Forum Replies Created
Hi Mant,
Just adding my congratulations and a few thoughts – some of which have already been stated but are worth repeating.
Congratulations on your purchase – however I would be wary of throwing all of your hard earned into a single industry town. Without knowing where your property is this may be an irrelevant comment.
The second property may not be as far away as you imagine. Talk to an investment savvy broker and they can crunch your income figures and see what your borrowing capacity is.
Be aware this is only your borrowing capacity – there are other matters to consider including, your state of mind, risk tolerance levels, budgetary contraints, what you investment goals are and how you will use these properties as part of your wealth strategy.
Given you believe that your equity levels are limited it may also be time to plough some cash into an offset account or redraw home loan to reduce your non-deductible debt levels.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Use google to find the various calculators that can be found on the web Eg. Victoria Land Tax (etc) and you’ll get the information you seek.
Just be aware that land tax is based on the unimproved land value and not the value of land and building.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Originally posted by marliw:Boy I’m really envious that you are only 25 and know about forming a trust structure – how do I do that by myself and is it complicated/cost much?
MarliSuggest you grab a copy of Dale Gatherum-Goss’ ‘Trust Magic’ for about $99 it will get you started in the right direction.
Dale is based in Melbourne but his book is relevant to all of Australia.
Then go and see a trust savvy accountant and talk about what it is you want to do, your situation and so on.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi TA,
I am sure you have done this already but the Foreign Investment Review Board is the government body that polices such purchases.
Check their website out for some more information. There are a number of downloadable forms that may be of use to you.
http://www.firb.gov.au/content/real_estate.asp
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi MLV,
I assume Simon is taking an Easter Break and is on holidays.
As I understand it ASIC and Derivex are still in discussions (I do stand to be corrected) and my take on this is the longer the ‘discussions’ go on the less chance there is that Derivex will be able to market the loans.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Mike,
Certainly speeds up the process as it maximises the returns on the assets you own either partially or outright.
If you were saving cash for a deposit you only get to ‘save’ that part of the dollar that has been left after the ATO and your spending hanits have taken their little chunk.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.<u><i>Originally posted by ian_from_brisbane:</i></u>
And yes it is up on a hill just a short walk to the water’s edge.No that isn’t a hill – that is the reef at low tide[biggrin]
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Originally posted by Ambo72:On reading back on what I said originally, I forgot to mention that we actually had a contract for $175 which we had signed.
I assume you were the only party that signed the contract.
If this is the case and the vendor is yet to sign the contract it still means ‘diddly squat’ – a contract only becomes binding when both the vendor and buyer sign and agree to all clauses.
Well the way the agents work in this particular town is that they want you to sign the contract first to show the vendor that you are serious and entice the vendor to sign [eh]. Sounds dodgy, but this is the way all the agents we have spoken to do it in this town.
This is not unusual – the vendor publishes an asking price and the buyer provides their desired buying price. Any negotiations are triggered by a (would be) buyer completing a contract and the agent providing this to the vendor. The vendor can reject, agree or counter offer until you either agree or walk away.
I would get control of the agenda here by using a clause/condition along the lines of this offer is only valid until ‘XXX’ (you insert time and date here that suits your agenda)
Remember you are a buyer who could buy anything that is currently on the market anywhere – whereas the vendor can only sell this one property. In essence you do have a large advantage provided you do not get attached to this particular property and can be ‘business like’ in your negotiations.
Personnally I don’t like doing it this way and would rather negotiate a price before signing anything, but as I said before we are still learning the in’s and out’s of investing.
See above – negotiations should be done through the offer and acceptance or contract of sale so that written agreement is reached where possible.
Hope this is of assistance.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Originally posted by Ambo72:We have had a house under contract for about 3 months,
The house is on the market for $185 K, but the vendor verbally accepted 175 000 on a 60 day settlement
The issue is, that we have just returned from holidays to find a contract in the mail,
Hi Ian,
I stand by my comments that you have let yourself down – there was no exchange of contracts until you returned from holidays. In effect for three months all you were was a hot lead – nothing more.
If the vendor had accepted your offer a contract would have been exchanged and signed off by both parties. Conditions about length of settlement and ‘issue resolution’ could have been worded into the contract.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Bonnie,
From the WA tenancies Act.
42. Owner’s responsibility for cleanliness and repairs
(1) It is a term of every agreement that the owner —
(a) shall provide the premises in a reasonable state of cleanliness;
(b) shall provide and maintain the premises in a reasonable state of repair having regard to their age, character and prospective life; and
(c) shall comply with all requirements in respect of buildings, health and safety under any other written law in so far as they apply to the premises.
(2) In this section “premises†includes chattels provided with the premises (whether under the agreement or not) for use by the tenant.The ACt itself is not clearly worded and is open to interpretation. My thoughts are that the owner has some responsibility to ensure the chattels are in good working order too – the airconditioner is their now and needs to be maintained by them.
I would not accept the exclusion clause and suggest that they contact the air con people and speak to them themselves.
