Forum Replies Created
Hi all,
I am with Alistair with this.
Retirement villas are a niche property and as such lenders generally see them as riskier investments hence their typical LVR is below 80% (having said that things MAY change).
For this reason a retirement villa may make a ‘good investment’ for someone who is wholely and solely chasing some form of cashflow. They do as Alistair said suck up more than their share of equity and I for one question their long term growth potential.
It all comes back to clealry knowing where you are headed with your investment plans and approach and then considering each property in terms of whether or not it is helping or hindering you achieve your aims.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958I smell an ad.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Try here
http://www.diypropertysales.com.au/packages.shtml
Small sign writer would also be the way to go. Also try fsbo on a google search – there are alternatives there.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Delboy,
I have deleted your other threads on the same topic as it creates a disjointed series of responses.
On a side matter I am curious as to why you are keen to reinvent the wheel when BIG is established and up and running and has a group of keen people in coordination roles.
See the following thread
https://www.propertyinvesting.com/forum/topic/20653.htmlIf you are unsure of their credentials i would suggest that pay to go along to the first meeting and make your decision about future attendance after that.
While there is a fee involved BIG has also secured some very experienced and knowledgeable speakers in its time.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Mothy,
Whatever you do do not use your savings as a deposit on your investment property while you have non-deductible debt.
My thoughts are as follows;
1. Put your cash into an offset account linked to your home loan – from the sounds of it you have sufficient savings to cover the interest bill on your home loan. THis means your interest bill will be $0/month and also means that you have access to cash should your world go pear shaped.
2. Set yourself up with an equity loan/line of credit for your deposit and draw your deposit funds from this.
3. Borrow the remaining funds for the IP from a lender. Whether or not this is the same lender as the one providing your equity loan/line of credit will be dependent upon your lending institution.If you really do want to get rid of that non-deductible debt then there is some benefit (from a mindset point of view to doing this).
If on the other hand you are comfortable with the debt level then consider converting this to interest only too and retain your offset account to get these funds for free.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi zaksta,
The only tweak I would make on Foundation’s comment is to write to the OSR and ask them for an answer. Provide your details and reasons and post the letter (email off).
This way you will have something written down that will be a reference point should someone zealous come along in the future.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Redwing,
I would certainly go again if the dates were suitable. It is a course I highly recommend to anyone who is looking at an overall investment strategy and the most effective use of money.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958WA has a seizure of assets law and in a recent case (the outcome of which escapes me) saw a landlord have their property seized because the tenant was growing dope in the house.
According to the law at the time this was a ‘legal’ process. Since this case the law was reviewed but I cannot for the life of me remember the outcome.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958I have a veryt simple (some woould say basic) spreadsheet I use to record income and expenditure for each of my properties.
You are welcome to use it. Drop me an email with property spreadsheet in the subject line and I’ll forward you a copy.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Marty,
John’s comments have stimulated another discussion at https://www.propertyinvesting.com/forum/topic/20640.html
I will lock this one and anyone with comment to make can go to the aforementioned to
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Is this the same Rob Dale?
http://www.couriermail.news.com.au/common/story_page/0,5936,17142604%255E953,00.html
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi WASP,
What you have described is a relatively straight forward approach which is followed by a number of investors.
As for fine tuning the detail here are some comments.
80% Lends
If A and B took out an 80% lend on their existing property it would realise $176K which, after allowing for the existing $50K debt, would provide $126K for deposits on further property.This $126K can be in a line of credit or equity loan and can be drawn upon for deposits and costs for additional properties.
If A and B purchased property at $200K they could purchase and additional two properties (subject to servicing tests) drawing $40K for deposits + $12K costs for each property.
This would provide A and B with a property portfolio of $620K (home + 2 X IP).
Consider the option of being a little braver and borrowing 90%
Using the home as the cornerstone of their investment portfolio they would be able to secure additional borrowings of $198K less the $50K outstanding mortgage leaving $145K for deposits and costs on investment properties. (Note I have allowed $3K for LMI).
Assume A and B were buying $200K properties and borrowing 90% each time.
In this case A and B would be able to purchase 4 properties – each time providing $35K for deposit ($20K) + $15K for costs ($3K for LMI).
The overall effect of using LMI would see A and B now having a property portfolio of $1.2M – including their own home.
