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Usually you can get a line of credit loan up to 80% Loan to value ratio.
So 370,000 * .80 = $296,000 So subtract your mortgage balance from this figure and you get an idea of what you can probably borrow as a line of credit loan if the bank values your property at $370,000
You can then use this as a deposit for your investment property loan.
If you wait a while you will most likely have a mortgage broker answer your posting as there are a few on this forum site. Or do a forum search on line of credit.
P.S.
Have a nice Christmas !Your kids are only young for a very sort time. I have kids too and I would love to live in a bigger house with a bigger back yard so I understand where you are coming Tambo.
The main thing with property investing is time.
As time progresses your property value increases but it does take time. Unless you are lucky and buy just before a property boom.What you need to consider is are you a really good sales person.
Do you have a big network of contacts and friends you can present this business opportunity to!If you push your friends too hard you can become known as that Network 21 person by your friends. And they may avoid you like the plague.
Amway has come a long way since its conception and I have an friend who is in Amway and the products they now have is amazing.
What you have to be very careful about is getting caught up in the hype.From experience you have to be very aware of on going costs !
A $1000 out of your pocket is a once off cost but what if you have to pay for as an example:
A web site each month (ongoing cost)
A credit card processing facility (ongoing cost)
A training web site (ongoing cost)
A special training phone mail box (ongoing cost)
A seminar (ongoing cost)
Bulk stock purchases so you get a discount but get stuck with the stock that you can't sellThese are some of the question I would ask
What are my ongoing costs going to be
How much do I have to sell to remain an agent
How many people do I have to sign up or arrange meetings for over what time frame to remain an agent.This type of system works on Networking.
If you can find say 4 people who are as keen as your friend is.
and these 4 people find another 4 people
who also find another 4 people and on and on and on,.
4 – 16 – 64 – 256 – 1,024 – 4,096 -16,384 – 65,536 – 262,144 – 1,048,576 – 4,194,304
So after 11 cycles of signing up groups you have 4 million people below you who if they just purchase the products for themselves and you got say 50 cents from their purchase you are earning 2 million dollars.
This is why they are pushing that you network rather than sell the products.
It really is a different mindset as you build wealth through building the network and growing it rather than from a once off sales commission structure. You would be expected also to mentor the new members under you and to help them build their network however you have to have the time in the initial stages to organise and help new members get their new members and all this takes work and time to build and develop.
You have to be able to survive long enough to build up a network and the $1000 paid is probably done to try and avoid what I have heard happens which is member burn out where the member quits.I am a burn out of another network marketing scheme but being fair and honest I did not have the time to devote to the networking and concentrated on the selling of the product rather than the networking and the ongoing costs were a killer. You really have to eat , breathe and live the network marketing way of life to succeed without burning out. It requires a great commitment over a long period of time to have any sort of hope of success.
I use Hire a Hubby as they are really good for those small jobs and they are francised so you will find a person fast.
I had a tree branch fall on my newly replaced fence (murphy's law) and I had a quote of $600 for a tree lopper for one branch and a quote of $600 for the nailing of a fence frame back in place so I got hire a hubby to do both jobs for $600 instead !
I also use them once a year to replace the smoke detector batteries !I have used also
http://www.greyarmy.com.au/
in the pastI have not done a joint venture but I am planning to get into this sort of thing down the track.
The pitfalls are more to do with being prepared in case something bad does happen
With an agreement it makes a bad event not so bad as everyone knows how this will be handled.but what you need to consider
!. What if one of you die how does this affect the investment
2 What if one of you divorce how does this affect the investment
3. What is the time frame of the investment
4. If the investment makes a loss how is this going to be handled
5 if the investment makes a profit how is the profit divided between the investors
6 What special skills does each partner bring to the venture.
7 How much does each participant invest into the venture
8 what ownership structure are you going to employ. Unit Trust, Hybrid Trust or just a tenant in common ownership.
9 What if one of you pulls out of the investment early how is this catered for.
10 Do all partners really have the financial means to cough up the cash once you are committed to a contract to buy a property?Discuss these issues with all partners and then
GO to a commercial lawyer and get a joint agreement contract drawn up.If you are on welfare payments like parenting payments or family assistance owning an investment property will affect the amount you will be able to claim from these departments.
