Forum Replies Created
Im sorry but i have to ask. Why the property in north nowra. The rest of your portfolio is very impresive so nowra looks out of place.I am not nocking north nowra as i have lived there my whole life and it is a great area.May i ask with out getting too personal. Are the properties cashflow positve,neutral or negative geared.I am curiose as they would have to pull good rent otherwise you must be paying a fair amount of money to hold them.Hope thats not too personal.[biggrin]
I am by no means a expierianced investor but i have taken the plunge recently and have this to offer.
Get financial advice
Study the market and get to know what is happening
Base your calculatons on facts not assumptions
Drive around and look at possible IP’s
Go to lenders and find out what they require for approval
Shop around for lenders.
Once you start doing the above you will find you start gaining momentum and things will start too happen.Well i was a bit scared to read your responses but they werent too bad.
First qld007. The IP is in my name only so neg gearing is more affective.Baba. I found out the evils of x’sing on this site. I have discussed it with my lender and he said he can fix it this year for me. Im sure they may be some cost involved but if it protects my assets its worth it.You are right ,there is quite a big short fall but i have seen my tax accountant with the details and he as indicated i should get around $150 pw back maybe more(including my normal return) so that balences it out a bit better.
La.aussie I will be getting a quantity surveyor in after settlement. The house was built in the 60’s or 70’s but it has had a major reno of over $100’000 including new rooms, replacement of exsisting walls and a completely new roof aswell as other improvements
The property is only 500 metres from the cbd in a street thats becoming trendy with restraunts and cafes as well as tastefully reno’d older style houses. so it should show improvement in prices over the next few years.
Thanks for the reply’s everyone
Forgot to add. I plan on using the rent plus my tax return(expect around $150 pw). Plus what ever is required from our income to meet minimum repayments on IP. Should be around $50 bucks from our salary.And then continue to pay maximum off our PPOR. We should still be able to double the weekly repayment maybe a bit more.
Originally posted by kum yin lau:Hi again,
1st, Navyboy, no sense selling to buy again. Either don’t buy, save into an offset account or buy either to build or a new house ready for immediate rental. Your 2 IPs are low priced, sell & the agents/tax man get all the profit. If your tenants are not unhappy, why spend extra to get almost nothing in return? Renovate only when you have a vacancy.Buying land to build may be difficult for you because of distance. You might want to use an agent. Pay about $6000.
Davo76 is really who my return post is for. I was in a similar position to you not that long ago. Except that I was only $10K short on my $240K PPOR. I borrowed $200K to buy another house price $175K. Rented out PPOR and got to work chipping away at the mortgage.
Read this: I was on a loan @8.5% with a 2 year balloon repayment.
Dacium will think I was mad. I wasn’t. I was very confident I could save $100000 in 2 years.
Davo76, what concerns me is that you bought at the plateau of the property boom. When I bought, I was absolutely certain that houses could not go down any further. They had languished for 10 years! I had been looking for 7 out of the 10 years.
We are in a very mature phase of the property market. Davo76, I may be too longwinded & saying something that you already know. Do protect yourself by cashing up asap, in an offset account sounds really good.
May life bless you because you’ve taken steps to financial independence. Good luck,
Kum YinThanks kum yin. You say cash up?. Do you mean pay more off?
I am paying max off my PPOR which has a offset account. But im paying min off IP as i have a high wage and want too negative gear.If me and my wife meet the minimum payments alone it leaves us over $900 per week plus rental return so cash flow is not a problem. I bought for two reasons. Forced saving as we waist alot of money and to minimise tax.I have a appreciating asset worth $80,000 which im happy to pay into my PPOR but its value has doubled in one year so im waiting for it to go higher before i sell so that would reduce our PPOR loan to $100,000.WE bought or PPOR before the boom but the IP after although the market did drop and has now shown signs of improving.We have good equity in our PPOR but except we will have to wait a few years befor we see a gain on the IP. Sorry for hijacking the thread.[glum]To me it depends on how much of a main road it is. If traffic is passing at high speed and its more like a unatractive highway road side then i would say it will definatly lower prices.But if its a major road going into say a town but still has some attractive features etc then it might not. Theres lots of variables. My ip is on one of two major roads going into a town. Although the road is a bit busier than surrounding streets it does have a certain character and the speed limit is only 50.It has older homes most of which are freshly renovated building the charactor of the street. I guess it depends on your area.
