[imugliMember@imugliJoin Date: 2005Post Count: 87]

August 11, 2008 - 12:18 am

I think this one should be in the creative investing section – the VERY creative investing section

[imugliMember@imugliJoin Date: 2005Post Count: 87]

August 8, 2008 - 6:06 am

Think of a line of credit as a great big credit card i.e THE BANK'S money – you have a limit, secured against your property, and you need to pay x% of the outstanding debt each month.

An offset account is YOUR money in a savings account.

Say you have a mortgage of $100,000 and a balance of $10,000 in your offset account. You only pay interest on $90000 of your mortgage balance.

[imugliMember@imugliJoin Date: 2005Post Count: 87]

August 8, 2008 - 3:03 am

ummester,

Established suburbs where the average LVR is a bit more reasonable seem to be holding up well enough to cover at least the amounts owing. So the lender may in fact have lost equity, but at least they're not coming out still owing money. Some suburbs have basically been written off the financing map, but I'm talking mortgage belt, lower income, high average LVR suburbs here.

That's probably nothing new to anyone here though…

You wanna try selling a 3 year old Ford Falcon or Holden Commodore though…

[imugliMember@imugliJoin Date: 2005Post Count: 87]

August 8, 2008 - 1:36 am

I could be wrong here, but AFAIK the only way you can claim the interest the trust is paying (kind of) is if you borrow money to purchase units in a unit trust. The trust would then use the capital you have given it to purchase the property. Because the money you borrowed is for investment purposes (you've invested in the trust) you can then claim the interest on the borrowings.

This is of course dependent on your ability to get finance of the magnitude you are talking and would affect your ability to service the second loan you speak of.

Bear in mind any interest the trust pays is tax deductible within the trust, but (again AFAIK) any losses have to stay within it but can be claimed against future profits.

[imugliMember@imugliJoin Date: 2005Post Count: 87]

August 7, 2008 - 11:20 pm

Terryw wrote:

yarpos wrote:

Terryw wrote:

Some people need protecting from themselves. I had a friend who was bored with her rental property and having to cover the shortfall each month so she just stopped paying the loan. She just thought the bank would take it and sell it for her!!

   creative thinker….how did that work out for her?

I talked her out of doing it that way by saying they would sell the property too cheap and come after her for any shortfall, plus it would ruin her credit rating. She listed it with an agent and it was sold quickly. Happy!

The idea that the finance company would sell the house too cheap is not always the case. Where it's at all possible, the compnay I work for won't sell the property for less than market value. In many cases there's actually a surplus left over and this goes straight to the customer. Obviously there are many factors involved here though…

The lender has greater control if they list it themselves but a lot of the time they feel pressured to sell quickly, so actually accept less than we would have got had we listed it for them after either a voluntary surrender or after repo'ing it.

I'm not suggesting for a second that it's a rose coloured world if the finance company sells your house, just not necessarily the end of it…

Of course, we all know that the first thing your friend should have done was contact her finance provider.

[imugliMember@imugliJoin Date: 2005Post Count: 87]

August 7, 2008 - 6:51 am

newbi2 wrote:

Im sorry, but I am am firm believer in teaching one to look after ones own a%$e. The type of finance product doesnt matter, at the end of the day it is the banks job to make money, it is the consumers to look out for their finances. There is always fine print in life and the sooner we teach kids to start reading it the better. Then when as adults these options come up then they will have at least practised reading documents before signing.

Sorry for the rant…….I just get sick of compensating for incompetants. I am not refering to those who genuinally need assistance, just those who are too lazy to get off their own butts and then when it hits the fan, it becomes everyone else fault and someone elses problem.

my 2cw
mick

Well said.

[imugliMember@imugliJoin Date: 2005Post Count: 87]

August 7, 2008 - 3:28 am

I honestly think the most important aspect here is consumer education i.e the consumer needs to be educated to budget for 3 or 4% extra percent on top of their minimum payment. The consumer needs to be educated that the reason the banks are so happy to capitalise your mortgage insurance and your establishment fees etc (so that a 95% LVR becomes 97.5%) is because they know you'll end up paying more than the actual number they put in front of you. The consumer needs to be educated that yes, you do still need to fork out legals and SD and that this will generally set you back ~12%.

Once the consumer is educated properly, they'll then have the knowledge to make the informed decision for themselves.

Then again, most of us here are eductated through no one else's actions but our own, so should anyone really be responsible for education the consumer? We do live in a free economy…

[imugliMember@imugliJoin Date: 2005Post Count: 87]

August 6, 2008 - 11:10 pm

Thanks Guys,

Yeah, went the conservative route. Our goal is passive income as opposed to outright capital growth so country towns serve that purpose fairly well. The idea from here will probably be to pay it off then use it as collateral towards a second one worth a little more and so on…

Baby steps for now…

[imugliMember@imugliJoin Date: 2005Post Count: 87]

July 15, 2008 - 10:17 pm

Thanks Guys,

I appreciate the advice. Looks like most are generally in favour of having the property managed.

I'm a debt collector, so have problem at all asking for money but the legislation point is a good one as is the time factor.

Thanks again!

[imugliMember@imugliJoin Date: 2005Post Count: 87]

July 12, 2008 - 11:32 pm

Grew up there actually…

It's predominantly an old commission area.

The area north of southern rd, between the creek and waterdale road was the olympic village for the 56 games. Unfortunately now, it's a loooooong way from it's former glory…

If I were you I'd be sticking to the area bound by bell street, southern rd / murray rd, oriel rd and Liberty Parade.

