Forum Replies Created
“Forget about the cheapest rate; the cheapest rate isn’t necessarily the best product”
I am always curious why people spend so much time trying to get a point off here or there when there are bigger issues to look at.
For example I would rather pay a much higher rate and get a higher LVR or a personal banker than always just trying to get the cheapest rate… In some ways you can get what you pay for.
hellman
“thanku simon!! can u recommend any one in sydney at all that is good and reliable ?”
Now days with the internet (and faxes /express post) using an interstate mortgage broker is not a problem. From memory Simon has a presence in Syd as does Terryw (who is also on this forum).
“and how much do they usually charge for this???”
Nothing! The bank pays them – you don’t have too! The banks see it as a cost saving: paying one broker (paid only when a loan settles) vrs running a whole branch network).
hellman
Accordingly Ed Chan’s Property Trust will now not be able to claim the discount eitheir.
hellman
Approx. $120,000 (based on living on $250 p/w).
Check out the ‘How much can I borrow?’ claculator:
http://www.anz.com.au/aus/calculators/default.asp?from=anzhpHellman
Just use standard Taps (and other plumbing items) not the european taps (which are non standard, and do not fit our appliances!!!!).
hellman
Although most people who negative gear actually lose money, they make it up through capital gains (sell or revalue (you can live off equity, though there is much debate about this strategy)). Or if you pay P&I (Principal & Interest) over time as rents go up, but your mortgage repayments stays the same the rent will overtake the repayments creating a +CF situation.
In your example you forgot about depreciation write offs. This is a non cash deduction, which means you get a tax break for investing in housing. Usually depreciation can be between 1-3% of a houses value, and in Australia you can apply that aginst other income so your taxable income is reduced.
So for your example, based on your figures:
Who Pays What (over 20 years)
Tenant $584,462 100.36%
Tax Dept. $34,555 5.93%
You ($36,625) -6.29%
Total $582,392 100.00%This property will pay you: $29.07 per week after all expenses.
So if your property rises more than $1,560 per yr, your making $$$.
hellman
Also a lot of the time the ATO likes to bang the drum of publicity for a few different reasons –
~ It scares people who are cautious and so they won’t use trusts (and so will probably pay more money in tax);
~ It shows the taxpayer / middle class (largest block of voters) they are doing something – ‘clamping down on the rich’;
~ It warns people who use trusts not to go too far in claiming deductions (so cautious people might not claim everything they can).hellman
As long as you meet the banks criteria then it is possible. Of course it does depend on the amount you wish to borrow (usually personal loans are capped to a maximum amount).
Do we place current PPOR into trust? (currently in both names)”
imagine taking something from a tax free environment into a taxable environment…….you obviously don’t know the repercussions…i had a laugh there> Why laugh? Right now they are totally exposed to a lawsuit (the risk is usually low anyway, but depends on profession, etc). What would you suggest to avoid this problem? I am not suggesting a trust but I do know rich people who have their own personal residences in some sort of biz. structure.
If I were troynbec I would however do what you suggested (through you stories) and work out what would you do if you couldn’t sell the proeperty at all or you could only sell at 85% FMV (fair market value).
Steve has the same lesson in one of his books (I think his first one) where he details a reno he did with his biz. partner and father. It didn’t really work out at all and cost them time (and potential money). Of course it wasn’t too bad but now with the boom over it is harder to sell (when Steve sold I think it was just a bit before the boom so the market was still quite boyant).
hellman
There is really no real ‘note’ market here in Australia.
But really all a note is, is a binding contract. I guess the main difference is the fact is that in the US it is seen as an instrument more (and so can be bought and sold).
hellman
“Brokers can be great, however, if you do your own submission in a professional manner and send it to different banks you may be able to complete the deal yourself. The last broker we used cost us $5000.00 and the bank manager told us we should have just come to him in the first place. $5000 could be a house deposit!”
While that may be true, the broker finds the person the best loan while a banker might not charge you a fee but they only have their product, so you may miss out on higher LVRs, or other features because one just goes to their regular banker.
Hellman
We don’t really have mortgage sales here like they have in the US. Usually it goes to public auction by a local RE agent (usually they will put “Mortgagee Sale”in the property description).
As such it is very difficult to almost impossible to buy house that has been forclosed upon privatly.
“Back in ’97 when we were completely unaware we sold our 2nd IP to a “and/or nominee” and got royally done over by the wily next door neighbours. Cost us 16K.”
