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    December 9, 2009 - 9:40 am
    karen. wrote:
    thanks for the points duckster. 

    we have loss of rent cover with our landlords insurance –

    Does it cover loss of rent only for malicious damage ?
    What happens if the place is just left with two garbage skip loads of crap and the place has wear and tear ?
    Also some Landlord insurance requires tenants on leases !
    Is there a excess to pay on a claim also ?

    Been caught this way myself
    (cost me 3 months and $20,000 to fix a house (while at Uni on single income of wife )
    (also my parents have just had a place trashed also that I am going to help in January for a week to help repair the damage)

    karen. wrote:
    ive worked out that if i take our current 2 mortgages and add a 3rd mortgage (including stamp duty and all buying costs), then put all loans on a potential 8% interest rate

    I was paying 10.5% on my mortage in 1996 so it could get this high

    karen. wrote:
    with their current rental return (plus a realistic expected target rent for the new property), and when including into our costs rates for 3 houses, PM fees, $3000 maintenance a yr, and 3 lots of landlords insurances, we are only out of pocket $170 a week.  Thats if we get a house for the price Im wanting to pay – which isnt unrealistic.

    if hubby lost his job we have insurances to cover short term and long term unemployment.  and these payments would cover all our living expenses plus debt repayments.

    Is this income insurance policies because some of these only pay if you cannot work not if you have no work. I do not know if an insurance covers unemployment or retrenchment so you may have this one covered as you stated.

    karen. wrote:
    And in regards to centrelink we dont count the family benefit payments into our regular income.  We get this at the end of the year and we consider it our lil bonus to put onto debt.  We only count the money we generate ourselves as we dont believe in relying on the government to raise our family.  So we have always kept this payment seperate from the family budgeting.  We try to live as self sufficiently as possible.   My kids dont go into childcare so I have no rebates from that.

    I used to think I was self sufficient until I made the mistake of going to University for three years and thinking the Government would support me with Austudy as I was improving myself. My second mistake was thinking I would get a job due to having 12 years of experience in other fields. So the only reason I do not claim Family B payments each week is the stupid degrading requirement to have to report to Centrelink every six weeks like a naughty school boy.  I also could get a healthcare card but the 17 page form and the extra required Form D for self employed people was intrusive and had to be filled in every 6 months.
    Also if you could get CCB via work/ run a business or do training for at least 15 hours a week your kindergarten fees are covered by CCB. !
     

    karen. wrote:
    Once you take out the potential $170 – $200 a week out of our own income we are still left with a managable budget.  Especially considering we don't pay any rent where we live.  We have that added advantage up our sleeve. 

    I am in a similar boat to you . I am at home looking after two 5 year olds and running a part time business. My kids do one day a week family day care since they were 6 months to give me a break and help me run a part time business. Also this gives the children the experience of missing me so they will cope better with going to school without seperation anxiety. (they are going to school next year !)
    Also I live rent free however when I go to the bank and check out how much I can borrow as only a single wage the bank uses a standard formula in their lending computer program that doesn't take into account that we do not pay a main residence mortage or a main residence rent and that we have $260,000 in our balance sheet after subtracting a minimal debt. So I can not borrow large amounts of new finance for property investing. It seems that if I had owed a couple of million before I stopped working I would still have the debt but because I paid off most of the debt and reduced my negative gearing by disposing of a negative cash flow property and paying down debt I can't borrow more money.

    karen. wrote:
    And if the property was ever vacant shortterm we are fine cos we have about $5000 emergency funds for this purpose, plus we have all our debts paid a month in advance so we are able to skip a whole month of mortgage payments if it comes down to that.  That is how we have structured our short term emergency relief.

    A really good way to achieve a buffer is to pay more off the loan as you are then ahead of the loan.
    When I took out a loan for another property because I had heaps of equity the bank forgot to take repayments for the loan. It took about 4 months for me to realise no repayments had been made and fix it. The bank didn't care because of the huge equity I had.

    karen. wrote:
    We are very frugal livers.  We buy where we have to, but only on the good stuff.  We are very good budgeters.  School is free here cos there is only a public option in the whole town.  Kindy is over now, that was relatively cheap.  And u mention nappies … my kids are cloth bum kids  :)  i adore a cloth bum haha.  Plus soooo much cheaper than disposables.  $60 of terry towel nappies lasted me both my last two children!

