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Yep thanks!
I am in a similar situation here in melbourne. I can buy from a motivated seller / investor who needs to sell her place. She wanted 350 – I will offer 300, it is in need of a BIG clean up, new kitchen and bathroom, carpets, paint, etc My idea is to offer her less for it, maybe even 290.. with a larger deposit of maybe 20 -25% with a longer settlement (say 120 days if i can get it) boot the tenants out in 60 days, agree with the owner that I can have access from that time to start fixing it up, and hopefully get it back on the market before I have settled on the purchase – but not sure of the legality of doing this,….anyone have any ideas?
Thanks All!!!
What does it mean when oneiricer says "……when you sell the house, the value of the house is the depreciated value, meaning you're gonna cop it big time with capital gains when you do sell the house".
Confused.
oneiricer wrote:its more like neither. putting enough of your cash into deposit isnt such a great idea as it means your cash on cash return will be significantly lower than puting in the bank. This just means that you're probably better off putting your money in the bank, earning monthly interest in it (risk free) than putting it on a house.Your second method works, but is only good when you cash your cheque in from your ATO. you're still incurring negative cf during the whole year, and not to mention, when you sell the house, the value of the house is the depreciated value, meaning you're gonna cop it big time with capital gains when you do sell the house.
the only way to satisfy the above is the manage the deal so that it is works. and thats the very, very difficult bit.
I think Todd has hit the nail on the head, and it typifies our situation. We are unsure what we want ! Doing this has forced me to actually view it more dispassionately.
I suppose we really want to have a little non deductable debt as possible, which is why selling the home is good. It also relieves the burden of cashflow out while school fees are so high. I would like to grow our wealth that’s for sure. If we buy another cheaper place for 850 – 950 then we will have a smaller more managable mortgage leaving us more cash for paying it off quicker. We can also use it as collateral to buy more properties, then all that debt is tax deductable – no bad thing.
perhaps I am missing something, but if the tenant contacted your property manager, it is they who should have arranged for a plumber to fix it. And in doing so, if there was reason for a second call out, they would have known and got the plumber who attended to go back out and sort the blockage, saving you the headache, and the extra cost.
So, maybe let this one slide, but change the process for next time.
Cheers
