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Where I go to the gym these guys advertise on the notice board at my gym
but I do not know how good they are as I have not used them
http://a1houseplans.com.au/
and they are in the SE suburbsIf you have a large mortgage you will have to wait for your dwelling you live in to increase in value.
There are ways of decreasing your mortgage faster.
(1) Pay off the loan weekly rather than fortnightly or monthly.
(2) Put more in to the repayment even if it is just $20 a week it adds up
(3) Do not buy stuff that devalues like a new car
(4) Set up an offset account and put your wage payments into it.
This next part requires extreme financial discipline.
Pay day to day bills with a interest free period credit card and pay the credit card off out of your offset account before the interest rate is charged.
Once you have paid down your mortgage or the house value has come up you can borrow against the increased equity using a line of credit facility.Hi KarlM
It can seem confusing because you have not had to pay out cash for this expense but it is sometimes referred as a paper expense.
If you are depreciating the cost of construction it is an expense generated by a paper entry loss. Now this seems like money for nothing but in 40 years time you could be required to build a replacement building and also each year you claim this your cost base is decreased by what you claimed as building depreciation. So if you sell later on your capital gain will be increased because your cost base has been decreased by building depreciation.
If you are depreciating fittings in the house say carpet as an example. At some time in the future you are going to need to replace the carpet. So you are claiming the cost of the carpet so that at the end of the effective life of the carpet you will need to replace it and then start depreciating the new carpet for its effective life span.
With the carpet or curtains or hot water service , ect you are saving the tax department money by depreciating the expense. If say in an alternative parallel universe the expense was able to be claimed in the year you replaced it then the tax department would have to give you a bigger deduction where as by only being able to claim depreciation a partial (smaller) amount each year is claimed and this saves the tax office from having to pay more for the expense through a deduction in your tax return.If you want to take this further imagine in another hypothetical alternative parallel universe that you could claim the whole construction costs in the year it occurred what effect would that have on the tax system.
Under the Keating Government 1992 – 1998 they did change this to 5 years under a previously now abolished (Ralph report – tax reforms 1998) capital accelerated scheme. This was originally devised to increase building by developers during the recession we had to have.jsoohoo wrote:Hi Fellow Investors,He told me that if I were to bid and if the bid was too high
Ask your lender who they use as a valuer and then employ that valuer to provide you with a valuation before you go to auction.
That way you will know exactly what the property is worth before bidding on it and you can use the valuation for the bank loan.
However banks can go for the lower of both values being what you won the bid at and what the valuation was.Another method is to look at what similar properties in the area sold for this can be done in the sold (TAB) section of http://www.realestate.com.au then select the suburb and then pull up one of the properties listed.
Then at the bottom of the detailed screen you will see a link to recent sales.
This brings up a list of sales so you know what they sold for.It is very easy to get emotional carried away at an auction and by knowing the prices of property in the area you have an upper limit on bidding and must be prepared to walk away if the bidding is too high from what your researched price is.
The other problem is the price ranges given are not often followed in the bidding.
I prefer to buy without auction but unfortunately a lot of properties are sold by auction.
Also if it doesn't sell approach agent with an offer to buy at $xxx,xxxx amount.
You might need a pest and building inspection which then goes to waste if you are not successful in the auction.jsoohoo wrote:a pre-approval done and I could buy a property up to $350k with 90% LVR.So you have an upper limit so find out if similar properties recently sold for 350k in the area. As you can't go by what the price range is advertised at by the real estate agent.
However if yiu get two really motivated buyers who knows what the bidding will rise to.[/quote]
This has to do with zoning.
When a developer buys a couple of properties next to each other the council will tell the developer he can't built a low set unit or a small town house. The developer can only build a big multi story apartment building.http://www.ato.gov.au/individuals/content.asp?doc=/content/36557.htm&page=2&H2
http://webcache.googleusercontent.com/search?q=cache:LLwZMLKtC8AJ:www.law.monash.edu.au/units/law7276/2009/trimester1/lectures/5152-2009-sem1-lectures-chapter17.ppt+fourth+element+cost+base&cd=8&hl=en&ct=clnk&gl=au&client=firefox-a
http://www.taxpayer.com.au/media/news/20070705dyk.html
http://sites.thomsonreuters.com.au/tainsight/2009/06/29/cgt-cost-base-capital-improvement-expenditure/
I am not sure on what is claimable but think it would be also based on what sort of tax payer you are.
Individual – limited to what can be claimed
Developer – more scope on what is claimableAlso GST may be payable on the sale of the new dwelling and if registered for GST you can claim GST credits for the costs of the GST on the construction.
If I was you I would advertise in some of the free real estate advertising web sites. See what is advertised already and then place similar wording. Things like Perfect Investment, Good Long term Tenant, Rents at $$$ per week.
