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    October 25, 2010 - 10:07 am

    You need to factor in $1000 extra for  costs in the purchase of this property to cover Stamp duty,Solicitors fees, Title transfer fees.

    Profile photo of ducksterduckster
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    October 25, 2010 - 9:56 am

    If you look at the last two posts they are advertising there businesses at the end of their postings which can be set up under the profile tab. Then click on edit and put your business details in the signature section of your profile.
    This is allowed as long as you are sharing your knowledge at the same time or advising others via posting.

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    October 25, 2010 - 9:47 am

    http://www.lawcentral.com.au/CreateDoc/createlink.asp?DocId=28

    Does your private lender have a credit provider license as lodging this above type of contract will flag ASIC to check if the lender is licensed.

    http://www.asic.gov.au/asic/asic.nsf/byheadline/Credit+homepage?openDocument

    Not sure on books as the new Credit regime / Laws changes the way credit can be lent out so it has all changed and books will be giving you information based on an unregulated credit market which does not exist in this country anymore.

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    October 25, 2010 - 9:35 am
    Ben Kelleher wrote:
    this is going to sound stupid, but would you please tell me what LOC is?

    LOC = Line of Credit

    http://www.investorwords.com/5606/home_equity_line_of_credit.html

    Usually up to 80% LVR (loan to Value Ratio) can be borrowed. A line of Credit is a loan limit set up on a facility that lets you borrow money up to the limit – on call borrowing – once set up you can borrow the money when you need it.
    80% LVR = (existing loan + applied for LOC) / current property value = 0.80

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    October 22, 2010 - 7:08 am

    check out this site
    http://www.firmfinance.com.au/
    Was originally advertised in Herald Sun

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    October 22, 2010 - 7:06 am

    This link will help them in their endeavor
    http://encarta.msn.com/encnet/features/dictionary/dictionaryhome.aspx

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    October 21, 2010 - 9:31 pm

    The rental market is a supply and demand situation. If supply is less than demand the rent price increases.

    So if investors were buying lots of properties and then trying to rent them out there would be an over supply of rental properties on the market and the rent charged would decrease.
    The increase in rent has been caused by an increase in house prices but the residential rent is not charged as a percentage of the house cost. Only commercial is like that.
    If house prices increase and first home buyers can't afford to buy then they rent.
    The lack of property investors causes a supply problem for the increased demand for rental properties and the rent increases.
    As house prices are high an investor cannot charge rent based on a percentage of the house price.
    So a 3 – 4 % rent is most likely achieved  before expenses are paid out.
    You also have not mentioned the foreign investors that buy Australian Property as an investment and then lock up the property in Australia and do not rent it out.

    The video is not about the Australian property market but rather the USA
    In the USA rents are a lot higher compared to the fact that the prices of houses have fallen.
    It is a different market to the Australian market and rental yields are a lot higher.
    However it comes back to supply and demand.
    As the financial crisis wiped out low income home buyers it created a massive demand for rental properties in the USA.
    An investor could have borrowed say  300,000 dollars and buys a USA property. A financial crisis occurs and the property value drops to $200,000
    So I would suggest that some USA property investors could have been caught out when property values fell and that their could be a supply problem for rental properties causing rents to remain high kin the USA. Or could be investing in other forms of investment instead due to uncertainty.

    Also the tax breaks you mention are there so that the government doesn't need to invest in massive public housing projects.
    If you did not have people investing in property you would not have a place to rent and would have to live in a public housing project instead.

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    October 18, 2010 - 9:17 pm

    Do not buy stuff that depreciates in value. Examples :- nice new car , nice 3d Tv, Nice new computer.

    Take money out of the bank account your wage goes into and transfer it into a power saver account at higher interest rate.
    If you do not have easy access to the power saver account as some of them are only accessable online you won't be tempted to withdraw it. If it is not in your wage account you learn to live on what is left in the account.

    Pay off credit cards first and do not use them again.

    If you have children and get Family allowance B payments ask for them to be paid at the end of the year as this is an excellent compulsory way of saving money. You get the payment in your tax return and then put it into your power savings account.