For what it is worth I suspect this is small picture focussed investor and their chances of long term success are somewhat compromised. There are more important things to be worried about than servicing costs of an air conditioner – given that when they exchanged titles they had opportunity to hold back some funds in lieu of this matter being resolved.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Crusader,
The WA REA Tenancies Act is downloadable – forgot the weblink.
As Kay said this experience is the price of DIY property management. For me I prefer to let PMs do their job – I just manage them closely.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Originally posted by tancas:I am thinking of selling my current PPOR.
I am wondering if we have to pay capital gains tax and on what amount – the sale price minus the original purchase price or the sale price minus the amount owing to the bank?
If the property is your PPOR it is CGT free – plain and simple.
In your case it would seem that you had another PPOR prior to this one. If this is the case the first property is CGT free for the period that it was your PPOR and any gains are apportioned over the length of time you owned the property.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Ambo,
The agent is conning you and you have let yourself down too.
From your post you indicated that the vendor accepted a verbal offer. As you haven’t got anything in writing (until now) you weren’t even in the door. The agent and vendor were dangling a carrot while they sorted out the ‘issue’
Grab the contract – write your offer up at a figure below $175K and take it from there. You are letting yourself be manipulated at your cost.
As for the area still booming – yeh right!
The price is determined by a vendor and buyer agreeing on a price that suits both parties. It is not determined by one party or the other.
Welcome to the life and times of a REA who is looking after the vendors interests – NOT YOURS.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Chincho,
From a servicing and equity issue the information you have provided is somewhat limited and as such it is difficult to accurately determine whether or not you have the capacity to borrow additional funds.
Even if you could I would question whether or not it is the right course of action anyway. By your own admission you cannot save move or direct the surplus towards reducing non-productive debt. Without this habit under control you could find yourself in a a situation many of us wouldn’t liek to find ourselves. The key to successful investing is to get this aspect of your life ‘under control’ too.
It would be very prudent for you and your wife to structure a accurate, yet liveable, budget. We adopted this practise sometime ago and through this have been realistically reduce discretionary expenditure to a sustainable level such that it allows us to invest in growth properties in preparation for our post working life.
Without knowing the area your current Ip is located in it is difficult to determine whether or not it has increased in value sufficiently enough to realise sufficient equity. Th efact you borrowed 95% makes this set of circumstance even more difficult unless you are either prepared to pay LMI again or the property has gone ballistic.
As an accountant it would seem that you would be hard pressed to go past Dale Gatherum-Goss – http://www.gatherumgoss.com – there are a number of successful investors who use Dale’s services. Bear in mind most accountants are only qualified to ‘do your books’ – financial advice as per investments may be outside the qualifications of your current accountant.
I always use a broker for my loans – they can access the producst from a range of lenders and find a loan that suits you rather than making you fit the loan product. A borker who is also an investor is an even better source of advice – as they will be aware of your needs in the long term and can assist you to get the structure right at the beginning of your journey.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Conley,
Give Patrick Thatcher a call. He is based in Subiaco and can be contacted on 93809533.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Originally posted by Mortgage Hunter:There is no simple answer to this.
Work out your goals and devise a strategy then get to work is my advice!
Also be mindful of your budgetary limitations – I would also buy as well as I could as close to the city where long term history is on your side.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Originally posted by holo:I have been toying with the idea of increasing the investment property loan to reduce the non deductible debt of our own home loan.
This strategy in itself will not reduce your non-deductible debt as the ATO will consider the redraw from your IP as being a new loan and as it is being used to pay down your home loan these borrowings are non-deductible.
There may be opportunities to sell a share of the first property to your wife/you and then to use the sale proceeds to pay down the home. This strategy needs to be considered in line with your income levels, risk exposures and so on.
To see if this is a good idea I was toying with paying the $195 for the Chan and naylor financial health check. Anyone used it before or can anyone offer any general advice.
CN did a financial health check for us. While they didn’t provide us with anything new their analysis of the benefits (or not) of a trust for us was useful. Am currently considering using them as my accountant despite them being in Sydney and us in WA.
Obviously I can and will discuss with my accountant but want to learn more about it myself. As you can see I am fairly ignorant of these mattters !
Be aware that your accountant should have similar investment ideals as you.
A non-property investing accountant dealing with a property investor is less likely to fully conversant with the laws as they apply to property investment.
This is where CN may be of benefit to you – Ed lectures to the ATO and other accountants around Australia.
Chris Batten is used as a reference on Ed’s brochures – Chris is no slouch either.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Marisa,
We just sold some full turnkey H and L in Merriwa. Estimations are that the rental returns will start around 4.5%+ and rental demand is strong in the area. Given that the purchasers are seeking growth the rent return is of secondary consideration.
We managed to secure land for less than the $150K you are looking at.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.HI Cutegirl,
If you are going to be a successful property investor you need to approach paperwork with a ‘professional approach’.
Ensure all pieces of paper are filed appropriately, keep full and detailed records for the required number of years and engage a savvy accountant who will ensure you push the envelope while remaining within the ATO legislative requirements.
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.Hi Steady,
Give Ed Chan a call http://www.chan-naylor.com.au
Derek
derekjones1@bigpond.com
0409 882 958
Property investment advice and researched property in quality locations available.
