Forum Replies Created
- dolmanbateman wrote:Check out the negative gearing calculator here, it should help you answer this question:
http://www.dolmanbateman.com.au/online-tools/negative-gearing-calculator/
That is a good calculator. Good work!
DWolfe wrote:Yeah Shoalhaven still has a bit of cheap property getting around. What do you guys think about Tamworth?D
Hi DWolfe, I know your comment was a while ago. Tamworth is an excellent place with developments happening in all directions. Current population now 50000. New subdivisions around town x4 (at least) bringing an estimated 15000 people here over the next few years. Drivers are things like BAE flight training school (trains RAAF pilots to fly then military takes over); several chook and meat processing plants, big regional hospital, recently completed equine centre (also driving up prices of any small farms around town capable of holding horses). More to say on this. Are you looking here?
Yes I saw that too. It was a link on the same youtube page as Uncle Knackers little gem.
Young n, don't give up!! I'm not sure how young n you are but young is good to be starting/thinking about all this. A lot of people on this forum, me included, wish we knew then what we know now.
You have a great deposit-no question the envy of many. Investing in prooperty great plan. But your servicability (ability to pay back the loan/factor in interest rises etc) sounds borderline.
Can I suggest, keep finding out more on the forum, ask away whatever you like and read read read.
My other suggestion is AIM LOW AND GO SLOW!! Why aim for $1 million in property from the outset and potentially bugger it up and lose all your $300000 plus more? Why not borrow $150000 to add to your deposit and get something affordable and serviceable to start with then as time goes on and your job is more stable and income more predictable then go in again. Or do just your idea of buying something outright with your $300K and then wait awhile as rent comes in and forms part of your regular income.
Don't give up-you're defintiely on the right track in your thinking.
very good. I liked it. Except I have no fence posts to try it out on. Maybe I could put some in, wait a week till the cement goes hard then try pulling it back out again.
bagpiper wrote:What is the first step in buying a house?This is a very broad kind of question. I would suggest look at the end point. Is it for you to live in? Is it an investment? If IP, then are you looking at buy and hold, buy and renovate, negative gear, subdivide, regional, city, units, commercial, residential etc etc etc.
May I suggest
1. educate yourself with eg Steve Mcknight's book (From 0 to 130 preoperties in 3.5 years) and perhaps a subscription to a magaxzine such as Your INvestment Property or Australian Property Investor (Both similar and $9.95 at most newsagencies)
2. continue reading/asking on this forum;
3. try and clarify your own goals with this-(eg to have paid off property that you can live off the rent as the ultimate goal) or perhaps, to eventually own your own home.Thoughts
Office blocks sometimes sit empty for long periods, which is why commercial property is regarded as riskier by banks.
With what you have said you could be very vulnerable if you borrow that much and it does have a vacant period in the context of your casual employment only.
woops, missed the bit about keeping both!
I all gets complicated if and when you move to the 700K IP because if it ends up being the one with the big loan then it suddenly stops being tax deductible and if the current PPOR is paid off then you get all this rental income without any interest to deduct against it.
I suppose you are also aware of the CGT implications on your current PPOR if you move and start calling somewhere else your PPOR?
I think I would advise seeing expert with specifics.
dreamteam wrote:What can I do to improve my cashflow, AND keep my properties?
Own – PPoR (2 bed flat in cap city) worth 550K, owe 200K on it, would rent for $450 if I didn't live in it.
Own – IP (3 bed house in regional city) worth 700K, owe 400K, rents for $400/wAre both loans P&I or is either loan interest only? My suggestion would be refinance the 700K IP with an 80% interest only loan ($560K). Use the "spare" $160K you have created to whack a large chunk off your current PPOR loan and only owe $40K on it. Then more interest becomes tax deductible as it is against your IP. (though have to double check this with accountant). If the IP loan is interest-only then your monthly repayments will drop a lot (because you are not paying back principle , just the interest component). Meanwhile hook into your remaining $40K till you fully own your PPOR and buy time to think in the meantime.
If you meanwhile find a job and move to the IP, then sell the unit, use the proceeds to pay off loan.
Whole aim is to get rid of non-taxdeductible debt and only have tax deductible debt. In your situation maybe even no debt.
tongue in cheek, ladies. Tongue in cheek!
We have used conveyancing works for a simple purchase recently this year. No complaints.
