Forum Replies Created
I accidentally got 2 depreciation schedules for the same house in QLD. I filled out an internet enquiry form and the company I did that with interpreted it as a request and went ahead and inspected the house without my knowledge (got keys from the agent as the house was vacant at the time) then emailed me the report and an invoice.
However I had done my homework and organised another company (BMT) to do it and already had it completed with them when the new one came through. I mainly got BMT because they had a discount if we had purchased through a particular real estate agent, plus they are Australia wide and we were likely to use them again and again (which we have since done).
The short answer is that yes they can be very different and the amounts you can claim can be very different and amount to thousands per year for many years. How on earth you would be able to know that without actually getting multiple schedules I don't know. On the back of my experience I would pick BMT every time.
Also I asked the other company for a copy of my signed authority to go ahead, which of course they didn't have and so I did not have to pay- they did admit their error in the end.
We had a 4BR house in Moranbah that the original plan was to hold for 3 years. However with events in the first half of this year resulting in enormous price increases late last year followed by mining companies deciding not to renew leases, which led quite suddenly to over 100 vacant houses available for rent, we modified our original plan and sold much earlier than planned. We have no regrets at all, because house prices appear to have fallen since we sold. We have forgone the cash flow and taken the capital gain, but if you sit down and add it up we would have taken years to get the same amount of $$ through cash flow as what we just got in capital gain.
In other words, decide based on what is happening, not a vague " lets sell in a few years time" plan. Sometimes plans need to be changed and adapted for what is occurring outside your control.
At the end of the day when all the mines close and the town turns into a ghost town, you don't want to be the one with lots of houses there with giant mortgages you still have to service.
….Hmmmmm… interesting. Thanks Richard.
A bunch of SMSF schemes just popped into my head that I didn't know were allowed to be in there….
I thought that SMSF loans could not be interest only. In that they by definition have to be P&I in order to satisfy the fundamental super criteria which is to increase equity and maximise the benefit for the members. (which interest only loans do not unless prices go up, which they don't always)
ie to minimise risk they have to be P&I. (Plus the fact that they are limited recourse loans means the banks do not want to fiddle around with anything that has slightly more risk)
Steve79 wrote:The CBA won't insist on you using their planner, so may be worth your while shopping around to find a cheaper adviser if all you are after is a sign off for the loan to go ahead.The happy sequelae to all this is that I have tweaked things a bit and can do what I was planning to without needing any bank.(or planner) Thanks for your input
Smm91 wrote:Thanks very much everyone for the help.
Yes Dubstep, I'm planning to fly in there for a couple of hours this weekend. Do you think $545K all up is too much for a 4×4 ( all rooms air conditioned) house around that area?
House Call, thanks for the link. Are the red areas in the map when you complete a search the flood risk areas?No the red squares are different mackay urban areas. Click on the "Clear" icon and the red bits disappear. It is the irregularly shaped yellow bits are the flood risk areas. You can make them more yellow with the slider thingy
Smm91 wrote:Hello everyone! I am a new member here and this is my first post.
I'm from NSW, but planning to build my first investment property in Beaconsfield, Mackay. It's a land+construction package.
My question is does Beaconsfield get flooded regularly? What sort of insurances are available for flood affected houses? Are those expensive and cover all the damage?
For QLD flood information look at this govt website http://www.qldreconstruction.org.au/interactive-map/then click on the "search" box and type in Mackay.(or even the address)
zoom in and click on the "Interim flood plain assessment overlay" button and bingo, there is your flood risk areas.
