Forum Replies Created
Hi Kiara,
Depending upon your individual circumstances you could also consider a tenants in common arrangement where it is possible to apportion ownership according to your levels of contribution. TIC shared arrangements are possible from 99%/1% to 1%/99%.
There are a couple of trust related books you may find of interest; Trust Magic by Dale Gatherum Goss and Trust (?) by Renton. The latter is a little heavy going late at night.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Tina,
See the following thread – you can’t go wrong.
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=9557
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Plastered,
I would suggest you keep your $3K and put it towards something more useful like your next stamp duty bill or…………
As Russ indicated a good book will set you back around $30 – I would recommend at least 2 books Steve’s and a book by Jan Somers – sure they have conflicting points of view. And then there a whole lot of other suggested readings (see the Heads Up forum) that may take your fancy as you move along the knoweldge trail.
I recommend reading the two opposite books as there is more than one way to invest in property and ultimately you will need to find your own perspective.
Then there is the forum that allows you to ask all those ‘silly’ questions and read as much as you want to help you further expand your knowledge base.
Ultimately the most learning will occur when you finally become an investment property owner – and that is when the fun starts too.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Piece,
When lenders are assessing your borrowing capacity they will consider your ability to service the loan (make payments) and also the amount of security you have.
Initially lenders are primarily concerned with your core income level which does include a varying recognition of rental income (your DSR). Some banks have a more generous recognition of rental income than others (up to around 75-80% is fairly typical). Banks get a little twicthy when your loan repayments get to around 30-35% of your gross recognisable income.
The other issue is the ratio between the value of the assets and your debt levels your loan value ratio (LVR). Banks are generally very comfortable when your loans are up to 80% of the value of your assets. Over 80% they will still do the business but will normally require you pay lenders mortgage insurance.
Ultimately you are best placed talking to a savvy mortgage broker as they will be able to fit you with the best lender for your short and long term circumstances.
A well structure loan portfolio in the beginning can be very advantageous in the long run.
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hi Falcon,
All income is supposed to be declared (whether you do or not is your call – provided you are willing to accept the consequences).
I would suggest under the circumstances outlined there is a possibility that ou could be checked on and as such I would be declaring income.
Some of your costs would become deductible (or partially deductible). I am assuming the property is your own home and if so the earning income scenario will impact on your CGT free status.
Have a discussion with an accountant.
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hi jwhat,
Yep – guaranteed rentals are generally built into the purchase price and tend to be above market rates to make the ‘deal’ more attractive thereby moving more product.
You need to consider who is paying the rental guarantee (usually it is you) and who is the guarantor. Sometimes it can be a $2 shelf company and at other times Insurance Companies.
Studio apartments tend to be on the smallish side and as such banks will not typically lend to 80%. As such they may tie up more of your equity/savings than they warrant.
A 20 year management lease ties you into an arrangement for a lengthy period of time. Would appeal as an ongoing business concern selling the management rights but would leave you open to the vagaries of individual management companies and/or their skills.
Inner city apartments in Melbourne and Sydney have been dropping in value in recent months – with a similar occurence predicted for Brisbane.
You will need to get your solicitor to check the contract out very, very, very carefully.
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hi Chan,
Works on the forum – haven’t seen how extensively it works elsewhere yet.
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hi Lucifer,
As I understand it loan mortgage insurers also have some ‘no go’ areas and even though the bank may say yes if the LMI says ‘no’ no loan is forthcoming.
Certainly worth considering but needs to be checked out before embarking on any project.
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hi Torachan,
There are always a lot of ‘ifs, buts and maybes’ in property investment.
Sure we are going (or is that just gone?) through a period when property investment was sexier than it has been for along time – really just market forces coming into play. Long term, good property will be a winner if you are there for the long haul and can cope with the ‘down times’.
Dotted throughout this country’s history is instance after instance when it wasn’t a good time to buy investment property – yet also throughout these times long term returns have been proven.