    I wish I could have coped with doing up the safety pins as I was showed at hospital but the disposables were so much easier even though they are expensive.

    Good luck with which ever way you go and don't give up it does take time !

    Have a great Christmas also !

    Profile photo of ducksterduckster
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    December 9, 2009 - 8:57 am

    I attended the active property investors meeting on Mon 7th Dec 2009 and this was discussed at length.
    You need to attend similar meetings so you can network (Getting to know similar minded investors) and build contacts who might be interested in future joint ventures or to be a future money partner.
    This usually requires a joint agreement to be drawn up by a lawyer to cover all parties involved.
    Private lenders can charge 4% per month which is 48% a year !

    If you live in Melbourne you could go to the meetings.

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    December 8, 2009 - 7:05 am

    The financial planner should alert you to the risks involved and then you can decide if you are willing to take the level of risk involved
    like the following

    .You need to factor in a few risks in your decision.
    Losing a tenant from a property for 6 months– Can you afford to keep the repayments going while you fix up a trashed house and re-lease it. Have you got a spare $20,000 in equity to borrow if you have to do an emergency renovation to fix a trashed house.
    Interest rate increases – When do your fixed rate loans if you have any revert to variable as the interest rate will increase.
    Losing employment – can you afford the repayments in this scenario and for how long .
    Dealing with centrelink – Your property income could affect parenting payments, dole payments , ect (You need to investigate impact)
    Dealing with family office. – Your property income could affect your Family A and Family B payments or Child Care Rebates.(You need to investigate possible impact)
    Selling if in trouble – Have you got enough equity in one of your properties to get out of trouble if you are against the wall !

    Another point I would like you to consider is how much your kids cost you.
    In Five years time you are going to have to pay for school books ($60 at office works primary school starter kit), School uniforms, School Fees, Kindergarten Fees, Food , (possible nappy costs for 18 months to 3 years)

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    December 8, 2009 - 6:43 am

    check out the back pages of Australian Property investor magazine each month.

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    December 7, 2009 - 12:39 am
    HelenaM wrote:
    Hi everyone

    However now its come to the crunch they say just before xmas is always difficult for getting new tenants.  Is this true?  How long do you leave your trust in your agent to find someone?

    I have experienced this problem at this time of year . It should change on 1st of FEB 2010 onwards.
    I also live across the road from a for lease property that has been for lease since 1st November 2009

    Drop the rent $20 a week
    Look at this way 3 months vacant at say @ $240 a week = $2280 lost rent as opposed to $20 a week being $1040 a year and after a year the rent can be increased.

    One thing to be aware of is tenants like built in wardrobes
    the color scheme needs to be pastel neutral colors.
    Does it have air conditioning for cooling !
    Do it have blinds / curtains

    Ask the agent what have prospective tenants commented on when looking at the place ?

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    December 6, 2009 - 12:42 pm

    The date is the date you purchased the original property as sub divided new land has no cgt exemption. See
    http://www.ato.gov.au/corporate/content.asp?doc=/content/86198.htm
    this should give you an idea of what is involved

    http://www.localpropertynews.net/articles/general/20041101-subdivision_residence.htm

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    December 4, 2009 - 11:19 pm

    An offset account has to be a 100 percent offset account as some types of offset accounts are not offsetting 100% off the loan balance at mortgage rates but rather just reducing the loan interest rate by a savings account interest rate on the offset balance. 
    (Warning for first time offset account user)
    Some investors have made the mistake of paying the loan down only to find it is hard to access the redraw money where as an offset account balance can be used for anything.

    Another powerful method is to put your wage payments straight into the offset account and take advantage of an interest free period on a credit card for expenses and then pay off the credit card at the end of the month. (this requires good financial will power with credit card spending)

    and make full use of the tax advantages of the deductable debt at a later date.
    What you have to ask yourself is what marginal tax rate are you on as it is probably 30% max if you earn <$80,000
    So you want to lose $100 to get $30 back as a tax deduction.
    http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm

    (Be careful as negative gearing is not as attractive as it used to be due to lower tax  rate scales)

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    December 4, 2009 - 11:02 pm
    dreamtobelieve wrote:
    Hi again,

    Just trying to gain some clarification regarding the eligability for CGT exemption.

