Forum Replies Created
I recommend you speak with a broker.
Not only will they save you a lot of legwork they can also 'assess' your situation to see whether or not borrowings are possible and, if borrowings are possible, can get your structure right moving forward.
Hi Merahma,
Key issue is what do you want to learn?
Property investing is a large topic and covers much territory. If you can provide some details on what you want to learn then someone may be able to make a suggestion for you.
Kambalda is too small and dependent on too few minerals for mine. You also need to find out how your lender appraises Kambalda – see if mortgage insurance is available on a property in Kambalda. Even though you may not be looking at a +80% loan this will give you a good indication of bank perception.
Know of someone who bought into Kambalda and then struggled to offload the property when he tried to sell.
If you do end up investing in Kambalda make sure you maintain an active hands on approach and keep close tabs on mining operations in the area.
Hi Becshan,
Sounds like the poor auction result gives you a good 'market indicator' – use this as your offer price starting point and justification for any negotiations moving forward.
Make sure you organise your conditions thoughtfully and keep their timelines short. As per RP's comments 48 hours for acceptance would be suitable.
Nothing ventured – nothing gained.
As an aside – have you done good research on your local area to make sure the investment will achieve your investment goals. Sometimes investors decisions can be coloured by the 'local' factor. Remember this is a business decision you are making.
Buyer has probably been to one of those courses which tell participants to get long settlement and early access so they can make some money.
Try to keep a clear head about this whole matter – and get your solicitor working for you.
I would start by writing down all the questions you now have, including worse case scenarios, that this situation has occurred.
Then meet with your solicitor and get responses from your solicitor. Make sure you make notes during conversation.
Subject to the outcome of this conversation consider using a different solicitor – this one seems to be out of their depth. Also speak with a property lawyer experienced in these situations.
Things may work out OK in the end – you may just need to take some steps to secure your interest in this property.
PS – Agree with Tracey – you need this sale to be water tight rather than pulling out. Sounds like the 'work' done will make the unit less 'sellable' unless everything is made right.
LeonR wrote:Unless you mean you never buy an apartment at full price, compared to developing/buying apartments at cost price?This – must also state when I see the descriptor 'apartment' I automatically think small high rise. So bit of that thought process in my initial response too.
Hope that clarifies things.
Hi AVS,
$400K will be limiting, as far as houses go, within reasonable distance to Perth CBD.
If houses are really your preference then I would explore suburbs along the railway lines. Dovetail this with major shopping centres, and employment nodes and you'll be pretty safe.
Plenty of one bedroom units under $400K but I assume, by your comments, that this is not your preferred investment vehicle.
Might take some time and you may need to relax some of your parameters to meet your investment goals. Sometimes the time is part of your initial investment.
With all due respects there is so much missing/wrong in this post it defies some basic investment logic and experience.
jmsrachel wrote:That's a real shame. You are one of a few people that can actually explain a concept without causing a headache. Looks like i will need to look up to Boris for answers.Hi Rachel,
Don't forget the big picture on your journey.
Do you think Terry's advice is 'worth' more than a Melb – Syd airfare.
I know people who fly across the country for 'good advice' – might be the best money you ever spend.
Hi JP,
Never bought one – probably never will.
Being OTP there will be significant financing issues you will need to consider as the vendors and their contract will require you go unconditional within 30 days (or similar) BUT the bank will not provide unconditional finance until they can value the property – and this only happens right at the end when the property is completed.
In between time you have either gone unconditional or at the very least signed a contract which you haven't been able to fulfill and are therefore at the vendors discretion to re-sell as you haven't met the terms and conditions of the contract.
Another issue is that estimations for body corporate and rates provided by the developer tend to be on the low side so the purchase of an apartment appears to be more attractive to prospective buyers. When the property is completed the strata fees, in particular, get significantly ramped upwards thus making the investment less attractive.
The value of your apartment will rise and fall with the market. There is not a lot you can do to influence the value of your investment.
Some quick ones off the top of my head.
Not a broker so take what I say with a grain of salt.
An early in the morning post but things I look for are:
1. Serviceability – this is the biggest for me.
The other factors considered, and in no particular order, are:.
2. Loan to value ratio on offer for the property being looked at.
3. Length of interest only period.
4. What is involved extending interest only period – some banks do a full review others just press a button.
5. Interest rates.
6. Lending to suit the postcode I am buying in.
7. Line of credit policy.A good broker should know this stuff like the back of their hands – they eat it, drink it and breathe it every day.