I also suspect you ears now prick up whenever the subject of property investment comes up in conversation or is in the media – I believe this is result of your psyche being more attuned to property investment. Whereas the average ‘Joe Public’ would entirely miss the comment – his mindset is elsewhere.
So is now a good time? Well that depends on what you believe.
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hi Kay,
Yep the labour would be free but the airfares – a killer!
Just wondering how to break this to the wife.
I know “Sweetie, just off to go and paint a house for a lady I met on the Internet and will be away across the country for a couple of weeks. Do you mind?”
Sure to be a winner!
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hello Chan,
It is here already – I am using it at the moment as we ‘speak’ or ‘type’ or ‘whatever’
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hi Kay,
Can’t help as I am a DIY painter (I find painting a little therapeutic) but the amount will vary depending upon the amount of preparation required beforehand.
Derek
derekjones1@bigpond.comProperty investment support – starts but never stops.
Hi Fish,
Check out Dale Gatherum Goss http://www.gatherumgoss.com
There are a number of investors from across Australia who use Dale so even if he is across town it could be well worth your while touching base with him.
He is also the author of two PI books ‘Tax Battles’ and Trust Magic’
Derek
derekjones1@bigpond.comRead my comments? Think I can help you? PM or email me.
Hi Dave,
Another site that has a range of calculators is
http://www.realestate.com.au/cgi-bin/rsearch?a=loan&t=res
Derek
derekjones1@bigpond.comRead my comments? Think I can help you? PM or email me.
Hi Misty,
What do you mean by land ‘give away’ deals?
The ones I have seen are by local councils keen to reinvigorate a town with declining population and services.
The blocks come with conditions and they are allocated to desirable (read skills useful to the town/shire).
The only comment I would otherwise make is ‘increased haste building a stack of cards ain’t going to help’ – let time and the power of compounding growth kick in and you’ll enjoy a smoother and safer ride.
Derek
derekjones1@bigpond.comRead my comments? Think I can help you? PM or email me.
HI Cobra,
Ask him how he fared in the late eighties early nineties.
Derek
derekjones1@bigpond.comRead my comments? Think I can help you? PM or email me.
Hi Taleisha,
Assuming the wife’s name is not on the investment property title it is possibly OK provided the rental rate is at market rates and there is evidence to support this.
Recommend you get a couple of local property managers to assess the market rate of the property and charge no less than this. It may also be prudent to use the services of a PM.
Ultimately in all matters taxation check this with your accountant before arrangements are finalised. Best to get it right from day 1.
Derek
derekjones1@bipgond.comRead my comments? Think I can help you? PM or email me.
Originally posted by tomori:Got to the stage where some of the more enterprising were stealing from relatives, housebreaking etc.
Never got into trouble selling porn but word got out – the tough guys would ‘rumble’ me (somewhere between the bus stop & entrance gate) to make off with them.
Hmmmmm – enterprising, yes – legal, no.
Derek
derekjones1@bigpond.comRead my comments? Think I can help you? PM or email me.
Hi Wilko,
The deductibility of a loan (or redraw) is determined by the purpose for which the money is intended – so if you redraw equity from an IP to use for non-deductible expenditure such as PPOR, Car or other consumable items then the interest component of this money is not deductible.
However having said that there is an appeal currently before the courts (ATO V Hart) that specifically addresses this issue. Harts have successfully argued that this can happen under certain circumstances and the ATO are appealing the ruling.
So before we all go out and restructure our loans I recommend sitting tight and waiting to see what the outcome is.
Without a ‘split account’ facility mixing deductible and non-deductible debt becomes very messt for you and your accountant and is best avoided at all costs.
Derek
derekjones1@bigpond.comRead my comments? Think I can help you? PM or email me.
Hi Scremin,
I recommend you do (or should that be ‘redo?’) a budget and earmark leisure/recreation spending money and maybe even time until the new found habit gets into your system.
That way you will not feel guilty when it is gone, you keep within your limits and the ‘mental anguish’ is removed from the equation after the initial figure is set.
Derek
derekjones1@bigpond.comRead my comments? Think I can help you? PM or email me.