Tambo2202 wrote:Hi everyone,
Hi Welcome to the forum,
Tambo2202 wrote:I have been watching this forum for a while but have only just joined and had the courage to share!
My husband and I are very keen to get into property investment but to be honest we are just jumping and trying out this and that without any real understanding of how to make it a success.Read as many books as you can as it is a cheap way to increase your knowledge
see
http://www.businessmall.com.au/property-investing/property-investing-general/col-1.html
http://www.businessmall.com.au/property-investing/property-investing-general/tra-1.html
http://www.businessmall.com.au/property-investing/property-investing-general/lom-5.html
http://www.businessmall.com.au/property-investing/property-investing-general/wax-1.html
http://www.businessmall.com.au/property-investing/property-investing-general/tur-3.html
http://www.businessmall.com.au/property-investing/property-investing-general/tur-1.html
http://www.businessmall.com.au/property-investing/property-investing-general/the-ultimate-guide-to-buying-and-renting-houses-and-apartments.html
http://www.businessmall.com.au/property-investing/property-investing-general/tur-2.html
http://www.businessmall.com.au/property-investing/property-investing-general/what-every-real-estate-investor-needs-to-know-about-cash-flow-and-36-other-key-financial-measures.htmlTambo2202 wrote:We have an older house that we have decided to rent out in a couple of months and use as our investment property. We have lived in it for about 5 years. We are building a new house and plan to move into that in a couple of months as soon as it is finished.
Rent for the old house will not cover repayments,Rent for old house will not cover repayment for which loan ?
Many new investors have a mind set that they can rent out the old house and claim the interest on the new mortgage they borrowed to buy their new main dwelling (PPOR) (Tax office looks for this common mistake also)
You can only Claim the interest on the original mortgage that was against the original PPOR home that is now an investment home.
Also you need to get the original home valued so that you can claim PPOR exemption right up to the date and value when you changed it to an investment home. This is because the original home now is going to be liable for capital gains tax from the date you started renting it out.
Tambo2202 wrote:we will have to chip in around $50 a week. We are hoping to hold on to the older house for quite a while. So we have set the ball rolling- made the first jump, but are a little scared/confused about where to go next. We hope we haven't made a mistake already!!
This is how I see it !
You are going to live in the most expensive house you own (the new house) so that you cannot claim any of its expenses against for a tax deduction because you like to live in a new house.
You will not be able to claim 2.5% capital depreciation on the building cost of your new house each year and thus increase your cash flow (it does reduce the cost base thus increasing capital gains tax) because you like to live in a new house.
Tambo2202 wrote:This is all very exciting but we can definitely feel the butterflies in our stomachs.
It can be like that I have that feeling sometimes !
http://www.businessmall.com.au/property-investing/building-and-renovating.html
THis web site has books that are useful
I have not read any of the renovating books mainly the property investing books which were good.If you spent money to renovate and its not PPOR you should be able to add the cost of improvement to the cost base of the property
unless you rented out the property and claimed these costs against rent income. You can't do both !
With the land when you sub divided it the cost base for the land would halve in value and increased the capital gain.
Also if the renovation was substantialthen GST would be involved
I did answer a similar question in a previous posting with relevant ATO web site links.
https://www.propertyinvesting.com/forums/getting-technical/legal-accounting/4330030
https://www.propertyinvesting.com/forums/getting-technical/legal-accounting/4329878See cost base info .
http://www.ato.gov.au/individuals/content.asp?doc=/content/36902.htm
http://www.ato.gov.au/individuals/content.asp?doc=/content/36902.htmCheck if there is a hire a hubby or a grey army near there.
or even a jims francise near byAlso when you buy a new recently built house you can depreciate the cost of building the house at 2.5% per year for 40 years however the cost base is decrease by 2.5% a year making future capital gain more each year you claim.
This is known as capital works depreciation
http://www.ato.gov.au/individuals/content.asp?doc=/content/00183243.htmas opposed to
capital depreciation where the 5 years may come into it however the effective life is based on a ruling by the tax commissioner and it is hard to find information on what the current ruling is on effective life of fixtures are.
http://www.ato.gov.au/businesses/content.asp?doc=/Content/33757.htmGood idea to employ a quantity surveyor to work it all out for you.