And we got 2 quotes from them and another firm, relayed the quotes to theother and got 20% off or thereabouts in the end.
Salina wrote:Ladies, how many times have you been to an open home just to be totally ignored by the Real Estate Agent !I'm an avid investor (I have four IP's) – but it seems that if you are a lone female, then agents don't take you seriously. If I bring my Dad along, the Agents just talk directly to my Dad and completely ignore me!….ggggrrrrrrrr
I have a Y chromosome, and I have sometimes found the exact opposite.
I get ignored while my wife is fussed over and shown the beautiful benches and the lovely shower or bath or the wall oven or bla bla bla which I think springs from the view held by some RE Agents that if they can get the girl to fall in love with the property then she'll convince/nag/hound her hubby to come around to her viewpoint and buy it for her (and do the Agents work for them far better than they could). Which is just another probably sometimes effective sales method I suppose.
Anyway , on those occasions I can have a proper look at all the rotting timbers and crumbling gyprock and rusted out gutters in peace. Then pour cold water all over wifey's temporary little dream.
Yeah, do that. And point out the bodies as well. That'd drop it a bit more.
Terryw wrote:Putting money into a LOC will save you interest but will cost you in tax.Everytime you place money into the account it is a repayment of a loan. Everytime you withdraw money out it is new borrowings.
So if you put $100 in the LOC for one day and then take it out tomorrow to buy food the investment loan has decreased by $100 and the personal loan has increased by $100.
Imagine doing this every week for a number of years. You could have a $100,000 loan with none of the interest being deductible.
Whereas if you had used an offset account this could have been totally avoided – while saving you the same or more interest.
Except I never withdraw from that account for food, only investment related expenses. My separate account is for food.
I do understand what you are saying and agree, but I think we are not completely on the same page. I would have to tell you more personal specifics which is not really neccessary in this forum. I do appreciate your input though.
Linar wrote:In some states you can't buy with vacant possession. You have to take over the leases until the leases expire. I don't know what the situation is in Tasmania.
How desirable is the area for rental? Would it be easy to get tenants at $200 pw? If hiking up the rent by so much means that potentially you will have trouble getting tenants, it may be worthwhile upping the rent to $180pw and try to keep the current tenants in.
Tenants are your best asset. Look after them.
Cheers
K
Only one tenant has a lease. To be honest your whole summary was my assessment of the best idea, too. Put rent up to a bit less than market rental but a lot more than current. 3x$30/wkx52weeks=$4500 approx. I have to do it or it is not worth buying.
Vacancy rate is <2%. Area v desirable (near hospital, Tafe businesses etc etc)
I agree about looking after tenants, just want good money since I am not doing it for charity.
australia-that big island of the north coast of tasmania
Scott No Mates wrote:Risk v Reward. Buy the property vacant possession. If the existing tenants want a new lease, market rent (taking into account the condition of the property).There is no limit as to how much a rent increase can be however it must be supported by market rent. It will take 60 days or longer for the new rent to be effective, provided that there is no objection to the increase.
Yes I thought of that. I just have a bit of moral difficulty with the concept of turfing people out of what has been their home for a few years. But I suppose I should harden up a bit and get less emotional. I just hate stuff I own underperforming. Then it feels like I'm subsidising someone I don't even know nor personally care about (the tenant I've never met.)
Oh yes, I see. I don't really have any non-deductible debt. I just use the other (private LOC) as an overdraft facility if and when I need it (eg buy a new car
>rapidly repay—->back to close to zero again)cmason wrote:House Call wrote:good thing there is not all that much "spare money"! lol (lots of kids and cars and o/s holidays takes care of that)Think Terry was refering to the rent should be going into your offset and not into the LOC
Now that bit I do not understand. I thought rent going into the LOC was a good thing because my interest bill goes down as balance falls (effectively "parking" money there).
Can you explain an offset account, then? I thought it is a positive bank balance account where the interest earned goes against your loan interest, but that the interest you earn on it is same as any other normal account (ie low interest rate) and therefore the benefits are lower than plonking the money straight into the LOC which will then save you the same interest rate as the LOC (ie save you more) than the offset.
Catalyst wrote:If they are on expired leases you can put the rent up any amount you want. They MAY take you to tribunal but if it within market rent you shouldn't need to worry.I thought there was a limit to how much you could increase rent in one go.
Thanks for your comment though, all that does make good sense.
