Forum Replies Created
or you could use the excel template that is downloadable called amortization
The formula could probably be used in a calculator but you would need a financial calculator and would most likely it woudl have a PMT function similar to the excel function PMT and it would require you to carefully read the calculator's instruction booklet to work out how to input the required formula values.
The idea of using a mathematical formula over 20 years of calculations would be a tedious event without a financial calculator or Excel. Which can work it out in seconds rather than hours.
Really depends on how many other similar new developments are for sale in the suburb as it is driven by market price due to different forces of supply and demand for new developments. Its a different market to second hand houses or second hand units.
A lot of developers get into trouble as they can only get a sale price determined by the market price buyers are willing to pay rather than a set formula based on land value plus building costs plus desired profit.
Good thinking I can see how you came to this idea. But the 150k redraw has to be for investment purpose that produces income to be tax deductible.
Here is something else to think about
What is your current marginal tax rate is it 40% check tax rates at?
http://www.ato.gov.au/individuals/content.asp?doc=/content/12333.htm
So at $150,000 x 6% interest/p/a = $9000
So 40% of $9000 = $3600 tax returned
60% of $9000 = $5400 you pay hence lose so as to get $3600 back
(it is worse case if you are on 30% tax rate)Lets say you make $9000 as net income from the investment property. (as an example)
tax is 40% of $9000 = $3600 . You pay $3600 as tax for rental income but keep $5400 AFTER TAX (if marginal tax rate is 40%)
You can use $5400 p/a to help pay off either the PPOR your planning on buying or to pay off the now converted ppor to investment property.Maybe you need a more efficient heater to use in conjunction with the Coonarra heater
I used a
NoBo heater when I lived in a house with limited heating for my two new born daughters.
See http://www.productreview.com.au/mpl/1106/2524/Nobo_Electric_Heaters
Or something of similiar design as there as other makers of similar heaters on the market.
here is a price list to get an idea of there cost
http://www.getprice.com.au/buy-best-nobo-panel-heaters.htmIf you have gas a central gas heater may be an option or a combined central gas heater and evaporative cooler system cost about $6000 – $8000 depends on installation requirements.
Your replacement tenants may also find an expensive electric bill to be annoying and you could face the same problem.
http://www.tradingpost.com.au
I am currently selling my car through them.
My car ad cost me $7.50 for about 16 weeks
It is on the internet so when Saturday occurs most people check out the web site and call the seller.this has been answered at duplicate posting
https://www.propertyinvesting.com/forums/property-investing/help-needed/4328390Emma,
You need to be aware of the possible pitfalls to you of vendor finance. Get a solicitor to go over the contract with you because if the investor is not ethical they sometimes take all your payments if you get behind in repayments and take the house back.Another scheme that I have read about is where the tenant rents to buy the house.
The tenant pays extra on top of the rent but the extra goes into an account and builds up as a deposit.
At a later stage the landlord sells the property to the tenant and the tenant finds the required finance to buy the market value – saved deposit.
http://www.consumer.vic.gov.au/legalchannel/dojfilelib.nsf/lookup/cav_publications_credit_and_debt/$file/vendortermscontracts.pdf
http://www.lplc.com.au/documents/DECEMBER08_InCheck41_F.pdfadditional resources you might find useful (not a recommendation by me)
see
http://www.renttoownyourhome.com.au/
http://easyhouses.com.au/buying.php
http://www.vendorfinancehomes.com.au/
http://www.haveyourhome.com
http://www.vendorfinancerealestate.com.au/buy-26.htmlhttp://www.webuyhouses.com.au/SC04/SC04_4/default.aspxthis web site has people advertising for vendor finance like you
http://melbourne.gumtree.com.au/f-vendor-finance-Classifieds-W0QQKeywordZvendorQ20financeI put down about $100, it is what ever you can get away with paying to hold the property but you usually have to find the 10% deposit before settlement occurs at a later stage of the proceedings. Your solicitor will nudge you to pay the required deposit in the later stages of settlement.
If you have an impaired credit rating look at non-bank lenders or bad credit home lenders.
What they do is charge you a little bit more on interest and require a higher LVR but you might borrow some of your equity in the existing houses to take out an equity loan to get a lower lvr for the non bank lender loan.
http://www.essentialsofborrowing.com.au/essentials.asp?menuid=48&HPCatType=5
http://brokernews.com.au/contents/details.aspx?id=5680&tid=&ctyp=&p=1
http://www.getloanbadcredit.info/
http://www.xinc.net.au/home_loans/faq_credit_files_bad_credit.html
http://www.redrockmortgages.com.au/bad-credit-home-loans.htmI haven't been in your situation but I did a mortgage brokers course 2 years ago.
Always work backwards.
What is the sales commission to the agent cost?
What can you sell the finished property for. You can only get what the buyers are willing to pay. (Final Proceeds)
What will be the advertising /marketing costs.
How long is the development going to take to complete and sell. Every day you hold onto the project costs you interest on the loan this is known as holding costs.
What is the building costs of the buildings.
What are the council DA application costs
What are the architect costs
What is the cost of buying the original property.Profit = Final Proceeds – sales commission – marketing costs – holding costs – building costs – council fees- architects costs – original property costs.
This is a rough example you need to get books on development as I haven't done it myself.