Who's name is on the title of the investment property
Why I ask is partner claiming Aus Study as negative gearing loss is deemed as profit when dealing with Centrelink.
(illlogical and against international accounting standards but hey that's centrelink for you)
If you sell an investment property and make a capital gain this is also deemed as income by CEntrelink means you could be asked to pay aus study back if property is joint owned with partners name.Depends on your marginal tax rate. If you are on for example 30% tax then you lose 100% of your money to get a tax reduction of 30%
Look at an offset account as a solution to what to do with the cash.
If you save interest there is no tax benefit but you would make less loss or maybe make more profit .
Say for an extreme case example you were making $1000 a week net property income and pay 30% marginal tax($300) is this better than a net property loss of $1000 a week to get $300 back on your tax.
A linked offset account would reduce interest charged by reducing the mortgage balance by the offset account balance when the interest is calculated. (make sure 100% offset account thou) and the cash is on call if you needed it later.When you have debt that is from bad debt (assets do not increase) you need to pay it off quickly
which I am assuming is a personal loan and credit card debt at a higher interest rate that is not tax deductible either.
This bad debt will lower how much you can borrow for a home.
Also credit card limits of $50,000 go against how much you can borrow even if you had it paid off.
Why do you want to upgrade can you put it off until you pay off your credit cards and personal loans.
You might need to consider consolidating these debts to the ppor loan to lower the interest rate and pay them off ASAP. Or take out a line of credit loan on one of the investment properties as a separate loan to get the high interest credit card and personal loan debt into a lower separate line of credit loan and pay it off asap. But stop spending money on these personal and credit card loans.
Ask the mortgage broker if this is possible.If it was stuff up then why didn't ANZ rectify the mistake when Andrew informed them of the stuff up. This would be known as good customer relations or also known as good customer service. By my business ethics that they care in any way about customers concerns and the effect of their corporate policies on customers.
It becomes more than just a stuff up when they treat customers with contempt and withdraw money from their bank accounts without permission or a signature (thieft)
I may be one of the many job seekers that ANZ stiffed in their graduate recruitment waste of time process that left me still unemployed.Terryw wrote:Andrew K wrote:The ANZ set up a mortgage offset account against one of my property investments.Behold, when I attempted to transfer money into it from another bank, the ANZ rejected the funds and then charged my bank a fee for the magnificent service of rejecting my money.
They even sent me a letter (on their letter head). When queried, the ANZ denied sending the letter. In fact, despite them having an ANZ reference number and letterhead, they blamed my other bank for sending the letter.
Needless to say, after complaints letters, being transferred from one department to the next on their phone banking system, I've decided to give up and never bank with them again.
It beggars belief how they stay in business.
How is that fraud?
Best to talk to someone in their complaints department and they will sort it out. No big deal.
It is not fraud just robbery via extra fees.
I am not sure if you can claim the whole land as a deduction as the bill board would be on a small part of the land where as —-
Maybe you could also have some form of animal agistment on the land.
Depending on Zoning of land and council regulations.What can you depreciate with vacant land ?
Maybe the fences thats about it !Andrew K wrote:The ANZ set up a mortgage offset account against one of my property investments.Behold, when I attempted to transfer money into it from another bank, the ANZ rejected the funds and then charged my bank a fee for the magnificent service of rejecting my money.
They even sent me a letter (on their letter head). When queried, the ANZ denied sending the letter. In fact, despite them having an ANZ reference number and letterhead, they blamed my other bank for sending the letter.
Needless to say, after complaints letters, being transferred from one department to the next on their phone banking system, I've decided to give up and never bank with them again.
Andrew you are only at defcon level 5 with your complaint-Its time to go to defcon level 3
Time to get the banks attention and make a claim for financial damages, being the fee charged to you and the loss of mortgage interest savings from the offset account balance while they declined your transfer . If the offset account contract did not have in writing about a limitation of transferring money into the offset account from other banks of the fee charged to your other bank or limitations and no one also told you about them (oral contract) then you may have a good case to claim damages and possible failure of disclosure of terms of the contract by the bank.Check out the next stage in your complaint process –
Click on the website link below for what to try next
http://www.fos.org.au/centric/home_page/resolving_disputes/how_to_lodge_a_dispute/how_to_lodge_a_dispute_banking_finance.jsp