Originally posted by dacium:YOu make $63k and have a debt of $293,000???
Man you will be close to bankrupt is interest rates go up. How did you get the bank to loan you so much money? Just rent those places and you should be fine it you can afford the extra repayments. Else I would just sell one and pay off the other.
I must be missing something becouse i dont think that is too bad.He owes just under $300,000 on two properties which he could rent out at around $300 to $350 PW. Thats not bad.
I owe $200,000 on my PPOR worth $345,000 ans i just borrowed$300,000 for a IP which is 100% borrowed.And i only earn a bit more. Maybe i have over commit too[blink]Thanks, thats the point i was trying to get at. Also what happens when it is already part depreciated. For example the house i am buying had many of its depreciatable items fitted new in 2003.When i get a quantity survayor in how is it worked out.
Originally posted by depreciator:Devo, I’m not exactly sure what you’re asking.
If you have, say, carpet and you depreciate it, when the value of the carpet gets to zero, that’s it i.e. you’ve written it off in full and there is no more to claim on that carpet.
Then when you put new carpet in, you’ll start to depreciate that.
ScottTax Depreciation Schedules
Australia wide service
1300 660033
[email protected]
http://www.depreciator.com.auThanks for the reply. Yeah the now or never attitude affected me too as i dont think the area is getting any cheaper.And with its new proximity to the nations capital after the road is finished as well as the exsisting navy base. It has a lot going for it. Its a beutiful area on the coast including jervis bay.With coastal villages and a mountain range all around its a top spot. It has a lot more growth ahead of it i believe.
Actually your calculations have lost me.I have gone to my accountant with the details of my property and my salary. He said with depretiation,Loan interest,capital works right off etc i will get back about $6,200 or $120 per week safely possibly more plus with my normal return im willing to put back into the property instead of wasting($3000 or $60 PW approx) which is a total of$180 so
All up expenses $491
Rent+ tax= $440
Left over = $51. Is that right.???
Truth be told we could pay $500 extra and still live easily. AS far as house value going up.I except that prices may not move for a long time.I bought the property for tax minimisation first.Capital gain second.If i can get this property costing me minimal money per year. I am happy. Thats what i wanted and hopefully see a capital gain above cpi in the future.As far as paying extra off.We have a PPOR that we still owe $200,000 that we are currently paying off at $1000 a week to get it down.I want to owe more on the investment for negative gearing so all extra payments go of our PPOR.
If i find that the IP is a bad move and we struggle due to our situation changing we could sell our PPOR, take the$140,000 profit.Move into the IP which is nicer than the house we live in.Add the two rooms sell and make a profit(what ever that is).Or if we are really in fiancial crap we could stay in the IP,i have another asset worth $80,000 and climbing by the day And pay that money of the loan. That would put us in the IP town house and only owe$87,500. So i think we should be ok.Thanks for your imput dacium. It may not be the best investment option but im in and ill make the best of it.Yes you are right with those details. although the lock in period of five years and interest rate will not be fixed until settlement in about two months so they may be able to be changed.When you say untangle do you mean the five years or the x ,ing. I was under the impresion that fixing the interest rate for a longer period was the go for IP.As for the crossing of the loan. Trust’s etc were only something i discovered after finding this forum but unfortunately the deal was done so its something ill have to fix down the track or if i swap lenders.
I am with one of the big four and past problems have made them give me some good options. But if i want to change lenders in say a year.How hard is it to go to a new lender with all your banking and two property loans and ask for it not to be x,ed.
