Did you ask your (ex)mortgage manager wether they would have allowed you to draw equity in the form of another loan?

Maybe they couldn’t/wouldn’t so your broker went elsewhere …i.e directly to the bank ?.

Don’t get me wrong. I am certainly not trying to find him an excuse. Whatever the reason for his actions he should have sat down with you first and explained all the costs and ramifications of what he was going to do. His actions were 100% wrong.

I’m also a bit puzzled at the high breakcosts. I thought that if you terminate a fixed loan early but the interest on the loan is lower than the current interest rate (by your post 0.75%) then the bank is actually happy. It can now lend the money at a higher rate so your break cost are negligable or even zero. I thought the break costs were to compensate them for loss of interest. Am I wrong?

Let us know how you go.
Good luck
Elka

Hello Hemma

What a lovely offer. [thumbsupanim]

I wish I had something that needed an artists impression. However, I’m sure someone is developing at the moment and will take up your gift.

Good luck .[smiling]
Elka

“On the question of capital gains: why is considered that I am paying him 50%? “

Hello tera

Because you are or should be. Partially in cash and partially by taking over his share of the mortguage.

“e.g., Unit bought for 170k, after refurbishings is worth 200K, but we could sell maybe for more, say, for 210K. difference= 40K, profit each= 20K

I pay 20K to him in cash, and he signs over the property, loan, back to my name. “

Actually I don’t think your calcualtion is correct. It fails to take into account his share of the deposit and any repayments he has made together with you on the mortguage (assuming PI).

Assuming you both paid half for everything i.e deposit, buying costs such as stamp duty and conveyancing costs, renovation costs and mortguage repayments the easiest way to calculate is to simply think of it as a sale to a third party.

New value of house $210,000, partners share $105,000.

Mortguage left on house is, for example $140,000, partners share $70,000.

$105,000 – $70,000 = $35,000 This is the amount you owe him in cash.

Or maybe it’s easier for you to think of it this way.

New value of house $210,000 minus $140,000 mortguage = $70,000 cash left after “sale”. Half of that ($35,000) is your partners.

Wether you have both actually made a profit or not is dependent on how much you spent on reno plus all the cost of the purchase.

Hope this helps [smiling]
Elka

Hello joelc

I don’t think you need to panic.

Stamp duty is not a charge by the bank …. like valuation fees or loan establishment fees… which you would have to pay since, by signing the contract, you had agreed to do so.

It is a charge by the SRO and the amount is fixed based on their rules. It does not matter what the bank wrote. It matters what the SRO charges. The bank just pays it to them on your behalf. In your loans contract the bank would have filled in an estimate of your stamp duty but if it’s wrong I don’t believe it effects your contract.

It may be that if you first buy a block of land and then contract to build a house on it you only pay SD on the land, but if you buy a land and house package it’s on the full amount. I don’t know. I’m just speculating.

Why don’t you ring up the SRO and ask them what the stamp duty should be in your case.

Have you settled on the land yet? If you did and it was a couple of months ago then check your bank statements to see what, if any SD has been paid on your behalf. It’s not done at settlement. It’s done later and you should be able to see it as a seperate payment..

Even if there has been a mistake made it can be rectified. On my last property the bank overpaid $3K SD on my behalf. As I suggested to them, it turned out that someone had incorrectly reported how much I had paid for the property to the SRO. The bank reimbursed me the $3K plus the interest I had paid on this amount.
They would have gotten the money back from the SRO too.

Let us know how you go please.

Cheers [smiling]
Elka

Hello pauldwilson

This question has been covered many times in the forum and I think it’s fair to say that most people don’t like this as an investment.

If you use the search function (in forum drop down list above) and search for hotel rooms you will find many interesting threads.

To start you off here is one I found for you

https://www.propertyinvesting.com/forum/topic/25370.html?SearchTerms=hotel,rooms

Hope this helps. [smiling]
Elka

Hello summersky

Here is a link to an investment calculator which may help you calculate what rate of return you need to achieve for x years to get you to the income you want to have at retirement.

http://www.landausecurities.com/calculator.asp

Maybe it will help you calculate how aggresively you need to invest to reach your goals.

I am definately NOT recommending the site and naturally they are in the business of selling you investments.

B.T.W. I also don’t agree with your investment planners suggestion that you only need $40K income in retirement. In my opinion one needs more income not less in retirement. After all you have more free time to spend it in [biggrin].

The days when retirees disappeared behind their pot plants are long gone. As you say , you want to travel and I am sure that you will find may other great activities to persue after you retire. This all takes money.

Hope this helps. [smiling]
Elka

Were you ever in doubt?

Who was it that once said that the first million was the hardest.
I think we now have to up that to 2 or 3 million. Inflation you know. [cigar]

Hello trajik

I think summersky (nice name) means that she/he pays an overall rate of 27% (i.e some at 0%, some at 16.5% and some at 31.5%).
That’s possible. [smiling]

I am struggling with the question of to Super or not to Super myself. I am even closer to 60 than you Simon [thumbsdownanim and don’t have any Super at the moment..

I have residential IP’s (3), 1 commercial IP, shares and cash but really need to do something to increase my income on retirement . So what to do. Another commercial IP? Managed funds? Super?

Actually every time I read the posts about the finacial armageddon we are facing all the options seem scary. After all if both property and shares are due for a major downturn then the only “safe option” is to put all your cash into a high interest fixed deposit account within a SMSF and just live off the tax free interest (less that years inflation) at some point. The ultimate zero risk strategy?.

However, I have never been one for zero risk strategies though I do not have the temperament to live off equity. [blush2]

Yes, I will be getting professional advice (though who do you listen to?) but would appreciate any comments or suggestions.

Thanks [smiling]
Elka

“I await the blatantly obvious to be pointed out to me, but looks like a good deal.”

Hello d_robb21

The problem is that the rent is $100 per MONTH not per week.

Unimaginable to us here so it’s very easy to miss.

Cheers [smiling]
Elka

Hello CT

I can’t find the post but if I remember correctly, not so long ago someone posted that there has been a ruling from the ATO that you can not use income from an IP to reduce personal debt instead of paying off loan against an IP and still claim full tax deduction of interest for that loan. In other words you first have to use the income from the IP to offset the expenses.

Correct me someone please it I am wrong.

Cheers [smiling]
Elka