Check out the other side of Bell Street, in what is now Ivanhoe, to see whats being done there. It may take a few years, but I wouldn't be surprised if it happens in W. Heidelberg, starting with that pocket. There is a fairly high sudanese refugee population in the area as of late though…

They're talking about changing Bellfield to Ivanhoe, so that will bump prices up there and force people the other side of bell street. If you can afford bellfield I'd be looking there… Not quite as dodgy as w. Heidelberg and with better potential IMO. Close to the hospital you may be able to rent it to a couple of nurses or something… Check out the areas bound by Banksia street, waterdale road, bell street and Liberty Parade.

Good luck!

[imugliMember@imugliJoin Date: 2005Post Count: 87]

July 12, 2008 - 5:37 am

Thanks Richard,

Appreciate that.

Life / TPD / Income protection insurances are definitely on the cards already, so that wouldn't have complicated things too much 

As for the discounts, will definitely shop around for a decent broker – thanks for the tip.

Thanks again.

[imugliMember@imugliJoin Date: 2005Post Count: 87]

February 18, 2008 - 2:19 am

Scott No Mates wrote:

imugli wrote:

This may sound completely out there, but have you considered leaseholding the land? Someone who may want to build but doesn't have the cash for the land up front may purchase a leasehold on the property and develop it. The leasehold could be over say 10 or 20 years.

Then make part of your contract that if they wish to sell, you get first right of offer on the buildings.

I'll probably get shot down for the idea but hey, it's completely out of the box and it may just turn things around for you…

Good luck!

Leasehold works for commercial property and is sparingly used as very few tenants want to build their own building, pay for the improvements and be lumbered with the cost of removal at the end (or sale to the owner). It is more common to develop the site with a pre-lease commitment from the tenant (I would not think that this can be done under the NSW residential tenancies act). Leasehold also works for retail where the tenant pays for their fitout but only leases the space occupied (not the entire shopping centre).

FWIW the lease term for commercial leasehold is usually 40yrs + and is viewed by the LTO as a subdivision or sale of the land. Council may not allow further subdivision of the land so it may not be permitted. The tenant usually leases only a portion of the site eg 3000 m2 of a 5 ha site with similar leases to other parties so that the entire site is effectively subdivided (refer to sites such as Bankstown Airport Industrial Estate, lands within National Parks eg Perisher Blue Resort/Thredbo).

Good thinking but not quite practical for a house.

Thanks for the clarification Scott No Mates. I was aware that it's more a commercial RE tool used over logner periods and that there would be limited if any demand in the residential market. Just thought I'd throw it out there as a desperate time / desperate measure last throw of the dice thing

Thanks again

[imugliMember@imugliJoin Date: 2005Post Count: 87]

February 17, 2008 - 5:27 am

This may sound completely out there, but have you considered leaseholding the land? Someone who may want to build but doesn't have the cash for the land up front may purchase a leasehold on the property and develop it. The leasehold could be over say 10 or 20 years.

Then make part of your contract that if they wish to sell, you get first right of offer on the buildings.

I'll probably get shot down for the idea but hey, it's completely out of the box and it may just turn things around for you…

Good luck!

[imugliMember@imugliJoin Date: 2005Post Count: 87]

February 17, 2008 - 2:50 am

Is your wife not working a short term thing? Can you cut back on your lifestyle somewhere? If so…

How about trying the hard and fast rules first…

Contact your institution. Can you refinance? Can you reduce or put a stop to payments for a couple of months until your wife is back in work? Most institutions will be able to do something if you're having problems and you tell them fairly soon after they begin. The quicker you do it the more room you'll have.

Can you get a cheaper rate somewhere else?

Are both your mortgages with the one lender? If not, shop around for what banks / financiers will do for you if you bring both of the loans. May get you nowhere, may get you somewhere…

It doesn't sound like this is going to be a long term situation – I'd investigate all options before selling the IP… Remember, the last thing a bank wants is their customers out on the street – everybody loses…

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February 16, 2008 - 1:10 am

I suppose for me it depends on your desired outcome is? Is it to get as much capital growth as possible while copping a cash loss each year, or is your priority the cashflow from a CF+ property…

For mine, I'm about to start down the lower risk, CF+ route…

[imugliMember@imugliJoin Date: 2005Post Count: 87]

February 15, 2008 - 10:59 am

AFAIK You can only claim interest deductions if it's for investment purposes, HOWEVER (and I stand to be corrected) you could possibly LEASE the vehicle in the company name and claim THAT as an expense, though I'm sure there'd have to be some clause stating that you had to prove it's for business purposes…

Anyone with a bit more knowledge???

Perhaps best to talk it over with your accountant…

[imugliMember@imugliJoin Date: 2005Post Count: 87]

February 14, 2008 - 11:57 pm

When you say "My Property" are you talking about your PPoR that you have the equity in already, or a prospective purchase?

If you're talking aboput a prospective purchase, I believe institutions use a number of factors in determining the Max LVR – including location (by Post Code) and size of property. I.e they'd be less likely to lend 80% on a small unit in a crappy suburb than a larger unit in a good suburb, simply because their risk is lower…

Of course, I stand to be corrected…

EDIT: I just read the bit that says you already have the equity… sorry.

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February 13, 2008 - 10:49 pm

I'm personally looking at getting in to the market, albeit using high deposits in rural areas to make my properties CF+ – it's a low growth option but low risk as well…

[imugliMember@imugliJoin Date: 2005Post Count: 87]

February 12, 2008 - 10:04 pm

Thanks Terry.

Good to know I'm on the right track in all this