    Take a cut lunch to work rather than go to a take away place each day. (Save about $10 a day)

    Work closer to home (have you bought a train ticket lately $9.90 a day ) and driving to the city what does parking cost a day!
    Working in the suburbs parking cost zero and petrol cost low and you are paying for the car insurance and rego might as well get your moneys worth by using the car to travel 5k up the road rather than 20k in grid lock traffic to work.

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    October 16, 2010 - 6:19 am

    i am wondering if i should just pay the stamp duty on her half to get her name off the title

    From a legal aid document on the  internet
    If you have a court order to transfer half the ownership you could be exempt from NSW stamp duty
    http://www.legalaid.nsw.gov.au/asp/index.asp?pgid=515

    It talks about an application for consent order (form 11) from

    http://www.familylawcourts.gov.au/wps/wcm/connect/FLC/Home/Court+Orders/What+are+orders/
    http://www.familylawcourts.gov.au/wps/wcm/connect/FLC/Home/Property+and+Money+Matters/If+you+agree+about+property+and+money/

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    October 15, 2010 - 8:48 am

    If you are not too worried about selling at a lower price then if you put the words "Motivated Seller" or "Must Sell due to ill Health" in your internet advertisement  you will attract investors. This is because those words end up in the search engines on the internet and when an investor is searching for a motivated seller they will search for those words and your advertisement will be in the search result.

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    October 12, 2010 - 10:27 am
    Roz70 wrote:

    Hi all,

    New to this forum and would really love some good advice on how to set up our loans. 

    We have 3 properties all cross collateralised, which I now realise is not ideal! We love investing and want to continue in a much bigger way. Our current loans are as follows, PPOR $25,000 last bank valuation $500,000. IP 1 loan 230,000 last bank value $280,000. IP 2 loan $205,000 last bank valuation $195,000. IPs are interest only.

    If we pay down approx $60,000 off the IP loans and pay the $25,000 owing on our PPOR my current bank will release our PPOR. My question is, should I take a line of credit for the maximum 80% against our PPOR (we have approval with suncorp to do this) and then use this for deposits on properties as we go along?

    Roz , this "as we go along "is it after you give up work ?

    Yes you have a LOC but then if you are not working you will not be able to convince a bank that you can service any further loans using the deposit.

    Why am I pointing this out to you is this is exactly how I set myself up but I haven't meet the servicing requirements for further loans as I have been looking after my two daughters for six years and am only starting to get back into some semblance of a career. So if you give up working any new loan will become difficult due to servicing.

    Roz70 wrote:

     Or should we just be borrowing the deposit against our PPOR each time or what other way should we be doing this?

    Also I am currently working limited hrs but with 5 kids, (yes 5) I am considering not working for 12 months or so, which is why we thought maybe getting the line of credit sorted out now before going back to one main income might be the go.

    Thanks for any input, it's greatly appreciated

    You may need to get a loan for the next IP sorted before you stop working but be careful with working out your cash flow factoring in no job income for 12 months to 2 years and also if higher interest rates and council rates will cause problems.

    Also family payments and parenting payment are affected by negative gearing you may want to check into this also.
    I am not going to go deeper into how it is affected as there is a post in heads up by me about payments.

    Also it becomes difficult to negative gear against your income when you reduce it or it becomes zero if your name is on the investment properties and loans..

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    October 12, 2010 - 7:00 am

    A heat pump for hot water may be an option
    http://www.dux.com.au/products.php?name=D2FH00000C
    or a
    solar / electric hot water
    http://www.dux.com.au/products.php?name=D2F136W2AC

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    October 11, 2010 - 10:26 am

    When you have shared property you need a body corporate
    see
    link below
    http://www.homeiown.com/strata-title-and-body-corporate/
    http://www.bodycorponline.com.au/body_corporate_facts.php

    shared driveways
    'see

    What is common property?

    first line of paragraph
    http://www.acebodycorp.com.au/sa/what-is-a-body-corporate/

