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I was watching a business program on ABC last Sunday morning and the discussion of concern was that an extended FHOG would create an explosion in inflation once the world wide down turn ceases. One suggestion was rather than a free handout of tax payers money it could be a loan scheme similar to the HELP used for university students fees.
Make sure you have adequate insurance like a landlords insurance
If you owned the property as your main residence and you plan on getting another place as your main residence then a valuation may be required to create a cost base for your investment property for capital gains calculations in the future.is 5.8% the cash rate given by RBA because if it is the bank doesn't lend money at this rate but adds a profit margin to it to come up with lending interest rate. Check with lender before borrowing and also what the fixed interest rate is.
Haven't done it my self but read about it in a book called unlimited cash flow.
Usually the vendor is compensated for this finance they are providing you. Maybe you offer to pay the full asking price for the benefit of a finance. Or you offer to pay interest on the amount you have borrowed from the vendor when you pay the balance off in 12 months time.Contact the real estate agent and explain the situation you are in.
Not sure what the go is in SA but you could be hit with lost rent, advertising costs and the lease re-letting fee
shel25 wrote:Also, I am very close to becoming positive geared > is this a good thing considering I would need to pay tax rather than receive it?
Would you rather on a marginal tax rate of 30%
lose 70% but get a tax refund for the 30% for expenses paid- negative gearing
or
make a small income and get taxed on 30% and keep 70% of the income- positive gearingLine of credit is a facility you set up. So that when you need access to the cash you already have the loan approved and the cash available. You are not being charged interest until you take the cash out of the facility you have previously set up.
Not sure of equity loan but it sounds like you would be paying interest but the offset account would counter act this.
Have you approached non-bank lenders
go to google and type in the search box the following
bad credit rating refinanceor
bad credit debt consolidationthis web site looked interesting
http://www.fundsnational.com.au/You may need to use a mortgage broker that specialises in bad credit loans . It saves you time searching all he banks
google search for
Bad credit mortgage brokerdo a search on the internet
see
http://www.baselesshappiness.com/blessings/about.htm
as an exampleIt is not related to how much you spend on your property rather what you need to look at is what do similar properties in similar condition rent for in the location your house is in. This is called market rent a similar process occurs for the actual market prices for houses that are sold.
If you already have a tenant then you have to be careful not to increase the rent massively in one hit as the tenant may complain that the rise is excessive. How would you feel if your rent increased by twenty percent in one hit.If you rip down the cover and have it rebuilt you can claim it as an improvement and claim depreciation on it. It might be deemed an improvement as it is being improved beyond the state it was in when you purchased it and you are not repairing it as you are replacing it entirely. This is a grey area of tax law and it most likely will be deemed an improvement rather than as a repair it might be worth discussing with your accountant what they think will be the ruling.
I had to replace a gas hot water system due to the government changing the laws pertaining to gas hot water systems being inside bathrooms. Strange really as the house was ex housing commission which meant the government put the gas hot water system inside the bathroom in the first place. What really annoyed me was that I only found out about the law change when a plumber came to service the hot water system and advised me of the legality of my hot water service.
I have a friend who owned a house with a mortgage and her defacto partner came home on day and said I am leaving you. She had to find somewhere else to live. This requires her to pay rent which she cannot afford as she was re-trenched from her job and has a young boy under 4 years of age. So she goes to centrelink and says she needs assistance. Centrelink says to her we can't pay you unless you have left your defacto. She says I can't leave my defacto unless you pay me so I can pay rent. Later on this mind numbing bureacratic bullying of course gets her stressed and she ends up on life support for 3 months fighting pneumonia luckily her employer keeps her recently acquired part time job open for her. She still can't get payments as her defacto has trouble selling their house and she owns half of it so she has assets according to Centrelink.
As a house Dad I could get about $60 a week in parenting payments but I reached my tolerance point of bureacratic bullying when the health care card form reached 17 pages that I had to fill in every 6 months; having a negative geared property deemed as income; having complicated financial affairs that makes the filling out of Centrelink forms a nightmare every 12 months and being told I would have to fill out another form for my old non profit business.
That was about 3 years ago I can't cope with dealing with Centrelink and have been running a part time business that brings in about $60 a week for the last six months now that my twin daughters have reached kindergarden. I also do not get Family B payments each week as that is another nightmare I rather avoid my getting my tax return to work out the payment rather than having to report my income every six weeks to Centrelink.If you have no assets, are single and have no income filling out the forms and getting full payment is a breeze.
This is how the system works!
The welfare system is designed to keep you in a welfare dependent state.As soon as your step daughter tries to get back into the work force by working part time as required by new rules when the youngest child gets to school age. The Welfare payments will be reduced while at the same time your step daughter will have the costs of child care rise as she will lose some of the child care benefit as well. If she is in a housing commission house her rent goes up also. If she buys an investment house that is negatively geared the loss if deemed as income so as to guarantee she can never get out of Welfare dependency. If she decides to run a home business she has to also fill out another form stating her profit or loss so as to have her benefits reduced.
What would you do in this situation if you were her. Have another child when the youngest gets to Four years of age ?