Whether this correlates to actual floods I don't know, but for further western towns like Emerald you can get aerial photographs during major floods on the same page by clicking the icons at the top about various floods. Helps you see which bits of town actually went under and which bits didn't.
booge wrote:Has anyone attended a seminar that wasn't a waste of time??Hi I went to a Michael Yardney 1 day conference in Sydney for $99 (+bring a friend for free). There were about 200 people there. I was cynical at first because there was certainly a plug for his mentoring program before during an after, however I had a pad and pen and had decided only to write down things I had not heard before or that clarified things for me. After the initial rubbish I scribbled furiously and filled 15 foolscap pages. It was excellent, and I plan to go to the same one again with a different friend. It was very educational and pitched at uni level audience, with multiple high quality speakers, (who all contribute regualraly to Aust Property Investor or Your Investment Property magazine)
See link below
http://www.propertyupdate.com.au/2012-events/national-property-and-economic-market-update/
Qlds007 wrote:Hate to say if it is a newly formed SMSF a lot of lenders will walk away.We never use CBA for our SMSF loans as their costs and requirements are way out of the market.
Most lenders will require a Financial Planner to sign off that the Investment strategy is understood however you are looking at
$150- $200. Where we are not acting for the client to arrange the loan we charge $150 for the Certificate.Cheers
Yours in Finance
OK so that's a much more reasonable fee to pay. Who would you recommend re the loan, or would you be prepared for me to PM you in regards to this and assist me through your broking business? I can give some more details if so.
Shape wrote:Up to 60% LVR with a commercial lender in the SMSF field is not an issue– however most banks with commercial SMSF will need you to see a financial planner before they will approve your loan, no matter how low your LVR is. Regards MichaelWhy do they want me to see a financial planner? That is the part I object to when my proposal is very simple.
Actually I am happy to jump through whatever hoops the bank wants me to in order to secure a loan, just not happy to be forced to pay $3300 to see the planner when I already have a plan and therefore do not feel seeing a planner has any point to it.
Terryw wrote:It is messy because how do you distinguish between properties. It could disadvantage you later.A LOC should only ever be used for investment expenses. ie You can borrow to pay deposits, pay rates, insurances etc.
using an IO loan with offset is much better for getting incomes deposited, including wages and there would be no tax issues when you withdraw funds.
I don't put wages into my LOC, only rents from the IPs. Wages goes somewhere else.
In regards to disadvantaging me later, do mean in the sense that the ATO may view me as paying some of the LOC off every time I deposit some rent into it and then disallow some of the interest claimed?
So far the most annoying thing with our current use is the mixing of the LOC borrowing for different IPs so that I don't know which IP to allocate the LOC interest against.
But what I hear you saying is that it is ok to use the LOC for all the initial 20% deposits and purchase costs. Then the ongoing costs/incomes go into and out of an offset account against any IP, doesn't matter which because it is saving me interest.
But if an LOC is used in this way, is it not still blurred when the use was for deposits on various properties? FOr example from my LOC I utilise $35k in May, $60k in July and $49k in september all for different properties'purchase costs and I get charged $2500 interest in December. Do I have to be able to allocate or separate that interest into the various properties or is it enough to just say it is all investment related?
(BTW, I really appreciate your help.)
Terryw wrote:I don't like your LOC method because you are paying into an investment loan and it will be messy later – like your accountant says. What if you sold one property, how much of the LOC is associated with each property?I would keep the LOC, but set up an offset account against one of the IP loans. If all IPs are owned by the same entity then it doesn't matter which. Have this as the main transaction account with all rents going in, wages going in, and then all expenses going out.
OK, so what do you then use the LOC for that you keep?
Also why is it messy if I am paying into it? None of it is private use, it is all investment property related-issue is that all the IPs are mixed up.Jamie M wrote:I have interest only loans on all properties – IP and PPOR.Have one offset account set up against PPOR.
Get rent paid into offset and expenses paid out of offset. It's essentially the account for all property related income/expenses.
Cheers
Jamie
My PPOR was paid off ages ago, so is there any point in having an offset to a new loan against PPOR? In a sense this is exactly what I have at the moment with the LOC, except it is loan and offset rolled into 1 account.