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    October 6, 2010 - 2:06 am
    Terryw wrote:
    Not stamp duty, or legals – they can only be claimed as capital expenses when you sell. Borrowing costs can be claimed over 5 years -this would include LMI and I think maybe registration of title and mortgage – not sure on these.

    http://www.ato.gov.au/individuals/content.asp?doc=/content/00113245.htm

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    October 6, 2010 - 2:02 am

    I am not an accountant so don't listen to me check the ATO web site links below .
    If you claim building write off depreciation it can be a large expense on paper.
    How do you get a depreciation report as advised by Dan ?
    Answer – you can employ a quantity surveyor who will work out a depreciation schedule that you can then hand to your accountant.
    http://www.ato.gov.au/individuals/content.asp?doc=/content/00183243.htm
    If you claim building write off depreciation you reduce your cost base each year and eventually increase the capital gain if you sell later.
    Did you know you can claim the borrowing costs over five years.
    http://www.ato.gov.au/individuals/content.asp?doc=/content/00113245.htm
    Claiming repairs
    http://www.ato.gov.au/individuals/content.asp?doc=/content/00183233.htm
    Down loadable guide
    http://www.ato.gov.au/individuals/content.asp?doc=/content/00237831.htm

    http://www.ato.gov.au/individuals/content.asp?doc=/content/00237983.htm

    Now 2.5% of building costs – as an example on a building cost of $100,000 so it is the cost of the building not the land !
    that would works out to $2500 extra expenses a year.
    At 40% tax that would be worth about $1000 in your return.
    However your capital gain increases by $2500 a year through reducing the building cost base.

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    October 6, 2010 - 1:33 am

    Search for properties with land size 800m squared or greater 1000 m squared.

    Always check property found with local council before committing any further as I encountered a development ban in one area I was visiting as the area was already over developed.

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    October 6, 2010 - 1:30 am
    Qlds007 wrote:
    Yes but they charge 16% per annum.

    Can be higher than this if credit rating is bad
    Interest rate versus credit risk

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    October 5, 2010 - 6:12 am
    JacM wrote:
    The "extra repayments" calculator indicates that a 25 year loan is cut to 13 years by making an extra payment of $1000 per month.

    If you look at the regular calculator (not making extra payments) you will see that at the year 13 mark, there is still an amount owing of $294,721. 

    At this point you have 12 years of 6.54% p/a on $294.721 costing you $130,974 in interest payments based on no extra repayments at $681 a week. If interest rates rise over the 12 years the interest savings could be higher.
    If you made the higher payment then for 12 years you have no weekly repayment to make at year 13 and you are saving interest.
    If you put the $extra repayment and the $681 a week into the bank at year 13 to year 25 or purchased an extra investment property with the increased equity – You start building wealth.

    JacM wrote:
    Depressing, hey.  So for the first decade or something, all you're paying is interest, before you are really starting to chip away at the principal.  Anyway, the point is, at the 13 year mark you would normally still be owing $294721.  If you put your extra $1000 per month into a bank account compounding at 5% (say per year for the sake of the exercise) it will grow to only $212555.80 which would absolutely not be enough to pay out the loan.

    Plus you get the privilege of paying (with after tax earned dollars) tax on the 5% interest which grows each year as your savings grows.

    JacM wrote:
    You will probably find that the home loan interest rate is higher than the interest rate on savings accounts.  For this reason, you save more money by putting your money in an offset than you would in a savings account.  And that isn't even talking about the fact that you'd pay TAX on money earned in interest in a savings account.  It also must be remembered that home loan interest is added and compounded DAILY.  Is a savings account compounding daily? 
    Cheers!
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    October 5, 2010 - 5:49 am

    You may find the services of a quantity surveyor may be useful to work out the full depreciation mentioned by Terry.

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    October 5, 2010 - 5:45 am

    www,igrin.com.au
    This site lends in smaller amounts of $2000 – $5000 loans of higher value can be tried but chance of getting the funding low.

    http://lendinghub.com.au/
    This site does have larger loans processed through it

    These sites are a new concept called person to person lending and may be a way for you to gain a loan for the problem you have.

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