As far as x,ing the loan i didnt do it so i guess thats my first stuff up in property investing. The loan is locked for 5 years. Is this too long??. The wife is working but loan is in my name for negative gearing.My ideal situation would be to renovate using my building skills but the wife is against it. She only likes nice shiny houses unfortunately. that is why i picked a renovated house in a nice cbd area with room to extend fairly cheaply.Extending from 2 bed to 4 bed is only a idea and returns would have to make it worth while.I am basically sitting on it for 5 years and then re avaluate my situation. By then i want my PPOR paid off and either some of my current IP paid of or buy another one depending on the market.Does it sound like i am heading in the right direction
To me when you add the rent and tax return that gives about a 7% return.(although i do need the tax portion to get it up there). Is that right. We also bought the property to maybe move into a few years down the track and add two bederooms and a ensuit to increase value.(slab is already prepared for extention by old owners)Having a carpentry background means i can do this for under$30,000 and that makes it a four bedder town house in central town.I honestly believe the property would be wortth around $400,000 with the added bedrooms and with a improved market maybe more.
I just read todays tip on structuring and it kinda explained enough for me.I understand the protection side of it to protect you and your assets but as far as the tax minimisation i feel that its not as inportant to me. On a positive cash flow property, yes a trust etc may be the go but sinse mine is negatively geared its not as important to me. Does this sound right.
Hi all. If you are talking about the cost of the reno . Then in my area(south coast nsw) You would allow about $1,200 per square meter maybe $1400 if the reno is out of the ordinary with better quality fixtures etc.I am having a similar dilema. The market in our area has cooled and has been flat for a year or so thats why i bought recently.The Area is flooded with your standard for bedroom double garage with a huge estate devoted too these. They are suffering the most at the moment. This is why i went a different direction and bought a town house about 500 meters from town cbd that is heavily renovate. It truly is a amazing house almost too good to rent. It is however only a two bedder.I am toying with a extension two make it a four bedder. But i am not sure there is a demand for a big family house in the cbd.So now im thinking a self contained granny flat may be a better option. I guess my point is look and see what has the higher demand in your area and if your expected rental return makes it viable then i guess nothing is stopping you.
PS IN my opinion you can buy a house at the wrong time and loose money but money spent on a exsisting house in the right way will always add value.You are worrying about the same things i do and i get the feeling no one will be able to tell you something to make you feel better.Its a gamble on something that we are uncertain about.If realestate was certain we would all be rich.I too would like to know if some point in the past we have had similar unaffordability in housing and if so how did the market recover.
PS Exchanged contracts on my IP yesterday and found out today that my place of employment may be closing up in two months.Im in a specific feild and more work means moving interstate. Not a good day for me.[angry2]After reading those articals it freaked me out a bit so i crunched the numbers again on mine
TOTAL COSTS
loan repayments,rates,insurance, $455 per weekINCOMMING FUNDS
rent $250 Tax $180 Total $430 per weekThat leaves me $25 out of pocket and with future rent increase potential and tax fine tuning it will have no financial burden on me so to me it is a good time to buy and hopefully see a capital gain down the road. I guess the trick now is you cant just look at areas as a whole you must look at specific bargains to make money or atleast not loose any over the next few years.
PS >i have little to no investment expieriance its just what i am picking up on this site.I wonder the same thing.If housing is so unaffordable for middle australia. What chance do we have of a housing recovery. Recovery to me means increase in house values but this will make housing less affordable and therefore less people will by so to me that would drop prices. My head hurts[glum2]
Yeah thats my point. If a property i have is costing me around $100 a week ( ONce all costs and rental return are considered).Which im happy with because i have the property for capital gain reasons not pos cash flow. Would then buying a positive cash flow property that gives me $100 a week free and clear after all costs considered make sense. My tax should be close to the same and one property looks after the other.The above situation would only make sense if the negative geared property is expected to see good gains in the future otherwise you may as well buy two pos cash flow propereties.I see a lot of properties that will show good gain in the future but the weekly return is a bit shy to afford so maybe a pos cash flow property might pay for the short fall.[confused2]