Dazz – how???
I would always use a broker when obtaining finance.
At the end of the day the mortgage broker gets paid by getting you your loan while the bank manager simply gets a bonus. In my mind mortgage brokers fight harder to get the loan than staff do.
As such I would use a mortgage broker (whom has many more lenders on their panel, where as a bank has only them on their panel). Also there are large scale funders that are just as good (alot of the time better) than the banks.
Hellman
You could demand the bank does a revaluation, you will have to prove this though (so you will need to get the average selling prices of houses in your neighbourhood and compare your hoiuse to recent sales – e.g. X house sold for $X and it did not have air conditioning, etc).
Or you could get your own valuation done (see if it’s on the banks panel of lenders) and demand they either use yours or do another one.
Also try to be as friendly as possible to valuers, I mean be extra nice too them. Because they control wether you can borrow more.
Hellman
Property is not the only way to create a passive income, you can have a biz/stocks/bonds/RE notes/etc that can all provide passive income. I like property because it’s stable and safe. For example say you got a manager to run your biz, you now might get passive income, but there are higher risks (for example competition, your product being made obsolete, bad management, etc).
I believe that if you study hard and work at it, being retired in say 3yrs. is not out of the realm of possibility at all. Many people I know who have retired have created their own niche in their market – wraps, L/O’s, etc (I guess that is the thinking outside the box part).
As for finding a financial planner who is free, I don’t think you will have much luck. In fact if they were financially free I would expect them to want more money than even a excellent financial planner. Thats assuming they still work as a financial planer (I bet most would do better things with their time).
Okay there are a few factors heres at play.
The first factor is what is written on the deed of the trust. If he is the appointer then he can hire or fire the trustee (this can be over ruled though). The trustee runs the trust on behalf of the beneficaries. So could this person fire you – if he was the appointer of the trust, yes.
But if you were in a relationship with this indvidual (say defacto or marriage) it goes to the Family Court. The Family Court has the power to do basically anything. They can stop you leaving the country, they can declare sales invalid and did not happen and reverse them, they can freeze assets and bank accounts. They can also send people to jail. They also have complete power over trusts and companies, and they can rip them apart with ease (as if they never existed). Have a quick look here: http://propertyinvesting.com/forum/topic/19604
The other way is to go to the supreme court. You will need to get a damn good lawyer and they will have to advise you. Here its a grey area and as such I can’t really comment.
As for structure, usally the company is the trustee of the trust (so the company runs the trust).
If you are a director of the company, shareholders vote you in or out. Bt pls. remember that the company is only the trustee NOT the appointer (who is the person who actually can fire or hire the trustee).As such if you hold equal shares one can’t vote you out. But if all the assets are owned by the trust the company won’t be worth much.
One solution to your problem would be to renovate the house then remortgage it. Use the higher mortgage amount as payment for your services as the trustee (kind of like a service fee) or as income for you managing the propertty renos. As a side note I would always want to be holding a good amount of $$$ and remember possesion is 9/10ths the law.
Of course you should speak to a good lawyer about this (as well as how to structure it – you might need to see two lawyers – family court lawyer and company/trust/structuring lawyer).
Hellman
If they are good enough for Donald Trump there good enough for me. As such I would have a pre nup, but then I see wealth over a multi generations and as such I’m going to do the best to ensure that. While some people might say I’m setting up for failure, I see it as setting up my future generations for greatness (as well as any charities that I set up).
Also I see pre nups as more of a plan of what happens if… rather than this is your share, that is my share.
As for…
With a broken marriage, a broken relationship and without a wife or/and with hurts and pains all over for all parties concerned and with always an absent parent for my child and having set up a poor live example and wrong role model for my own kids’ future marriage?”B.S. – Sorry but I have seen unhappy families where it is pointless for the parents to be together, but the remain “for the sake of the kids.”
So what do u want to see – 1) A marriage that might have screaming fights and or physical violence, which teaches kids it’s okay to be abusive? or 2) seperate with less fighting?
Think back as a kid I know what I would chose.Also there are more than enough single parent families where the kids have gone on to be extremly productive members of a socitey. As well as loving fathers/mothers (just recently a winer of the ‘Dad of the Year’ was from a sole parent family).
Hellman
“This particular property is a block of 4 strata units”
Banks tend to see these as more commercial in nature and as such the LVR drops say from 90% to say 70%.
Hellman
