Forum Replies Created
Hi,
The levy will be going up to $460/qtr which includes the insurance premium of $1700/yr.
Yes it is only me and the neighbour in body corp but there si an external body copr manager. Their fee is about $300/yr and they do the budgets etc . I don’t mind paying them the $300/yr for the work but was thinking the property would be more sellable if it was not a body corp.
I appreciate your input
j
Thanks for replying.
It is in a suburb in Nth Brisbane.
Thanks,
j
Hi,
This calculator is pretty good as well. http://www.investmentpropertycalculator.com.au/free-investment-property-calculator.html
johk
After reading a few articles etc one loan structure would be:
Loan 1:
Interest only Secured by IP 310*0.8 = 248’
Loan 2:
Line of Credit for the additional 20% and purchasing cost and negative gearing secured by PPOR
Interest for loan 1 is debited to Loan 2
Rental income is paid to Loan 2If I understands it correctly with the above structure you can’t use the IP as a ‘tax benefit’ – not that that is the reason for us purchasing an IP.
Also, how do you calculate the required Line of Credit or would you use the whole PPOR for it (not preferable)?
Am I right assuming that with the above loan structure we wouldn’t be able to purchase the townhouse or the house as there wouldn’t be enough “value” left in the PPOR?I am sure I will have a few more questions as I go through this.
Thanks for your comments.
johk
Hi,
I have attached 2 spreadsheets for the House and the townhouse where i have tried to outline the cost etc
House http://www.bohemiadesign.com.au/bohemia_clients/House.xls
Townhouse http://www.bohemiadesign.com.au/bohemia_clients/townhouse.xlsWhat I can’t get my head around is comparing to an apartment – the total “out of the pocket” expenses per week are similar.
I guess this is what you have to decide – have a greater debt with a possible greater return or a smaller debt with a lesser return.Johk
Hi,
The Townhouse was sold for 595’ before the GFC but I think the house in Wooloowin might have more potential over 5-10 yrs. Similar house in Clayfield, which is the neighbouring Suburb, are around the 700’ mark. This particular house might be on the wrong side of Wooloowin ie closer Kedron and Lutwyche. Wouldn’t mind having a second opinion about it the location of the house within the suburb by someone who has more experience of north Brisbane. Also, I am not sure how the rental demand would be for a house like that in Wooloowin.The advantage of having a house though is that you don’t have to worry about Body Corp fees going up.
The townhouse is in a bigger estate with townhouses and houses. The demand is very high in the estate for rental properties and Body corp managers who handle some of the rentals make sure that when there are a changeover of tenants it happens over day ie you don’t miss a day of rental return.
johk
Hi,
The lower the better
But doesn't the bank generally req a LVR under 80% to avoid LMI which would be preferable.Thanks,
johkHi,
In my searching on the internet I found this http://r2bginvestments.com.au/archives/86 which states "
The vendor finance laws in each State are slightly different. However as of Jan 1st 2011 all Vendor Financiers must hold an Australian Credit Licence (ACL) in order to carry out this business."
Is this correct – in most places I it mentions you don't require an ACL?
Johk
Hi,Thanks for all the feedback and comments. It is very much appreciated especially when you try to start to get an idea of it all.
Jamie, thanks for the link to the excel sheet – might come handy one day.Been looking around and it is very hard to find any cash-flow positive properties. After I spent a night searching and reading I came across Vendor Finance.This seems very interesting. The sort of Vendor Finance that interest me at this stage is if I buy a property and then put it out for Rent-to-buy.
(I also read about “sandwich” deals where you literally only are the one passing the money. There seems to be a lot more money in making these “sandwich” deals but I reckon you need a bit more experience before you get into it.)Numbers:
Looking at this property for example http://www.realestate.com.au/property-house-qld-northgate-108172436
I have assumed I can pass on all the cost associated with taking out the mortgage to the prospect buyer.
As the buyer will pay for any costs associated with the property I don’t require a property manager (correct me if I am wrong)
Say I buy the property for 469’ and take a mortgage with the interest rate of 7%. The buyer and I enter a contract with him having the option to buy the property for 507’ in 2yrs (4% increase per year)My repayments (P&I) will be per fortnight: 1529
The buyers repayment are calculated with 8% interest rate: 1669
My profit after 2 years (1669-1529)*52 + (507’-469’) = 45280What lump sum payment can you ask of the buyer initially – is it whatever the buyer can afford or a percentage of mortgage?
Can you make the buyer pay for all the costs associated with taking up the mortgage – stamp duty etc?How or where do you find a buyer?
How much are people generally willing to pay per fortnight on rent-to-buy scheme?
Are there any premade (or templates of) contracts out ”there” that are available?Any comments would be much appreciated.
ThanksJohkHi, I am only trying to figure out how much it would cost me per month to hold a property. The numbers ie the IP value and then proposed rent are from a property on RE.com that was for sale.No we are not looking at buying a property now but merely trying to learn how to calculate the holding cost of the IP.I would appreciate any comments/feedback on how calculate the fortnightly holding cost of the IP Thanks,johk
Hi, Thanks for replying. I forgot about landlord insurance – thanks for mentioning it.
Does that mean if I would say increase the rent by 10% per year it will take 5yrs before the property is cash flow positive?
Assuming that the holding costs are the same – which obviously is not true.When you say “set-up a third split” do you mean have a separate mortgage for the IP and not “bundle” it up with the PPOR?
Cheers,
JohkHi,
Thanks for your replies and advices.
We didn't go into this with the mindset of buying an investment property.
We were actually looking for a new house with a bit of land and an extra room. We found this new estate being built a bit further out from where we live and put our name down for one lot. As the town house we live in is in a good suburb here in Brisbane – next to Ascot and Clayfield – we believe that it has more potential to increase in value than the new house. That is how we got started on maybe trying to take the equity of the town house and put it in as a deposit for the house – as we would like to keep it.
But after reading your advices I realise I was a bit off track.
Back to the drawing board – if we want the new house it seems we have to sell this house. Hmm need to do some thinking.Thanks you,
Jonas
