Forum Replies Created
Perhaps tell us what the property group is called. I’m sure someone from here has probably delt with them before.
As diclem suggested check out everything, and don’t sign anything!!! Also alot of the time property resellers won’t put vacancy factors in (so vacancy will equal 0%) to make a deal seem CF+.
Rgds.
Lucifer_auWell there is a few ways, get the property revaluaed in 6 months and see if the banks will lend you more.
The otherway is to add the rent to your income (and deduct the mortgage payments). THis calculator will give you a general idea on how much you can borrow: http://moneymanager.smh.com.au/tools/calculators/borrowingpower.html
Otherwise it means saving up 20% for no/low docs home loan (or borrowing of family/friends).
Rgds.
Lucifer_auI don’t know what you are trying to achieve here???
Mainly because people who do wraps and LO want to be in control of the property. Already with a LO/Wrap there are three layers Bank->Wraper->Wrappe; You are suggesting Bank->Wraper->Wrappe->New Buyer. This means that if you do not pay the loan and we foreclose on you, what about the people who are LO the house off you???
For me you are not giving any tangible benefit to the orignal wraper or LO writer. In fact you are increasing their problems if they have to take back a house.
Lastly why would they give you a wholesale deal?? I understand that you will pay when their is no tenant, but if the wraper should be able to afford to keep the payments up (if they can’t then they shouldn’t be wrapping), and the problem with finding new buyers can usually be fixed with advertising…
To much risk for not enough reward for me, but I would be interested in hearing about how you overcome these short commings.
Rgds.
Lucifer_auDifferent markets across NSW will behave differently.
Too true!
My opinon (which of course is not fact) is that people will be reluctant to sell, and with rental stock of 3Br houses, rents could actually go up (as less investors are buying).
On the other hand their is the huge oversupply of inner city appartments. So that could hold some areas rents down (city locations).
I found this interesting prediction (on http://www.StrategicWealth.com.au)
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It also appears that there is no allowance for indexation in the proposed legislation, thus land values will increase and ultimately the $300K land will become $450K in a few years and into the next bracket. Rents will have to increase to cover the impost on the investor.The worst affected will be the battler (who rents) and the self funded retiree with 1 or 2 investment properties that cannot carry the land tax burden in the short term. The main advantage is for those that have investment properties in Discretionary or Hybrid Discretionary Trust as overall they will pay less land tax.
The initiatives for the first home buyer are great, however the cost of the stamp duty on sale will be ultimately borne by the purchaser which may well include these people anyway.
Most sellers not forced to sell, know how much they want in their hand after agent fees etc. This stamp duty will become a function of the sale price and may well force prices up!
—As for the future – who knows! But thats the fun of it!
Rgds.
Lucifer_auOnly in very regional areas, but yes that is true.
Go here to see how much one of the two Mgt Insurers will allow you to borrow on a property in an area: http://www.pmigroup.com.au/LocationWizard.asp(As Derek suggested, Banks will offset their risk on to Mgt Insurers, so in the end they determine how much you can borrow). Also price impacts on how much you can borrow, and so usually you will be able to borrow a large % (so over 90%+) if you stay under $150K.
A good mortgage broker will advise on this issue (they mostly hang out in the Finance section).
Rgds.
Lucifer_au“About the reasons why to use it for purchasing properties. And the reasons why not to put it in your own name.”
>Basically it comes down to taxation and asset protection. If you get sued personally, and you hold all the properties in your own name – you could lose them all. This is a very dangerous situation if you have spent alot of years accumulating. Therefor you put the assets in another corporate entitiy, so that if someone sues you, they don’t get your assets. Also using trusts you can distribute income to the lowest earner (depending on how the trust is set up), as well as more magic tricks to make your tax reduced.
“Trust Magic i’m not to sure off because all it will do i think is show me ten different ways the invest and use trusts and confuse me! Though i may buy it.”
>You haven’t seen – but your guessing at what it is going to tell you – talk about judging a book by it’s cover!! I would highly suggest you buy it. First off it only talks about 3 different trust structures, depending on what you are looking for (tax write off, etc). Also it has… magic tricks to make sure you only have to pay a very small % to taxes.
Rgds.
Lucifer_auJust a point, banks lend up to 95% (you have to pay mortgage insurance [which protects the banks not you] but you can add that to the loan, to reduce your initial cash outlay).
Also you should keep 6%/7% (of property price) for closing costs.
John Burley’s book called Money Secrets of The Rich is very good. Most of Robert Kiyosaki’s books are good mind openers too.
Rgds.
Lucifer_auThere are a lot of people are buying CF+ properties in QLD.
Why don’t you target that area first, for for your first IP???