Obviously there are individual considerations to be had here as well as LMI policies and servicing calculations to be made that may prevent this from happening.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Edit – Not a broker so take what I say with a grain of salt.
Originally posted by dohicky:I charge my partner rent so I can still claim half of the depreciation etc.
Given you have already received rental income for this property you are now liable for CGT when you do sell. The exact figure will be determined by the various entry and exit costs and then an apportioing process determined by the percentage of floor space that your partner used.
I suggest you download the various tax guides from the ATO and do some further research.
Bear in mind I am not an accountant but………I suspect as I said earlier – too late.
The sydney market is post-boom and prices (as I see it) are either going to stay stagnant or drop in the next few years. So my dilemma is, do I sell now and realise the full capital gain I have made so far, or use the extra equity to purchase one or two more IP’s. This property is negatively geared and will be losing a lot of money when I move out. My partner is not yet at the point that he can purchase a property so we will rent once moved out.
My ‘back of envelope’ calculations suggest your gain will be minimal especially after taking into consideration selling costs and CGT (as per previous comment).
Largely wider Sydney is a blue chip proeprty investment area in the long term. While it may be staggering somewhat at the moment there will be a time into the fture when this property will be worth considerably more than it is now.
Given this an investor, under normal circumstances, and who has considerable equity is in my opinion much better placed for the longer term.
My property investing strategy is to purchase +cf properties in NZ to create some money to live off when I return to NZ.
It seems to me that the ‘Masterclass’ has created a different set of thought processes and at this time you are caught in two minds. For me it is important that you consider your options carefully and do not make a rushed decision based on your recent experiences or information.
As they say in the building game – measure twice and cut once.
Real estate has realtively high entry and exit costs and as such sellign an asset in a ‘good area’ is a questionnable step to take for most investors.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Here is the link to the post Richard refers to.
https://www.propertyinvesting.com/forum/topic/20430.html
Just trying to keep the board ‘tidy’
Derek
Hi Amy,
Only here for a short time so will get back to your request later – in the meantime just a friendly heads up for you. Please refrain from multiple posts of the same question as it clogs the boards up and will make it harder for others to meaningfully contribute and engage with discussion.
In the meantime enjoy the stay and ask your questions (once [biggrin]) – we trust you gain heaps from the experience.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Scott,
Costs total about 5%-6% of your purchase price and cover solicitors fees, mortgage stamp duty, stamp duty, valuation fees, title searches etc
For a deposit you need to allow up to 20% of the purchase price.
This can be reduced to as low as 5% (depending upon property locations and your situation) in which case you will need to cover some Lenders Mortgage Costs.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Redwing,
I am an unashamed growth focussed investor and adopt a buy and hold quality property in quality locations approach.
In addition spare and available equity is being utilised in shorter term investments and helps maintain additional income streams as per Navra.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958I believe this scenario (or similar) is one that can be an effective selection tool when looking for accountants to see whether or not they will cut the mustard as your accoutant.
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Hi Shelley,
Who do I recommend?
I suggest you have a number of worthwhile contributors on this forum who could be of assistance. Read their posts and see which one/s strike a chord with you and then give them a call. You have in front of you a ‘few’ that have put their level of knowledge and demeanour in the public arena.
You will be surprised what can be achieved through email, fax and phone. To me the greater issue is quality of advice and not distance
Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958Originally posted by Shelley D.:I want to buy another ip. Can anyone tell me what my monthly repayments would be on an interest only loan of say $160K.
Debt X Int Rate/12 = monthly repatments.
This will give you monthly repayments – albeit there will be slight variation due to 30/31/28 days/per month issues.
Also, my BANK won’t lend us any more money as we already have 3 properties with them and they say the equity needs to increase before we can do it again. Also, I don’t want to keep all my eggs in one basket anyway. Any suggestions.
This situation is where a broker is invaluable. Especially one that is familiar with the needs of a property investor.
Consider sitting down with a broker.
Consider lenders mortgage insurance across your whole portfolio or parts thereof.
Maybe a different lender with policies more suited to your indvidual situation.
Consider alternative lenders other then mainstream banks.Derek
derekjones1@bigpond.com
http://www.pis.theinvestorsclub.com.au
0409 882 958
