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Courtesy of Your Property Investor Forum:
Property valuation in flood-ravaged areas to be permanently lowered: Fitch
17/01/2011While the full extent of the damage is yet to be quantified, Fitch Ratings said the flood currently affecting South East Queensland is expected to have a negative impact on mortgage borrowers.The ratings agency noted that the property damage may temporarily or permanently affect borrowers' ability to pay, and may result in lower than normal recovery rates for damaged properties, mortgage borrowers in the South East corner of Queensland may experience an affordability shock due to an increase in expenses and loss of income; and transactions might bear a certain degree of income shortfall and an increase in losses as lender's mortgage insurance does not cover flood risk."Borrowers who have been directly or indirectly affected by the flooding will likely experience some financial distress in terms of property damage, increased living expenses, and potential loss of income," said James Zanesi, Associate Director in Fitch's Structured Finance team. "Queensland's floods might also temporarily reduce available income in selected mortgage-backed transactions depending on their exposure to the affected areas."In the event of a borrower defaulting due to property damage, Zanesi said that recoveries might be revised downwards from Fitch's assumptions at the time of initial analysis.“Not all properties have specific flood insurance in place, and lender's mortgage insurance does not cover for flood damage. Moreover, the market value for properties located in the flooded areas might now be permanently adjusted downwards due to future flooding risk,” he said.An estimated 35,000 to 40,000 properties are believed to be affected by the flood. Fitch said flood-related losses may take at least six months before being realised.will flood ravage properties(over 70 suburbs affected in brisbane alone) be permanently down graded in value??
cyclones?
Has gladstone got flood history. also what is gladstone's cyclone history?
Best area in australia – East Freo(WA)
LIlian fisher at chan & naylor hay st east perth
DW you're on the money about the"keeps the construction industry going too". I think you'll find when the economy is humming along so is the "home building industry." If the RBA is going to keep rates climbing then obviously the amount of people borrowing will diminish ie less houses being contructed.
people spruiking caroline springs and west melton as "good" investments for rentals as well
thoughts?
Qlds007 wrote:Buying 3-4 properties worth 100K is financial suicide even if they are positive cash flow today.Firstly at those prices financing them would be difficult and remember even property you buy irrespective of the yield will reduce your borrowing capacity.
Keep some of your funds back for contingency or maintainance, vacancy etc and divide the rest up and maybe look at 1 property initially to ensure you are confortable with the risk. Then after 3 -6 months if all is going weel look to add another property to your portfolio and grow slowly.
Last thing you want to do is blow the lot because the property looked cheap only to fund you have bought a complete lemon.
Just because the property is cheap doesnt mean it is a good buy.grasshoper listen to wisdom
MichaelGG wrote:Dan,Thanks a lot for clarifying your previous reply. I found it really helped me.
Ryan,
Love to read your posts. learnt many things from your other threads. Thanks
BTW, I think i will set up an appropriate structure before the 1st IP.Number 8,
I think the property investment trust (PIT) can distribute losses.I am still struggling to find a good accountant in Perth. Any suggestion?
Thanks,
MichaelGGLilian Fisher (Chan & naylor)
Terryw wrote:ChizUnits and hybrids technically also quarantine losses. ie losses from a trust cannot be used to offset personal income (A trust is a different entity for tax). But a way around this is where an individual borrows money to buy the units in the trust and the individual claims the interest on this loan.
CHIZ
i have purchased a couple of properties using our PIT with corporate trustee – loans in my name hence i claim the interest as terry outline above. The PIT which is registered in SA has no vesting end date like many other trusts. also it has bloodline benifits.Qlds007 wrote:I would have an interest only loan even if the loan was for owner occupation.Why? I thought conventional wisdom suggests one tries to "own" their PPOR.
Qlds007 wrote:Hi IZYes to both but of course you wouldn't have one where you still have some non deductible debt.
So if you have a PPOR with an P&I loan but have to rent it out because you have moved to a regional centre due to a promotion and you are sure you won't be living back in this house BUT won't be selling it so……..
you convert the loan to IO with a 100% off set account. you have a small credit card debit as the only non deductible debt.
I'm asking for my son who is in this situation.
another thing to consider is your appetite for risk. If you can't sleep at nite worrying about the debt you have on your IP(s)
then forget it.deb2010 wrote:Tempted as I am to answer that with a facetious reply, I shall keep to the intended purpose of the forum.In your professioanl capacity, when would be the time to contact a Broker? I have a P&I loan over my PPOR with one of the 4 big banks and assumed that I would approach them first for an invesment loan. (Pre approval had been given 18mths ago). I understand the need to shop around, but apart from securing a 'better' loan package, is there any advantage in contacting a broker at this early stage of investing?
Deb once you have gained sufficient knowledge from these forums and readings ie steve , margaret lomas, michael yardney to name afew . you develop an investment strategy and the type of purchasing structure ie Family trust, Unit trust etc
you then need to get hold of a good invest ment savvy broker (preferably one who has IPs as well)who has an intimate knowledge how to finance not only your first IP but your 2nd, 3rd etc – he/she will make sure you spread the "love" around and not get too much exposure to one lender. it will sure help in growing your portfolio.
If your in QLD can't go past Richard, NSW – Terryw
All the best on your journey.
has aplan for you to
kkatlea wrote:Does anyone a good broker they could recommend in Perth?Yes please!! very frustrated in trying to grow portfolio.
Two interesting articles in "your investment property" June 2009 on this topic.
one article from Bill Zheng founder of Investors Direct why punters should reconsider Cross- Collateralisation.second article was from an investor (Rob williams) who had hit the "servicibility wall" and need to do it to get a deal done.
Terryw wrote:1. Tax benefits depend on the use of the property and not the security.
2. Yes. You could make some improvements and save more tax.
3. You would need a few different ones. IO for the investment, IO/PI for the main residence with a 100% offset account attached. An interest free credit card with points and a LOC for spare equity on the main residence.Intrest free credit card yes please !!
shahabr wrote:also if you are looking for good yield worth looking at lakemba, you can still get units for around the 250k mark with a pretty good return. i read somewhere that the liverpool area is forecasted to grow by somthing like 90% in the next 15 years…could have been from the council websiteI went to the Liverpool City Council site and yes the area will grow by 90K but we are talking the shire which covers 32 suburbs and 300 sq klimetres. don't confuse this with the suburb of liverpool!!
Terryw wrote:What the broker is suggesting is cross collateralisation.I am located in Sydney, but don't take on new clients anymore. I can refer you to someone if you send me your email.
Can you refer me to a broker in perth terry it would be greatly appreciated.
Try metropole