Freckle wrote:Someone can correct me if I'm wrong but I was under the impression that with regard to property there is a legal requirement to disclose anything material to the sale and that "buyer beware" is not a defense. In contract law (tort) deliberately misleading a buyer would be considered as reason to seek damages and have a sale reversed.Correct – anything materially affecting, or likely to affect, a purchase needs to be disclosed to potential buyers.
brizziegirl wrote:Two years ago we refinanced and moved to Commonwealth Bank and created a LOC. We have used 2/3s of the LOC and we previously both worked full time making $100k and $50k. Now we make $100k between us.When assessing your serviceability the banks will assume your LOC is fully drawn and their calculations will be based on a debt of $100K and not $66K. Clearly this is a knock on any serviceability calculations as it relates to LOCs. One of the issues with creating large LOCs is that they can really knock your servicing for future loans. That is why it is important to have a great broker working with you.
brizziegirl wrote:A mortgage broker has suggested getting our two properties re-valued. I am concerned if the properties value down rather than up, will the banks look at our current structure and want to change thingsBefore your broker submits anything you need to do a lot of research (and your broker too) to make sure your existing properties have not retreated in value. If your security level has declined then the banks may well ask for a reduction to your LOC or worse some money put and so on. Tread very warily with this one – your broker may well be able to do a lot of behind the scenes work without submitting a formal application and bank valuation to the bank before you consider further.
brizziegirl wrote:or can we ask for a valuation and banks generally don't consider a review of our finances, or is it a possibility.Some bank professional packages allow for free valuations – but given your situation I would tend to let sleeping dogs lie at the moment. That is unless your research gives you a good indication of a positive outcome for yourselves.
brizziegirl wrote:Also, if they value up more, can we ask for an increase in the LOC even if our income has been reduced or will serviceability be an issue? (We did ask for a $40k additional loan for a garage about a year ago and were told by the bank we only had about $40pw spare on their calculations, so the answer was no and that was when we both worked full time). Any input very much appreciated.The reduction to your income will, in all likelihood, mean you will not be able to borrow additional funds. The counter to this is that interest rates have reduced in more recent months so this will go some way to improving your serviceability if you remained on the same income. But based on the remainder of your comments I would suggest any increase to a LOC would be unlikely.
Having said all of that I am not a broker so ……………………………………….
One question for you – is it wise to increase your LOC at the moment given interest rates are extremely low and any rates rises in the future may put additional stress into your situation?
Reckon you are better off with someone who owns and runs the business and who are also property investors themselves.
Plenty of brokers on here who have gone on the line to share their knowledge without them being 'exposed' for a lack of knowledge. I'd give them a call first.
Close to the city – has Great Eastern Highway as its major access road.
Currently undergoing major widening and realignment.
Would endorse WI comments – much of Rivervale has been targetted by developers and suitably zoned property will attract a premium. Mixture of old and new property in the area.
wakebrownb wrote:Recently I have read quiet a bit about this not necessarily being the best option for long term wealth generation.Hi Wake,
Cashflow V capital growth is one of the never ending property debates.
People who tend to follow one strategy over the other is often in a position to make a good case for their preferred strategy and, at the same time, raise doubts/issues about the 'other' strategy. often these statements are made based on the extreme end of the spectrum. For example regional towns have no growth or negative gearing costs too much.
In my opinion is that each strategy has their place and it isn't a case of either/or – it is more a case of working our what your situation is and working out which strategy is best suited to you. Bottom line – you'll probably find that a more of an eclectic approach is most appropriate with as someone else said 'balance'
Just remember your point of balance may well be different to mine and so on.
Shiny_Suit_Man wrote:However there maybe a fair bit of stuff in there that you might not understand, but thats what mums and dads are for..Not necessarily so.
Sometimes parents are the last place you should be looking for property advice from. If your parents are into property or actively encourage their kids to spread their wings then they may be a good sounding board if not then you may need to look elsewhere; a close family friend, trusted neighbours etc who are into property.
I would also add http://www.rba.gov.au/ to the list. Nothing beats reading transcripts or hearing various speeches, meeting minutes, market & economic reports from the national decision makers IMO.
Also look at SQM who do a weekly report/newsletter thingy at http://www.sqmresearch.com.au/news.php
RP Data do a weekly blog worth subscribing to at http://blog.rpdata.com/
REIWA Market data – http://reiwa.com.au/Research/Pages/Market-indicators.aspx
WA Planning Department – http://www.planning.wa.gov.au/
