not certain but I suspect if the data originates with a state government department due to the need for stamp duty to be collected then private sales would be included.
If however only REA contribute then I would suspect private sales are not included.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mysta,
99% certain it does – used to anyway.
Suggest have a ‘surf’ and view their sample reports to see if it suits your needs.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mysta,
Not only can you get the date the property cahnged hands but you can also get the sale price.
In WA Aussie homes webisite links to Valuer Generals Office and for around $30-$40 you can get up to the last 75 sales sent to you immediately via the net.
You can do the same at http://www.realestate.com.au with their homeprice guide reports which cost around $50/postcode.
Be aware that some of the data is a little dated as some states do not update their records as quickly as others.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Patrick,
One of the key reasons (if not the key reason) is that all costs associated iwth your own home are not tax deductible and as such owning your home is accomplished all by yourself and without the assistance of tax refunds or reductions.
Whereas as soon as you convert your home to an investment property all (most?) of the costs are deductible either as immediate deductions or depreciable items depending upon the nature of the expenditure incurred.
As such you can own your home slightly quicker this way as the taxman is helping you too. The tenant contributes tooif your rental costs are less than your tenants.
Such a move does take a leap of faith by yourself and is a little ‘different’ to the norm. But some successful investors I know do not own their home.
In the current market Monopoly’s point ocmes into play in many metropolitan markets at the moment where it is cheaper to rent than buy the same house.
Me – I still like to call somewhere home[exhappy]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi CD,
The issue is that more research is required which is what I said in my first post.
If that population trend continues then buying ‘locals’ and tenants will become fewer in number.
So we now see the market move into buyers and tenants market with more people selling than buying (=prices stagnant or deflating) and/or more properties for rent than tenants (=rents stagnant or dropping).
Sure some of the decrease could be offset by changing household demographics whereby the number of households (as distinct from the number of people) could remain the same.
It all gets back to the need for extensive research and not simply responding to an article printed in a newspaper (or a post on a forum or something someone tells you) and becoming part of the ‘herd’ that creates an unsustainable market.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Ng,
It really depends on whay you bought the property.
As you are using Steve Navra’s advice then you are more growth focussed and as such would (or is that should) be investing for the long haul so that you are able to access the equity as per Steve’s process. If this is the case then you are better off holding for the long haul.
In all likelihood the property is not going to get any cheaper and if you do sell and choose to re-enter the Brissy market later it’s going to cost you more. I’d hang on and watch it grow. and grow and grow and grow.
Sure you can ‘take the money and run’ but only if it suits your long term plans or is a matter of necessity.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Rugby,
T’was fortuate I reread my comments – and such a little word that was missed – but the meaning oh so significant.[dunce]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jaffa,
You said, “About the economy…it makes you wander where it’s heading.”
The very same question has been pondered for many years and for the last 40 years there has always been a reason to not buy property.
I recommend you have a quick glance at Chapter 8 in Jan SOmers Book – Story by Story – take particular note of Fred Johnson’s story – a guy who has been investing since 1954 and all the reasons people trotted out about not investing in property.
If you don’t have the book I can email you the story (one page long) if you wish.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Milly,
Steve Navra has an office in Brisbane. Check out http://www.navrainvest.com.au and http://www.navra.com.au.
Tel 07 3360 0888 Suite 6, Level 3 Waterfront PLace, 1 Eagle Street Brisbane. Ask for Suellen – she is my contact.
There basic philosphy is property the core investment strategy with strong back up from shares and cash to maximise your equity/cash and asset growth.
They are growth focussed so you’ll need to ascertain whether that suits you and your style.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Daaj,
OK Fair enough some and have done since January 1985.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Daaj,
And you would know we were telling the truth by what means?
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Acey,
By the time you have finished that you’ll be able to start the whole process all over again – I am sure zoning rules would have changed sufficiently by then[biggrin]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
