Forum Replies Created
Your bank will require building insurance as part of a condition of your loan. You will also need to identify your bank on teh insurance policy as having a financial interest in your property.
I agree with Jac – having landlords insurance should be considered a non-negotiable cost of doing business. At around $250 (give or take depending on who you are with) it is cheap peace of mind.
Hi Sunny,
Another one saying BHP will not be expanding their Olympic Dam site in the foreseeable future.
santh wrote:I would agree that it will take a lot of time and effort to produce positive results. I just didn't want to commit if I was to be facing a losing battle.
Hi Santh,
Recommend number 13 on the roulette table.
If you want something that works quickly – then Steve's book is not the right one for you. Mind you 'no' property book is either.
Sorry about the frivolous answer but – in my opinion no matter which path you choose to follow none of them is short. In fact if you are working towards a very short timeline you reduce the research factor, increase the risk factor and become more of a gambler.
Having said that the journey will be relatively slow to start with – it will gather momentum as you continue your journey. This happens because you get better and better at what you are doing, therefore increasing your strike rate.
Above all – it can be done.
HI Bugeye,
Not a broker so take what I say with a grain of salt.
You cans et yourself up with a line of credit secured by your existing home. For example assume you can extend your existing loans to 90% this will provide you with a line of credit facility of approximately $55K as follows:
Current value ($410K) x 90% = $369K – existing debt ($314k) = $55K. *
The $55K then provides funds for deposits and purchasing costs.
* The $55K will be reduced by approx $7K or 8K (notional allowance for lenders mortgage insurance) Note it has been a while since I looked at LMI premiums so that may be out. I understand LMI premiums may have increased in recent months so look at the process rather than the numbers.
I would recommend you seek the services of a good broker who understands property investing and property investors. They will be able to help you set up your loan structures correctly from day one. A little bit of foundation work now will be invaluable as you move forward.
Vendor finance an option?
Looking at this another way.
Someone has listed their property to sell.
Most vendors prefer a quicker sale rather than a stretched out sale as per your initial question.
You don't yet have sufficient deposit.
I can see very, very few vendors accepting such an offer.
Methinks you are better getting finance in place and then look for a property. Sure this may take a few months & sure you may miss this one but there are 'lots' of properties in the market at the moment.
Hi Richard,
I certainly wouldn't be getting advice from a bank rather my point was to explain that sometimes you can redirect funds in a manner that suits your needs than simply following what the bank 'normally does'
Something we have managed to do. Keeps things clean for tax purposes.
Leave the $2300 undrawn in the loan.
Keep it to replace the hot water system, new carpets at the IP etc.
No interest incurred while the money remains in your loan and retains tax deductibility of interest.
Speak to the bank and explain why you want the funds undrawn. Believe it or not some bank officers are now starting to understand the tax benefits/penalties of certain actions.
Hi Coota,
You need to work out what the property is supposed to do for you.
No need buying a cashflow property if you are looking for growth and vice versa. If you do use a BA then you need to be able to give them a 'buying brief' otherwise you'll just end up with any old property.
My advice would be to step back and, if you haven't already done so, work out what you are trying to achieve with property. While there are a lot of properties out there not all will suit your investment goals.
Agreeing with Luke – full profit is added into and included as part of your declared taxable income. You are then taxed according to the relevant income tax scale
Hi JP,
Check out the ATO's website – they have a lot of resources for landlords.
The latest guide can be downloaded at http://www.ato.gov.au/content/00313554.htm
Bottom line is tenants breaking a lease will still be responsible for their rent and any costs incurred by the landlord.
Vacancy rate is still below 2% (according to this article anyway) which is extremely low for winter.
Slow news day.
Pet bonds vary from state to state some cases you cannot charge a pet bond. Which state are you in?
Most state governments have a website with tenants/landlords guides. Suggest a search and you'll track down an official guide.
Biggest drawback is the larger mortgage is all non-deductible.
Often this is a big hand brake on wealth creation.
Hi Santh,
Good pick up – the new website must have bumped the thread and then Jac ran with it and we all followed
Hi Morgan,
Successful property investing is more than just simply buying a property as the property you do buy must fit within an overall plan you have developed which suits your goals and personal situation.
I would start in the residential area first – mainly because your risks are lower and the amount of deposit you need is lower. Having said that I do know of people who have been commercial investors all of their investing life and who have done so very successfully.
Typically most commercial investments will require increased financing levels. Sure you can get small office type investment.
In a nutshell there are two types of investment strategies – at the end of the paradigm there are those who invest for cashflow and at the other end there are those who invest for growth. Then there are people pursue a more balanced approach and will try and achieve both cashflow and growth, not necessarily in the one property.
Then there are those who will buy to increase value by sub-dividing, renovating and/or developing.
At this stage I would suggest you work out how your properties will help you to become financially independent as this will largely determine what strategy suits you best.
At the same time I would encourage you to hook up with a broker who can provide you with some guidance about your current borrowing capacity. Once you have this figure in mind then you are able to determine what you can afford, which, in turn, mat determine where you can invest.
Above all – step back and spend some time educating yourself. Read books, peruse forums, maybe grab a coffee with a property investor and so. Takign a bit of time to get yourself ready will be invaluable in the long run.
Hi Belinda,
Happy to look at your numbers and make some suggestions – you may find that selling down may be your best option but I would need more information before I can make some definitive suggestions.
Happy for you to send me a PM.
BHP's Olympic Dam Project is now 'uncertain'
See article from the end of July, 2012 expressing doubts about whether or not BHP will commit their $30b
Your loans interest only?
Really need more information. rent, loan, interest rates, any fixed loans, what your loan structure is, rates, strata etc and so on.
Find out what each property is 'costing' you, what your debt/value ratio is and then determine what you need to do.
Suggest you analyse your portfolio in depth.
It may be that a sale is your best option – even with the 'loss' you may incur. Before you go down this path check with your broker as any cross collateralisation may limit any flexibility you may have with fund obtained from sale proceeds.
Michael 888 wrote:Could links, hyperlinks open in a new window please.New site looks fresh and larger font is easy on the eye. Still getting a little
used to the new layout…..haven't been on here here for a while.
By default – in new window. No choice in the matter may be better.
