Forum Replies Created
It works in Perth too – more prevalent for public schools as there are boundaries in place.
Private schools are not as confined from a drawing in perspective.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
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Skype – derekjones2113Hi BKim,
Moranbah = a town of 8000 people singly reliant on coal. While coal and related resource sector is good Moranbah is good. When resource sector cools so will Moranbah.
I would also question your six months time frame. Why the six months – are you buying and reselling?
Property is a long term investment – a six month time frame is largely irrelevant in this asset class.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Originally posted by Mortgage Hunter:Originally posted by lstreet:Hi everyone!
Im in abit of debt, and was wondering if anyone had a good strategy to help me get out of debt so i can get my credit rating back so i can INVEST!
lstreet
I have a long document I can email to you. Please drop me an email if you would like to see it.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
simon@mortgagehunter.com.au
0425 228 985Hi LS,
I assume we are talking about the motorcycle debt and not others too – is this correct?
I would recommend you do read Simon’s long screed – it doesn’t fluff around the edges and gets to the point.
Secondly I would also say you need to tackle the job head on – set yourself some little targets (paid $500 off by end of Nov 2006, paid another $500 off by March 2007 and so on)
You could even enlist the support of a like minded friend to report to on a regular basis.
You can even arrange through payroll or direct debit for your repayments to be increased so in effect they become a hidden tax – you don’t see it, you don’t miss it, but it works to your advantage in the background.
These targets need to be achievable so that you do not become disillusioned at the lack of achievement. At the same time if you are really serious (are you?) you can afford a LITTLE celebratory splurge at the achievement of each target.
Really the heart of the issue is how badly do you to get rid of this debt? Are you content to let things drift along as they are?
The reward at the end of the line is a clear debt sheet (the record remains) and the capacity to move forward for your future. To me they are two bloody big carrots.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Originally posted by adamw:We can’t gear up any of the others. The only one available for that is the paid off block of land. This would be taking money from a deductible investment (the new property that has a 6 year rental agreement) to a non deductible one (vacant land).
I realise I am repeating Terry’s pick up – but this could be the solution to your ‘problem’.
If you use the land as security for a equity loan which then funds deposit, purchasing costs. LMI etc then these funds become deductible.
I may have missed the meaning of the comment but there could be room to move at this point.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi Rob,
Why not keep what you have and leverage off your available equity.
As it stands (assuming banks will lend at 80%) you have capacity to release approximately $90K from the unit and $79K from the house.
This equity should provide the deposit of $94K (assuming 80% lend) + $23500 for costs, leaving a total of $51.5K for other activities.
At this stage your total loans are now $652.5K – at 7.1% you have an interest bill of $46327/annum. At the same time your rental income = $25K (excluding block of units as you haven’t identified the number of units)
If there are four units then your rental income will increase by an additional $26K/year.
There are a couple of key points that you will need to research – capacity to secure 80% on existing properties and also on the block of units.
Further the critical point is what are your plans and where are you headed with your investments.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi Rob,
Hmmm – I am a little confused by your figures. Rental income and repayments are not distinct.
I would also add that property values, purchase dates and loan amounts would assist those who are prepared to make comment.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi Grant,
At the end of the day the decision has to be yours.
For me I would ensure that the property fits your plans and not some sales pitch that convinced you that this was the property for you. What is your plan?
Secondly – I would be worried that the Bunbury market has peaked (or is close to peaking) and that the property is going to hold its value going forward to expected completion date. Eighteen months at this stage of the cycle is a long time.
Wil you be able to get back your money if you are required to sell.
Thirdly – Can you afford this property?
Your rent return is less than 3% and as such you will be considerably out of pocket. Even allowing for interest only loans, depreciation, etc the outgoings could hold you back for some time.
if you like I am more than happy to crunch some numbers for you – no strings attached.
Fourthly – check your contract closely.
There are a number of investors who purchased something similar with a development in Mandurah. Included in the contract was a ‘sunset’ clause which said that the deal was off if the project wasn’t completed within a given timeframe. Deposits were taken and all the investors got back when the ‘contracts’ were made null and void was their money. No recognition for lost interest or opportunity.