abcd1 wrote:Hi, we have had the pleasure of dealing with the national bank in regards to buying a property in Moranbah apparently there lending manager in the Sydney office has done some research and seems to think that, there will be thousands of houses to be built in a town that is land locked. We were apparently preapproved for a home there through them then they did a backflip because there lending manager researched within 24hours that it is now to high risk because of the thousands of houses being built don't know where they intend to put them. there awesome research did not show the landlocked or the fact the house we were purchasing is able to put on a second dwelling to increase the rental income and equity further. They also did not believe the rent would be 2k+ through a company had to tell them a dozen times lol they also are counting the rent at only $1000 a week because of the( Mining Tax) I know it's carbon tax lending manager called it mining tax, "what a good researcher". will mean less pay for the miners so they can't afford the rent and the lease can't be guaranteed for another 2 years NAB Sydney research properly before spouting figures and so called facts and one side of the story when you clearly have no idea what's going on in Moranbah thanks for listeningI have an IP in Moranbah using NAB and found that local NAB was a million times better that brokers or far-away NAB offices.
I'd suggest contacting Nick Palmer-Fields at Mackay NAB on 07 (4)9 444126 . He was excellent. Also NAB no longer has local people in Moranbah so they have 3 valuers that they use as below.
Herron Todd White ph 07 4957 7348
JD Dodds Ph 074957 2821 or
John Logan Ph 074951 0711.However I would check with Nick that this list is still valid as the banks sometimes change accepted valuers. If you want more information PM me and I can tell you more.
engelo10 wrote:Hey Mattdesigner, Keep educating yourself with property books, magazines, seminars, this forum and somersoft and im sure you will meet competent and trustworthy people along the way to help and guide you in your property investing. I have built a pretty good crew within 1 year of buying my 1st property. Just be cautious with who you choose. EngeloThis is v good advice.
I do not know how important the end goal is to be sure of early on. I have found that over the last 18 months since I got interested in property that the end goal still is not formed but is becoming slightly less hazy. Meanwhile I have bought several properties.
There are several schools of thought out there regarding the 'best'approach to property investing. Steve McKnight strongly advocates positive gearing or income based investing (ie high rents). I also read that book and his arguments made sense. However there are other views out there that are also v valid and you should widen the scope of your reading.
Eg Margaret Lomas; Michael Yardney.
Also worth subscribing (or just buying form the newsagent) either or both of Australian Property Investor or Your Investment Property magazine, which always have a range of real life scenarios/expert articles/Q&A etc etc.
This forum is a fabulous source of brilliant minds and many are professionals who just appear to love assisting people, such as Terryw above, (who seems to be having a rare off day). You can also search past questions/forum topics on here.
In the end you have a good deposit of $60. My suggestion is educate yourself some more then buy something with as best information as you can. There will be better deals out there, there will be worse deals, but if you never start you will never know. The team you speak of will form as you start, eg go to the mortgage broker, accountant, solicitor, etc.
Anyway that's my 2 bobs worth
Terryw wrote:It depends if you pay the full balance off every month. If you do then I think you could borrow from the LOC and pay off the credit card loan. You would be just refinancing debt. Should be ok as the money goes straight from one loan to the other.Thanks. That's what I figured. I'll leave you alone now. Appreciate your input again.
on a similar vein, supposing I go and rack up $500 worth of stuff at Bunnings to help renovate an IP (again no personal expenses) using my credit card, can I then pay off that portion of my monthly credit card bill using my dedicated investment LOC, and the remainder using my normal savings account and then claim the interest generated by using the LOC?
Terryw wrote:Unless you want to cross coll the properties (not good) you would need one LOC per property.LOCs generally have a higher rate than IO loans.
Ok thanks. Now supposing Bank A gives me a lower rate for its LOC than Bank B. Can I transfer the full amount of the LOC from Bank A into the bank B LOC in order to save on the bank B interest (both being used for future IP deposits) if I am not utilising the total of both? Or do I run into tax issues shunting money around like that?
interesting informative educational thread. Thanks all.
I have 3 IPs each with their own free-standing (not cross lateralised) interest only loans, and all of them have gone up in value. Is the simplest way to access the extra equity to set up individual LOCs for each IP? How do you stop it getting too bit confusing, once you get more and more IPs all doing the same thing?
Also Terryw re your method with an IO loan with redraw. Would that have a lower interest rate than a LOC? My current LOC rate is higher than the IO with the same bank.