    How long must you have lived in a property for it to be considered your PPOR and therefore make you exempt from paying any CGT?

    http://www.ato.gov.au/individuals/content.asp?doc=/content/36883.htm
    You need to be able to prove you live here.
    You need to have the intention to live as main residence (no longer refered to as PPOR term changed by ATO to increase confusion)

    dreamtobelieve wrote:
    Practicality aside, would it not be possible to just move into each previous IP (one at a time), declare it as your sole PPOR and sell with CGT exemption? I know this generally wouldnt be practical, but if this was feasible the possible savings would surely be huge.

    Great idea unfortunately the savings won't be huge due to only being able to get the CGT exemption for the proportional time portion that it was your main residence. Also you would need records of the house value at the time you moved in as this is what the ATO refers to as a CGT event. (change of assets use) and is needed to work out the capital gain while you lived in the house and also the value of the house to work out the amount that is subject to capital gain.
    (this valuation is more of an issue if you have big time frames involved say for example you rented out the house for say 2 years and then lived in it for say 10 years, now what was the value of the house when you moved in 10 years ago now that you are selling it?)

    Calculating a part exemption

    The part of the capital gain that is taxable is calculated as follows:

    Total capital gain made from the CGT event

      x

    number of days in your ownership period
    when the dwelling was not your main residence
    total number of days in your ownership period

    from http://www.ato.gov.au/individuals/content.asp?doc=/content/36883.htm

    see also
    http://www.ato.gov.au/individuals/content.asp?doc=/content/36887.htm
    However you can only claim one property at a time as a main residence and I think 7 years is the max time frame

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    December 4, 2009 - 10:35 am

    Most of these suburbs have a train line and east link close by

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    December 2, 2009 - 8:46 am

    Its easy to get really excited and motivated that you make the mistake of telling your colleagues/ friends or family.
    Wealth creation takes a certain mind set that these other people do not have. It is a bit like perception they see things differently to you because they have a different perception to you.
    It can take time to pull off your dreams but keep in mind the difference between someone who doesn't plan and dream and after 20 years has one house when you could have twenty houses.

    It is like the space shuttle it takes two big booster rockets to launch it into space but once it is in space it only needs gentle nudges from its tiny rockets to move through space. Property investing is like this as you are at the launch stage and it is difficult .

    I am at the almost paid off house number one stage and preparing to blast off to the moon once I earn income again from either private business or a just over broke J.O.B.

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    December 2, 2009 - 8:33 am

    MIAA is now called MFAA

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    November 30, 2009 - 9:10 am

    I was thinking it was the fact that the sun is so aggressive in Australia that it is safer for kids to play inside in a bigger house than outside and risk sun burn or skin cancer.

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    November 28, 2009 - 1:01 am

    Sometimes you can have both by splitting the loan you would do this if you had an intention of making more repayment than was needed as the variable portion would allow extra repayments where as the fixed portion would have restrictions on repayment.
    So if you thought you may pay off 15% of your loan over the fixed period through extra repayments you would fix 85% and have 15% variable.

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    November 28, 2009 - 1:01 am

    Sometimes you can have both by splitting the loan you would do this if you had an intention of making more repayment than was needed as the variable portion would allow extra repayments where as the fixed portion would have restrictions on repayment.
    So if you thought you may pay off 15% of your loan over the fixed period through extra repayments you would fix 85% and have 15% variable.

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    November 28, 2009 - 12:48 am

    I do not live in QLD or have land in QLD but the state revenue office is where to source the answer to your question which I have done below for you to help you out !

    It looks like from their web site that you have to apply for the concession when you buy the property see application form link at bottom of these comments.
    and then it is a matter of being there long enough for SRO not to take back the concession .