For me the critical details is what are your plans – don’t become an investors ‘cos everyone is’ – now is the time to be prudent and not to rush headlong in because the papers are full of good news stories.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi Deb,
Try this list:
https://www.propertyinvesting.com/forum/topic/6845.html
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Originally posted by lstreet:This will be the biggest lesson i have ever learned!!!!!!!!!
Hi Lstreet,
Lesson number two – insurance is a good idea.
Lesson number three – make sure you meet loan repayments even when the item of the loan has gone walkies so that such an occurence doesn’t happen again.But having said that congratulations on looking forward – some people throw their situation into the too hard basket and then do nothing.
Sincerely – all the best with it.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Originally posted by Jonathan.Holmes:I have a significant interest in my own home, being worth about $400,000.
I still have an $80,000 mortgage, and with 3 children, find it difficult to save.
I am wondering if selling my home to an investor might be a good idea. Then I could lease back with an option to buy some time down the track. By doing this, I could access my funds as cash in order to finance deposits on other property.
An alternative might be to cut back to the minimum payment the bank requires and save the rest for deposits.
Any thoughts on these ideas?
Cheers,
Jonathan.
Hi Jonathon,
Like Phillip I believe you will be far better off in the long term by releasing the equity you have in your existing home rather than entertaining the possibility of selling and renting.
Saving cash for a deposit is no longer a prerequisite to the purchase of assets. If you have suitable equity (you do) then you can release this for investments.
Using the figures provided $400K property with mortgage of $80K.
As it stands lenders will recognise 80% (you can go higher but that is another story) of the value of your property (in your case $320K) then reduce this figure by any oustanding mortgages (in your case $80K) leaving you with the difference (in your case $240K) being equity available to fund other investments.
This $240K will allow you to borrow plenty.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi Jonathon,
We don’t permit advertising and as such I will give you the benefit of the doubt. You can post the details but I would recommend you refrain from identifying the location of the property otherwise someone, less scrupulous, may sneak in before you if the property suits them and their needs.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Originally posted by queengucci:Thanks Mark!
I will sell the ones taking money from my pocket and keep the others.Hi QG,
I believe you need to rethink this as it is possible that the ‘one taking money from your pockets’ is making bundles in capital growth and as such may well be contributing considerably more than it is ‘taking’
If this is the case (without number difficult to be definitive) then the challenge for you is how to leverage off the gains, sustain the properties and so on.
I prefer to look at my collective investments and income (property, share funds, developments, tax refunds and wages) as a whole rather than in piecemeals. This way I retain a bigger picture focus.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Originally posted by skyh:can we use line of credit for our first IP? given that no home equity is used, i.e. using the IP as the security
A line of credit is secured against a recognised asset such as an existing property.
or we must either choose P+I or IO for our first IP if no home equity is used?
After you get the loan whether you choose to pay P and I or I/O is up to you.
If you intend paying the property off then take an I/O loan (most investors do) and make additional payments into an offset account where you can access them later without compromising the tax deductibility of the additional funds.
As with all matters pertaining to loans – use the services of a licensed broker. They can access a number of loan packages rather than being hamstrung by the particular bank you deal with.
The different servicing calculators they use can make a huge difference to the end result.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Originally posted by elkam:Hello Derek
Surely that means:-
a. It’s legal to have a cooling off period put in the contract.
b. As there is no cooling off period defined in law, if you don’t put it in you can’t just change your mind.
Or have I misunderstood something?
Cheers [smiling]
ElkaHi Elka,
There is no legal requirement for a cooling off period as is the case in Qld (where 5 days is standard fare in all transactions excluding auctions).
If however vendor and purchaser want to include a cooling off clause in the offer and acceptance then there is no stopping them.
Mind you I cannot see a vendor inserting said clause off their own bat, nor could I see a vendor acception such a clause if the purchaser inserted one. Especially not as things are at the moment.
