I think (not 100% certain – you'd need to check) that the CGT clock starts ticking at the date of contract, not settlement. 

Why don't you have the address? It should be on the title.  Have they since moved house?

Get your mortgage broker to search sales history of the property on http://www.rpdata.com .  At the very least, it should show you the real estate agency that sold the property.  Worst come to worst, you could approach the agency and ask them to go through their records, and contact the owner on your behalf.  Privacy laws will not permit them to give you the owner's details, of course…

Capital Growth – both historical and forecasted
Vacancy Rates
Rental Yield
Condition of property
Scarcity factor (is there something special about the dwelling eg nice architectural features, near the beach etc)
Proximity to transport, shopping centres, schools, employment
Forthcoming infrastructure (eg new road/rail line…)
Potential to add value to the property (ideas include create an extra bedroom, extend the dwelling, renovate, subdivide the land, build an additional dwelling, get a rezoning)
Be careful about buying into a suburb that relies on only one employer or industry – if the employer/industry moves out, the town might die

Well a subdivision isn't just a bit of paper that says this block is now two.  There might also be things that for eg, the electricity company and the phone company require you to do.  In some cases, the electricity company might demand you pay for a new pit to be installed. 

You'll have to do things like ensure there is a driveway crossover (ie the concrete driveway entrance on what would otherwise be the naturestrip) for the new block.  The driveway to the new block will have to be of minimum width, so if you are doing a battleaxe subdivision (ie where the new block essentially is the backyard and a very long driveway), it'll have to be MINIMUM 3metres with no roofing etc of the existing house hanging over the 3m area.    You'll have to put fences up to divide the properties.  You'll have to ensure there is electricity to the driveway crossover (I believe).  You might have to deal with stormwater requirements or whatever else council thinks up. 

Surveyors usually handle subdivisions for you and could give you an idea of timelines, likely costs, and the likely "requirements" you'll have to comply with in your area.  Give a couple of them a call and have a chat.

I see some sentences there that suggest it might not be smart for you to go guarantor on a property for him:

"he could have a go at being the responsible home owner… "
"he was only recently out of bankruptcy"
"Our income hasn't been overly stable since we have been together and finances seem to be part of our breakup problem"

If you are thinking about separating, why would you wrap yourself up in a lifetime of more money problems "together" ?

I have found that an alternative way of finding out the reason for the sale is by asking the agent if the vendor "has found elsewhere nice for themselves to live as yet", or simply ask "where the vendor is moving to" with a stupid grin on your face like the whole adventure must be terribly exciting and how wonderful that you are involved in it all.  This kind of forces the agent to say "yes they have already bought another PPOR" which tells you they need to sell this one.  Or they might say that the house is being offloaded in a divorce, or that someone elderly owns it and has indeed found a place in a nursing home and the sale is funding the move etc etc.  A great response is when they say that the vendors have decided to move interstate.  This is not a move that happens quickly, and in my opinion creates a wonderful opportunity to make an offer that involves a long settlement period, during which the vendor knows they've sold their house and can plan their next move with confidence, but at the same time, you don't have to cough up the cash for ages

Hi Terry,

I wonder how long it will take for the rules to change and we'll be able to access equity in smsf owned property.  Your thoughts?  Also I'm unclear on whether the equity cannot be accessed while there remains a debt on the property, or whether the equity cannot be accessed at all.

jac

I was looking at Quest apartments with great excitement about 4 years go.  This was before I started educating myself properly on property investing.  Amusingly the same apartments are now on the market for EVEN LESS than what they were selling for 4 years ago. Hmmm.

In theory you could do it.  It depends on the lender and the LVR (loan to value ratio).  For instance: if you were to refinance your entire portfolio with a lender that is offering an LVR of 80% it would look like this:

Proposed PPOR : $650k
IP #1 : $400k
IP #2 : $400k

Total value of properties = $1,450,000

Lender would be prepared to loan 80% of this which is 0.8 * $1,450,000 = $1,160,000.  You would be expected to come up with the remaining $290k.

So let's see then:

You have $190k of equity in IP #1 (ie $400k-$210k).
You have $53k of equity in IP # 2 (ie $400k – $347k).
And you have $20k saved up.

So in effect, the amount of money that you have to pitch into the entire portfolio is :
$190k + $53k + $20k = $263k.  So you've not quite got your $290k which means you couldn't go with a lender that offers 80% LVR.  You'd need a higher lend (eg 90%).  Also you mustn't forget that there will be buying costs associated with buying the $650k house…. ie stamp duty, solicitor fees etc.  And that will require further money.  I figure you'd make it through with an 85% LVR.  All this said, you'd then want it structured in a manner that all the debt was on the IPs where the mortgage interest is a deductible expense at tax time.  So you'd want your entire $290k to be on the $650k house, and the IPs to have 100% debt.

With a bit of luck one of the finance chaps will post on here as well and give you a better answer.

sonyasal,

Are you saying that your insurer is refusing to pay only lost rent (since the tenant was on a week to week lease)? Or are you saying that since the tenant was not on a fixed lease, they are also refusing to pay out on damage to the property?  My understanding is that damages would be paid out, but not lost rent.  It is considered that the retained bond money would cover the lost rent.  ps who is your insurer?