Callum,
With interest only and an offset account you can save money in the offset account that can be used later for any purpose or as a deposit for your next property while at the same time reducing the interest charged on your loan via the offset account.
Your loan principle doesn't alter if you use the offset money for some other purpose.If you go principle and interest you are reducing your interest and principle but you have to redraw the money if you need it later and this makes it hard to claim for tax purposes.Because the ATO will notice the loan jumped up with the redraw and will be questioning you as to why it jumped up.
Are you prepared to travel a lot. You may be required to go to interstate seminars. I once saw a job advertisement for real estate agents that would train me but when I spoke to them they told me about having to travel to seminars and I had a young family so it did not suit me.
If I was you I would start by walking into a real estate agents office and say to them this " I am interested in finding out about your business?"
and they will most likely respond with
" Why do you want to know about my business"
then you say
"Because I am really interested in Real Estate and am considering changing careers to be a real estate agent and want to know how to get started and what is required."Think of what questions you want to ask prior and ask them try not to tell them about yourself unless asked. You want them to be excited to tell you about their business. This is the art of selling.
check out this web site
http://www.pittard.com.au/careers.phpGood luck with your endeavours Blaze hope this helps you
This is one of the most common wrong things to do to activate a tax audit of your tax affairs by the ATO as they look for this common mistake when checking tax returns.
You offer property as security against a debt. If you go bankrupt the lender takes your house.
- Positive is interest rate is lower than unsecured debt and over a greater time frame.
Usually used when a person has lots of equity in their house and has a massive load of debt on unsecured loans like credit cards, personal loans, store card loans, loan shark loans, ect
These loans are consolidated into one loan against a property and all the unsecured lenders are paid out.
Or added to an existing secured loan like an existing mortgage or refinanced mortgage.Negatives
- If you go bankrupt you lose your house.
- If you can't control your spending you just clock up more unsecured debt on your credit cards, ect
- You may not have enough equity in your house to do this.
- You may already have a bad credit rating and have to use a non bank and pay a higher interest rate than you normally do with secured debt.
see
http://www.creditcard-debtcoach.com/Secured_Debt_Consolidation.html
http://ezinearticles.com/?Secured-Debt-Consolidation-Loans:-Bringing-Down-Your-Debt-Count-to-Zero&id=115373You may be thinking of cross co-laterisation across many properties
You take all your properties and use them all for security against the loans.
This way you do not need a deposit to buy more property just increased equity.
If you go bankrupt or can't pay a loan on any of these loans you could lose all your properties.If you are thinking of doing it in the USA you need to consider who is left in the suburb/ town to rent the property as people have been laid off and left the town. Also every third house is in the same situation in the street.
Do a search on UTube for abandoned towns or abandoned cities.
http://www.youtube.com/watch?v=9jLYSxbsE-4option one (modified)
Say the rent was 400 per week and expenses are $2,000 a year (Rates, Water, Insurance, Ect) Then $20,000 per year -$2000 is $18,000 in probable rental income. So $340 a week in income. If you had a 20 year loan and got the balance down to $140,000 the loan would cost you nothing as the repayments and interest would equal the rental income minus expenses based on an interest rate of 10.5%. So in option one instead of totally paying off the loan you pay it down to $140,000 you will have at least
$210,000 in equity ( $350,000 – 140,000 = $210,000 ) to use for an equity loan for the deposit on the next property. At the rate you are paying the loan down at that would be about march 2014.I have paid a house down but it took 15 years and I have reborrowed a small amount to invest in the share market. But when I was thinking about it in my head I would be better off with paying down a loan to a cash flow neutral state rather than breaking my wallet trying to pay off the loan completely on an investment property.
If you go down option 2
You will need to save up a deposit and stamp duty and legal costs.
It will be hard to borrow against property one as an equity loan will be based on 80% of the house value minus the debt owing
Where do you live in the mean time.
Property one will need a valuation done before renting it out for CGT records.
If you lose a tenant you could be under financial strain until you get another tenant.41419155 wrote:okay i'm in pretty much the same position as "anythings possible". i tried to get a standard loan from one of the big 4 and i kinda felt a bit ridiculed when they turned me down. now i know that i'm risky. so conventional ways of borrowing arent the way yet.so how, what shoudl i do, to find people that would be willing one to borrow me there money (seeming i have no practical experience) and two how does bird dogging work in more detail please? i see deals quite regularly that would be great positive cashflow investments but i don't know how to find the money or the people to off load them too. does anyone have any suggestions on what could be my next options? i've been mulling over this problem for quite some time and if i'm honest with myself it has been too long. i want to get into … it is time. i'd like some more experienced approaches or fresh approaches in order to kick start my ideas back up.
thank you for your help
Don't take the bank's rejection personally – The banks only see income from 70% rent and 100% income from a job as acceptable. I am in the same situation as I went to Uni and came out to four years of unemployment and have not been able to borrow more money even though I have $200,000 in equity. Low doc loans are getting harder to get with the credit crunch.
My advice to the original poster is try and get a part time job while at University as employers are really overboard with expecting recent graduates to have work experience when they come out of University in order to get a job.
I am currently looking for an apprenticeship as I wasted 3 years doing a degree as it is worthless if no one employs me.