Look at
http://www.homesales.com.au/
http://www.sellingprivate.com.au/
http://www.smartvendor.com.au/search+real+estate.php
http://www.noagentproperty.com.au/
http://www.owner.com.au/
http://sydney.gumtree.com.au/If using a real estate agent get real estate agent to advertise in sites like
http://www.domain.com.au (think you can privately advertise also)
http://www.realestate.com.auIt really depends on which state you live in. This exemption of IP varies depending on what state you are in.
Google search {State} Revenue Office
{state} insert the actual state you are in.
Then look up the web site or contact them to confirm if yes or no.I would wait till the next looming Vic state election occurred before believing that the election propaganda may actually occur.
" East Link freeway will be toll free" that was promised by the current State Government ,
I haven't seen that election promise / propaganda from the previous election occur !
Welcome to the forum,
I do not want to give you the figures in case it breaches copyright so I am informing you where you can find the data instead.
Data for vacancy rates can be found in June 2010 Australian Property Investor Magazine Page 117
post code 3752 and post code 3757capital growth data can be found on page 136 and 137
You could find this magazine in your local library or buy it in the newsagents or order it online
http://www.apimagazine.com.auI have been involved with this rule and heard of it.
But it was done via insurance companies issuing insurance bonds..see link below for more detailed explanation
http://www.financialguide.com.au/guides-and-tips/insurance-bonds/You can find the averaged annual growth over 10 years
in the back section of API magazine June 2010 page 124
you could look it up at your local library or buy the magazine
http://www.apimagazine.com.authis may be of use also to you
http://www.investsmart.com.au/property-research/NSW/2262/Blue-Haven.aspemploy a`quantity surveyor to work out what you can depreciate.
Here is a real renovation nightmare I saw today on the net
http://www.realestate.com.au/property-house-tas-rokeby-106679886http://www.activepropertynetwork.com.au/sydney.html
This may be a starting point
Depends on are you working out on interest only or P & I repayments
Formula I would use
Income = Rent income (PA) – loan interest (PA) – $3000 to factor in for guess on (insurance , council rates, water rates)
You look at similar properties in area to get an idea what sort of rent or base it on 4.5 % Yield on average.
if LVR >80% then mortgage insurance is needed to be paid
Stamp duty is another expense when buying
if income is a + number it is cash flow positive.If P & I you may want to use repayment as figure for interest cost to work out cash flow.
Is the LOC in one name as if it is you may be required to have a solicitor explain the downside risks of this.
I have an LOC in my wife's name but I am co guarantor so I have risk involved and had to have a solicitor explain this and stamp the loan document that the solicitor had explained it to me.See if you can get telecommunications conduits installed with pull wire or string so that when you get the service added later it will be very easy to install the fibre cable / foxtel / telephone through the conduits.
juddy79 wrote:Hi all I am new to this forum I have been watching this site for a while and have found there is a wealth of information from experienced property investors and the not so experienced like myself. I thought I might as well jump in to seek some advice so here goes!
My partner currently has a PPOR in a place called Tannum Sands that she purchased in 2002 for $127,000 it has been rented out for the last 3 years, it is currently valued at $300,000 with a mortgage of $113,000. The rental income basically covers the mortgage repayments.
My partner is a Teacher and we are expecting our first child early next year she will receive maternity pay for that year of around $25,000 I earn around $90,000 per annum We are trying to decide on what path to go down which are
1.) Purchase a second IP using equity from the PPOR and continue to rentThink about the name on the title and loan as partner is going to be on lower wage during maternity.
This also depends on partner being happy with continue to rentjuddy79 wrote:2.) Purchase a new PPOR to live in and sell original residence to lower the mortgage.You will be required to pay capital gains tax on original residence if the capital value is more than when you started renting it out.
juddy79 wrote:3.) Move back into original PPOR and pay off mortgage Ideally I would like to keep investing to eventually be able to purchase the dream home although I am having trouble convincing my partner who would like a home now. any advice given would be greatly appreciated ThanksYou are going to experience increased costs to your living with a baby.
If you move into PPOR you lose a reliable tenant
IF you pay off the PPOR you could concentrate on doing this while your partner is on the lower income.
This would put you in a better financial position by reducing non tax deductible debt if you decide to stay in this property.
Then when your partner starts work again you can afford to invest in investment properties and have more equity in PPOR.I can't tell you which way to decide but I have put forward the pros and cons of each choice.
paying off the LOC quickly is not really a necessary requirement . It would be so as to eliminate the risk to P1 from a P2 loan.
If you had trouble paying off LOC in the future it may affect PPOR and if you foreclose on the LOC you could Lose P1 to the bank. It is more for reducing co lateral risk rather than for any saving reason.