Also I don’t think anyone going to write you a list of which town are profitable or not. Thats for you to reasearch. Contact Westan (he is on the forums) if you still want to buy in NZ.
Rgds.
Lucifer_auAs Dereck mentioned the conditions usually specify that you must live on the property, and some even specifiy that you must commence building a dweling by X date.
As for your second question “has [anyone] actually made cash from cheap country properties??”
You must be more specific… Do you mean selling the properties (flips) or wraps or buy and holds??? Each of these give you cash, but one might be useless (such as buy and hold) if you want the money now…. Check out http://propertyinvesting.com/strategies for different strategies…
Rgds.
Lucifer_auYou haven’t told us what rent your house could achieve. Without this it is hard to say, also do you want CF+ properties, or are you willing to have some Neg geared, but high growth prop.???
Rgds.
Lucifer_auThe problem with super is you have no control over it (unless yu have a DIY super fund), you don’t control when assets are sold or when they are taxed, you don’t control what the fund is investing in, nor management of the fund and lastly many super funds have no downside risk control (through the use of options), so if the market falls big time (think back to the NASDAQ) you can lose everything, and because you don’t cntrol the tax situation, still be taxed on it.
That said super is better than nothing, and if you can find a good fund manager, it might be worth it. But I simply see Super (with Managed Funds) as enforced saving (Not investing).
There are two routes you can go to rectify this – setup a DIY super fund, or use the money to start investing in property.
As geo suggested start by paying off your house, as the interest off that is not tax deductable, also if you are forced to sell you have a asset that can give you alot of cash. Also you pay your house off, you’ve got more money for investments!
Rgds.
Lucifer_auAlso check out Anthony Cordato. He is in 16-20 Barrack St, Sydney, 2000.
His phone number is 02 9290 2773.He has a very real understanding of wraps and LO.
Rgds.
Lucifer_auWell you trust would have to pay stamp duty, when it buys your property, and of course CGT when it sells it.
I do not understand why you are wanting to put your PPOR in a trust… Is for asset protection or too simply borrow money??
If it were to simply borrow money, I would talk to a mortgage broker, as you should be able to use the equity in house to lend to the trust which will then place the deposit over the property and the banks will then lend to the trust (you will still have to sign a guarantee).
Rgds.
Lucifer_auPretty much all deceased estates managed by the state tustee, goes straight to Auction (unless the people who inhert want to sell it privately).
I guess you could scan the obituaris, find the names and then ring up those people. But I don’t think you would get a good response at all. There are no registers of deceased estates to my knowledge.
Rgds.
Lucifer_auVery boom and bust… Mines go through big cycles (so when it’s good, it’s good, but when it’s bad, it can be real bad…), and at the moment were on an large upturn, though apart from China the market is quite weak. Don’t make any long term decissions based on the current situation. Also as Angus mentioned see how long the mine life is, as short could mean all your potential/current renters move on…
Rgds.
Lucifer_auI thought it was illegal to have your loan higher than that of the new buyers (so it isn’t illegal to use IO loans, sorry if I confused the issue here).
Using I.O. loans are more difficult because you have to work out exactly when that event occurs (the event being you owe more than the wrappe).
That is MY knowledge of it though – And could be COMPLETELY wrong and incorrect. But considering this is your first wrap, it’s best to keep it simple as possible. Perhaps Felicity (wrapper extraordinaire – Your reputation proceeds you!) could help us out…
Rgds.
Lucifer_auWell it depends on how far you wish to push – use the baby in a advertising campaign (do a deal where you pay royalties).
Just maks sure it’s similar enough to a commercial deal – but otherwise, as I suggested before, get Trust Magic (p://www.gatherumgoss.com/shopping.htm). It contains all these details and alot more (so you will be paying almost no tax).
You probably wouldn’t try to use your 18 month old child, but the eldest could do administration duties for you. Or use some of the suggestion Trust Magic contains.
Rgds.
Lucifer_auI don’t understand your Q’s jaffasoft, so I’ll have a crack at it.
After the 15yrs, you can refinance the loan (get a new I.O. or P&I loan), or pay off the $80K. But either way you will have to lump up $80K to the bank (unless you refinance through them).
Rgds.
Lucifer_auTry the auctions, then your just looking for installation (which should be $600).
Rgds.
Lucifer_auIf they do not work the maximum amount you can pay them without going over the child tax rate is $643 (over this amount and they have to pay 48.5%l, so the highest marginal rate).
If they work for you however you can pay them as you would pay a normal person. Of course homework is NOT considered work [
].Check out a manual/book called Trust Magic (p://www.gatherumgoss.com/shopping.htm), I think it would help you out in your quest to reduce tax.
Rgds.
Lucifer_au
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