I attend an investment meeting in Melbourne that discusses this sort of stuff.Yes it is confusing this statement below is the cause.
you or your spouse (including de facto spouse) have not resided in a residential property in Australia in which you acquired an interest, on or after 1 July 2000 for a continuous period of at least six months
reference from
http://www.osr.nsw.gov.au/benefits/first_home/faqs/fhogs/eligibility/
If you have owned a PPOR (to which you have said yes) – then you do not get it. {scott's comment}if you resided in the property then it is seen as PPOR
strangely if it had been an investment property after 1 july 2000 and you didn't get the grant then you have not resided in the property and are eligible for the grant.
if you are like me and purchased the investment property before 1/7/2000 then you can't access the grant even though the next property would be your first PPOR house.
Price will determine where you can invest in Melbourne. You could pick up a house in Cranbourne for $240,000 – $300,000.
Cranbourne has a train line and access to Eastlink in a round about trip. Be careful avoid houses near the old tip site if they are offered to you for a really cheap price if you decide on Cranbourne.turn up to this meeting held in North Blackburn each month next one is Monday 6th July
see post below
https://www.propertyinvesting.com/forums/property-investing/general-property/4328162
or
http://www.activepropertynetwork.com.au/I may have misunderstood your question so I will rephrase it.
You are suggesting borrowing money from the investment property Loan or equity loan and then using this loan to pay for your PPOR non investment mortgage.
You cannot claim negative gearing as the purpose of the loan is not for an income producing purpose but rather to pay off your PPOR mortgage.
A better move might be to get an offset account attached to the PPOR mortgage and put the 50k in it plus the rental income and your wages. Go and ask your bank if this is possible and if it is worth doing.If you have had a child you may be over reaching your financial situation with two investment properties at the moment and a PPOR.
With the offset account you reduce the interest charged on the PPOR mortgage and if your circumstances improve later on you can take the cash out of the offset account and use it as a deposit for another investment property.
If instead you decided paying off 50,000 off the PPOR mortgage it is more difficult to redraw later and claim the 50 ,000 part of your PPOR Mortgage as an investment purpose.Is it worth negative gearing ?
What max tax rate is your partner on 30% ?
If it is 30% then you have say as an example $10,000 in loss then you get $3000 back
So you are losing $7000 a yearThis doesn't take into account if the investment property is joint owned as if it was you would not be able to claim 50% of the negative loss due to you not having a job with taxable income.
Also I would like you to be aware that the $10,000 net investment property loss or investment shares income loss is regarded as income for family payment calculations or parenting payment by Centrelink. They add the $10,000 back to the assessable income and deem your income for you payment calculation and you actually lose $7000 which is regarded by centrelink as income.
Another thing to consider was the inherited house a PPOR and you are now renting it out. You may need to get advice from an accountant to advise if capital gains tax is liable on the inherited house and what records need to be kept.
see
http://www.ato.gov.au/individuals/content.asp?doc=/content/36596.htmor if the house was an investment house and you inherited it you may need to get advice from an accountant to advise if capital gains tax is liable on the inherited house and what records need to be kept.
I was driving a 1986 Toyota Cressida but it needed the front steering rack replaced $1000 and the Alternator $400 and the rear leaf springs are dicey. So I have $2000 of repairs for a car worth <$1000 So I have just lashed out an got a $5000 car a 1997 Magna while the other work car is a Falcon A series car $10,000. So no BMW however if you were to buy a second hand BMW you could pick on up for <$10,000 and still look like a rich person until someone gets jealous and scratches your BMW or lets all the tyres down. Saw this had been done on a Mercedes however it was a second hand mercedes but the unknown perps probably didn't think of this when they let down the tyres at my local shopping centre.
Dan42 wrote:The superannuation is being added back, I think, because people were rorting the system. People were salary sacrificing amounts to avoid child support etc. If you can afford to salary sacrifice super, you don't need government welfare payments.Child support maybe but not families that are trying to improve their lot over the long term. Yes it has been years that people who suddenly loose their job or can't find work have been discriminated against that is why I haven't invested in a negative geared propery since 2004 due to this idiotic non accounting standard definition of income scheme and had to kick out a tenant when I sold my negatively geared property in 2004.
Strange isn't that Centrelink does not regard a negative loss as an income loss but readily deems a capital gain as income for Centrelink purposes and clawing back payments.
Thanks for that. I don't have a steady two year income stream yet had to sell most of my shares to avoid the market collapse. Also the private business I am running has not made huge income yet ,but that's cause I am running it part time as well as being house dad.
My two kids start school next year !
Who knows might be able to spend time trying to get a JOB or trading in options.It varies with lenders you will have to ask the lender if they capitalise the mortgage insurance costs and stamp duty. And ask what max LVR they lend to.
I am having the same problem , Came out of University and found no one will employ me – Now currently not looking for a job until at least the start of 2010. House Dad – Wife works. But income not enough to borrow more than $70,000
I have $180,000 in equity but no regular (Just Over Broke) income
I have rental income and could produce income from the share market using covered call option selling but the bank told me they do not include share market income into their calculations. What is annoying for me is I do not have a mortgage expense or a rental expense but the bank doesn't factor this into their calculations they rely use a computer program that is inflexible.I am currently borrowing less and investing it in the share market as the share market lets me buy in smaller parcels than investment property , I can invest as little as $500 for each share. (However I know what I am doing with the share market – not for novices as higher risk profile)
If you property has risen in value it would be prudent to get as valuation to get a cost base recorded when you change the use of your property as this is a CGT event. You will find out about it when in the future you decide to sell and find you have a Capital gains tax liability.