    There seems to be a one year reassessment provision (s.153)

    http://www.osr.qld.gov.au/legislation-rulings/public-rulings/duties/duties-pdfs/da085-1.pdf
    Do a find on document for reassessment provision and you will find it on page 4 of 8
    or
    http://www.osr.qld.gov.au/legislation-rulings/public-rulings/duties/da085-1.shtml
    second page of this web page point 20 examples .

    Have a hunt around the http://www.osr.qld.gov.au web site for any additional information you may need.

    http://www.osr.qld.gov.au/forms/land-tax-forms/exemp-deduction-forms/form-lt20.pdf

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    November 25, 2009 - 11:48 pm

    First you need to specialize – as it is hard to be everything to all customers.
    Are you going to be lending to new home owners, bad debt clients, business owners, property investors or self employed people.
    Once you decide you then have to target that segment.
    You need to create a profile document.
    This tells your prospective affiliate what lending services you are providing to any of their clients they refer to you and also your background and what lenders you are .

    I would suggest contacting accountants and financial planners asking them for an appointment to discuss how you can help their business clients with finance.
    If you get some of their precious time you need to have a mindset of asking them about their business and the types of clients they have. Don't be too eager to talk about your business or service unless they ask you a question about it. What you are trying to do is find a possible need in their business that you can help their clients with and vice versa you may be able to refer clients to them if they have a need for their business service.
    Also you need to advertise.
    How
    Talk to as many friends as you can about what you are doing with your role so that when one of their friends they know needs finance they will remember what you do and refer their friend to you.

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    November 23, 2009 - 12:52 am

    Dan,
    Did you mean amateur question?

    Water rates ,insurance, council rates and Maintenance – landlord pays all costs with residential. You may be able to get tenant to pay excess water charges.

    If you insure the rental payments with a landlords insurance policy you might need to have a lease agreement to be able to claim lost rent on the insurance.

    Doesn't make it easier to evict someone but a lease may make it less likely the tenant does an abandonment of your property.

    I feel that you may have had a commercial property mindset or past experience where as residential property has different rules/ laws and tenants have more rights.

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    November 22, 2009 - 11:44 am
    Miss_Proulx wrote:
    Hello to All you Property Peoples!…  Miss Proulx, Newbie here…

    We are doing a secret buget reno on mum's kitchen and bathroom whilst she is
    away on holidays. We're making a start with measuring and quotes but we really
    have NO experience at all. The kitchen and bathroom are both tiny, so much needs
    to be done (in 6 weeks!).

    The toilet needs to be replaced, but I was thinking about leaving the bowl there and
    just replacing the plastic bits. The bowl is the old oval shaped design, so Im wondering
    if there would be anything that fits it these days???

    Check out Bunnings

    Miss_Proulx wrote:
    We need to remove the kitchen benchtop…most likely will need a professional, or is
    there any DIY suggestions on how to do it?

    Check for screws or nails holding bench top to cupboards.
    check out videos
    http://www.youtube.com/results?search_query=diy+kitchen+renovations&search_type=&aq=2m&oq=kitchen+ren

    Miss_Proulx wrote:
    We are cleaning up the existing cupboards,
    repainting, new handles and hinges and hoping that it will be financially worthwhile just
    to do this resurfacing vs installing new malamine cupboards.

    Sand paper old paint so new paint sticks to old paint.

    Miss_Proulx wrote:
    The old bathroom sink will be replaced but the plumber wants $450 for just that job.
    Not sure if this is reasonable, but might as well get the toilet replaced all in one go.

    Trades people are scarce so get three quotes from three different plumbers but $450 sounds like a likely charge.

    Miss_Proulx wrote:
    Im wondering what alternative I could use on the walls for a textured design, to cover
    up the old, peeling pain, or go through the drama of breathing in paint stripper in a
    tiny, unventilated room.

    Now you have to ask yourself why is the paint peeling ?
    And the answer is a unventilated room.
    Put in a Mistral Fan and light fitting via an electrician
    Textured design will make cleaning mold almost impossible if it forms.
    You can remove paint with a heat gun rather than using chemicals just you have to watch glass as
    heat gun will heat glass and it can crakc or break.

    Miss_Proulx wrote:
    Tiles…God, we have no idea. The only thing I'd be remotely game to make a start on
    are the smaller tiles in a block with a mesh backing.

