Forum Replies Created
If the property is hsowing signs of 'wear and tear' now definately get an inspection done and then weigh up your options. If the property is showing signs of wear and tear now will it require additional hands on involvements from yourself? Is this feasible?
You may also need to consider the extent and nature of the overall report and, with the contents of the report in mind, consider how readily available suitable & cost effective tradies are.
Don't know the whole picture so some of my comments may be off the mark.
While you will have a mortgage of approx $40K left on your existing home loan I would think that would be very manageable. While your initial aim was to clear the debt entirely getting all but $40K is a bloody good effort I would think.
Who knows what the market will be doing in 6 months, 12 months or beyond. Sure, selling now may mean you do not realise the maximum sale price but markets seem to come off the top pretty much in many parts of Australia so I wouldn't be crest-fallen by what you look like achieving.
I reckon you are confusing the business side of what you are doing with the emotional side of things. To me its a no brainer – sell & re-use funds to pay down the home and consider re-investing the increased equity in your home elsewhere.
As a rule thumb I would not be adverse to selling the IP even if it means realising ~$45K less.
But before I preovide some more thoughts I just need to clarify – are you saying if you sell the IP you'll only be left with a mortgage on your home of ~$40K? If not some more numbers would be helpful.
While waiting for a response – have you factored CGT, GST etc into your calculations?
Hi JAck,
Property is a long term investment and you made your purchase pretty close to Perths peak. Since then the market has flatlined at best and dropped in other parts.
In spite of this it looks as if you have managed to make some profits (albeit paper ones at the moment) in the same time frame. For me I would be hanging onto this property especially if the property is located in a 'good' suburb.
Your overall LVR is pretty good if the valuers agree with your estimations. It would certainly be worth your while talking to a broker about your additional borrowing capacity and a suitable structure allowing you to move forward from here.
I suspect Perth, like many areas in Australia, will be relatively flat and if you are buying property off the shelf it could be a while before thre is a surge in prices. I would suggest looking for something which you can add value too.
As JAc has said for question you have to ask is what LVR can you get on these properties. 90% on a student apartment may present some challenges.
Hi abcd,
Notice the summary text states "our meticulous research' and 'the town is screaming out for' and 'actively seeking better quality housing'
Sounds like a marketing spiel to me.
2500/3000 still seems too small.
LMI being available is a good sign though.
I live 20kms from a major regional city in WA and our local market bears no similarity to the market in the regional city. On this basis I would not be assuming what happens in Rockhampton will, by default, flow onto Mount Morgan.
Just my thoughtsRichard,
It's that Qld broker speak – gets me everytime.
2500 people – too small for me to even look at.
A town that small is subject to the vagaries of the main industry, commercial activity or mine. A sneeze in that sector of the economy could result in a major knock to the town's economy and employment numbers.
Being a small town may also see additional finance hurdles you need to jump through. I woulld susupect mortage insurance is not available in Mt Morgan.
Asea – if the home you are looking at could become an Investment Property at some stage in the future, and replaceed by another home, you may wish to consider an offset account structure.
This will give you some flexibility with your funds moving forward.
HI QM,
By all means speak to a couple of brokers to find out what they suggest BUT do not get two pre-approvals done.
Pre-approvals will result in an entry on your credit records and if you have too many of these other lenders may shy away.
The brokers should be familar with the various banks policies and should be able to determine your borrowing capacity with a high level of certainty. (Provided you disclose everything)
hi Henry,
Try their website http://www.bankwest.com.au/personal/home-loans/home-loan-products
Might give you a heads up on your package.
I use PIA.
Find it pretty helpful.
Check your package details Henry. The packages I am on allow one free valuation (from memory) per year.
Hi Scott,
Adding to your question.
A 'few' years ago I grabbed a 'Become a Franchisee With Us' DVD set from a large financial planning organisation when I had a bit of spare time.
At one point the DVD explained small FP's struggle to get their heads around a broad range of financial products due to compliance requirements. The DVD went on state that because of this the 'smaller' FP's couldn't really provide you with a product or strategy that really suited you personally, rather they provided you with the product strategy that best suited you from their 'available range'. The same DVD went on to say that because of the legislative requirements smaller scale FPs could really only be across ~6 products.
Now I am sure some of this information was a bit of a pitch – but if there is a semblance of truth in them…………………………….
I do admire PIPA and PIAA et al for their efforts to create some accreditation process for propertty advisors. To me it is a step in the right direction – now to go and get that next exam out of the way.
Hi Ashley,
Your are entirely correct – for those who are trying to time their entry (or re-entry) into the market it is too early to tell yet.
On the other hand those who have a more long term view, and can wear a flattish period, the time is probably pretty close to right.
PS like the comment about 'sound bites' – trouble is that is where our (& USA) whole political system is heading at the moment. 7 sec policies and rebuttals. Oh for the good old days when more detail was forthcoming.
Assuming your username relfects where you live.
The first thing I would do if I was in your situation is go and see a broker. Jamie M is in the ACT – you can get a feel for Jamie by his comments on this forum. Recommend you do a search by username and see what you think.
Your third post has a lot of 'IFs' in it. Until you definitive answers to these IFs you could be taking an approach that is not going to work. While everyone talsk about property – property is somewhat of a secondary consideration. First consideration should always be finance. I always recommend people should get the financial picture right before looking at property.
Give Jamie a call.
As for the home V IP debate.
Really a matter of personal preference. Most people could mount a case supporting both positions and in many respects it comes down to a financial decision (IP) V an emotional decision (Own Home). Only you and your partner will know the answer to that question.
For what it is worth the home mortgage is a bigger ask than looking after an investment loan as you don't have any assistance from rent or tax deductions.
Call Jamie.
Couple of similar experiences to yours Kate.
Too early to say yet – Taxi Drivers are still saying dump property so we're probably not there yet
Derek wrote:I wonder if the apparent brickwall and reluctance PIPA seems to faced with is because the FPA is in Shorten's (?) other ear and making more noise.I should clarify that – I don't for one minute underestimate or demean the efforts of those people in PIPA and PIAA but rather the comment is more a reflection of how 'easier' it is for more readily recognisable professional bodies to get into the ears of our politicians even above those with less, but nonetheless, equally empowering right to lobby.
Hi Kevin,
This issue has been a thorn in Margaret's side for quite a while now and kudos to her and the other people in PIPA and PIAA who are endeavouring to get some regulation into the property advisory marketplace. Be great if the two organisations could combine forces and realise their common goal.
I was recently in discussion with a Financial Planner in Sydney and he suggested that the FPA was endeavouring to bring property investment advice into their sphere of influence. Their position, rightly or wrongly, was that property, when purchased as an investment, is really a financial product and is therefore under their imbrella.
Clearly we could argue the merits of the position until the cows came home but I wonder if the apparent brickwall and reluctance PIPA seems to faced with is because the FPA is in Shorten's (?) other ear and making more noise.
I find it very interesting that the Federal Government established the NCCP guideliness under ASIC and yet there doesn't appear to be an appetite to address property investment advisors.
PS. I am a member of PIPA btw – part way through my accreditation.
KevinTurner wrote:However, the period of time to save for a 20% deposit varies between states. Using average incomes and house prices, in the Northern Territorty it takes them 4.6 years. Victorian 4.4 years, NSW 4.3years, Queensland 3.9 years, South Australia 3.7 years and Tasmania 3.4 years.No love for WA Kevin?
Be interested in that figure if you have the number at your finger tips.