Finding a property and getting an offer accepted ahead of others at a reasonable price seems to be more the issue.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi Istreet,
I’ll cut straight to the heart of the issuee here which methinks you are avoiding – why is there a ‘black mark’ on your credit rating?
As dohicky indicates there are blackmarks and then there are BLACKMARKS. The nature of your black mark will really determine what you can and can’t do.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Originally posted by crashy:3 years ago I was here warning that there would be 30% falls in Sydney & melbourne…..I was laughed out of town.
In todays paper there was an article showing how one Sydney property bought for $450k in 2003 just sold for $250k……..a 43% fall
By comparison, the all ords index, which I was hilighting at the time…….went from 3000 to over 5000…….a 66% increase
http://www.posigear.8k.com
Positive Geared Share InvestingHi Crashy,
That comment is about as valid as me using OneTel as a reason why the share market is a bad place to invest.
ABS stats have identified that the yes indeed the Sydney market did fall in the last twelve months (I know it doesn’t include your representative sample) but wait for it – it fell by 0.5% over twelve months.
Up 1.4% in last quarter – but of course that is before the ‘crash’
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi Nathan,
There is no requirement for a cooling off period in WA.
See http://www.docep.wa.gov.au/homebuyers/downloads/HBSG_Section_2.pdf
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi all,
Some interesting thoughts and comments here.
There are a number of points that need tobe made in an effort to put some balance in this discussion.
We have a sensational headline that immediately attracts the readers attention. The essence of the story is based on the results of a limited number of MORTGAGEE auctions where prices fetched were less than those realised in 2003.
Now I don’t know about you, but I wasn’t aware that a small sample of MORTGAGEE sales reflected the whole Sydney market. As a percentage it is probably too small to even calculate – I am sure suitably qualified statisticians would have a field day behind the mathematical statistical reliability of such an article.
Let’s also consider that the ‘headline’ example also required $40K in the way of repairs. Now $40K can buy a lot of repairs in the right hands – which then leads me to wonder how ‘appealing’ was the property to the wider market in it’s selling state. Oh, don’t forget, it was a MORTGAGEE sale with the owner struggling to meet repayments – I guess that means they didn’t ‘look after’ the property either.
Then we read a little deeper and notice that the previous buying prices were all realised in 2003 – now for those of us who were around at the time would clearly remember that was also the time we had all of those good news stories, renovation shows with large profits being made, etc etc etc. Of course this attracted poorly educated investors into the market in the belief that they too were guaranteed to make as much money as every else.
Trouble is irrational behaviour leads to individuals paying well above what a property is worth at the very peak of the market and when the inevitable pull back occurs they are left with negative equity – sounds like Perth at the moment.
I fully appreciate that the Sydney market has been in the doldrums over the last three years but let’s keep these types of articles in perspective.
In the cycle leading up to the peak in 2003 the Sydney market grew by 135% (according to Residex) since then most of the figures I see indicate a total drop in median prices across the whole of Sydney in the vicinity of 12% (give or take a little – I don’t have the figures at hand).
The current circumstances are part of the normal cycle – if you subscribe to the normal cycle theory.
Quite frankly if people make investment decisions based on what they read and hear in the popular press they should be doing something else.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi QG,
Phoning the ATO for advise is fraught with danger – do it twice nd you could well get two different answers, especially in areas more complex.
CGT, with subdivisions included, does become a little more complex. I suggest you search the ATO website. There is a CGT guide available for download which does include, as a fully worked example, a subdivision scenario.
You can minimise CGT by incurring CG in a no or low income year. Of course there are ways that you an legally reduce your taxable income which then flows on to reduce your subsequent CG.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113Hi Porsha,
Remember to keep a rational perspective on what you are doing, in essence do not become attached to the property.
At the moment it is a seller’s market in Perth and vendors hold the upper hand in negotiations (at least with those who are attached to a property and let emotion get in the way).
Looking elsewhere is not a bad move on your part.
Derek
derekjones1@bigpond.com
The Investors Club http://www.monopoly.tic.com.au
0409 882 958
Skype – derekjones2113