    Do not tile straight onto walls or floor install wet board fibro cement sheets to wall then add tiles. It has to be water proof.
    Use plastic spacers if on walls with larger tiles.
    If it is the floor you may want to use small tiles so less chance tiles crack. Floor tiles would need to be floor tiles not wall tiles.
    If using larger tiles you may need a tile cutter (bunnings)
    Use a sealant on interface between bath and tiles.
    Again check out youtube
    see videos
    http://www.youtube.com/results?search_query=diy+bathroom+reno&search_type=&aq=f

    If you want to keep videos download a youtube video grabber program and download a flv viewer software program also.

    Miss_Proulx wrote:
    We checked out Ikea's kitchen installation workshop on Saturday, good start, but plan
    on the Home Base Saturday courses as well.

    What are the best websites to search for second-hand kitchens?

    Bunnings also hold diy courses in their stores
    check http://www.bunnings.com.au for what courses are on and when

    http://www.tradingpost.com.au/Search?PageFlowUseCase=Search&PreviousPageFlowUseCase=QuickFinder&intref=bg109&QueryTerm=kitchen
    http://www.tradingpost.com.au/Home-Renovations/Kitchens/Search?PageFlowUseCase=Search&PreviousPageFlowUseCase=&PreviousSite=TP&AdvancedSearch=
    http://www.graysonline.com/Search.aspx?q=kitchen
    http://www.secondhandkitchens.com.au/listings/
    http://www.sckw.com.au/
    http://www.secondhandkitchens.com.au/listings/category.php?type=16

    Do a search in http://www.google.au for secondhand kitchens
    and select australian sites only

    You may need to hire a rubbish skip where you put all the rubbish into it and a truck comes and takes it away.

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    November 22, 2009 - 11:08 am

    Financial review advertises a lot of commercial property.
    But do not discount the internet as a source of advertisement

    You may be able to get real estate agent to advertise in http://www.realcommercial.com.au/
    or You may be able to get real estate agent to advertise in http://www.commercialrealestate.com.au/
    or You may be able to get real estate agent to advertise in http://www.realestate.com.au

    or
    advertise for free in http://goldcoastexchange.com.au/classifieds/Gold-Coast-Commercial-Property-Lease/5227.html

    http://www.brisbanepropertylistings.com.au/advertise/services.php
    http://www.realestateguide.com.au/advertise_property/
    http://www.brisbanepropertylistings.com.au/advertise/services.php
    http://www.primesite.com.au/index.php

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    November 22, 2009 - 10:49 am
    Quantum Leap wrote:
    Hey there,

    My family situation is changing and our PPOR is no longer going to suit our family.

    Sorry to hear that.
    I am not in this situation but hear goes !

    Quantum Leap wrote:
    My ideal goal is to turn the PPOR into an IP, and buy a new PPOR.

    I'd like to hear from who have done the same thing please.

    A few preliminary questions:

    * How do I extract our equity out of the PPOR in the most suitable fashion? (purchased in joint husband and wife's name)

    One joint owner transfers ownership to the other person. Like selling half the property
    or
    You sell PPOR pay off remaining debt and take left over cash as deposit for new ppor.
    (
    this next method depends on if you are requiring support from centrelink)
    Scenario
    you keep PPOR and turn it into IP
    Centrelink then deems negative gearing as income and reduces your parenting and family A and family B payments
    Centrelink also Deems you to have an asset and reduces your payments.
    You take out a line of credit loan but it is dangerous to other half owner against old PPOR for new PPOR. THis new loan is not claimable as private purpose.
    Get the old PPOR valued as soon as you change its status to IP. For future CGT implications you need the value when you changed to IP.

    Quantum Leap wrote:

    * How do I make most of the debt associated with current PPOR (future IP) tax deductible?

    Earn more money
    or
    Pay off the debt as fast as Possible for IP
    Why ?
    Because negative gearing is not as tax deductible as you might think.
    if you earn from $34000 to $80,000 you get 30% of the negative gearing. So you lose 70%
    You may be able to claim the building costs as depreciation if it is a relatively new property but it increases capital gains tax each year  you claim by reducing your cost base.

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