Forum Replies Created
Could you get a guarantor who is willing to back you? Then they, at least, have the wage.
Kelly
Can you look at moving a house to the block. You can get them made by companies and the moved and connected to mains etc on site.
Sometimes people get rid of houses from blocks and you can pick an old one up cheap and have it moved and then just renovate it.
These could possibly be cheaper options, but you would need to check with the council to see if it is allowed.
Kelly.
Is it too late to get your friend to carry back a second mortgage on the property. That way you can get a loan for a reduced amount through the bank and you can pay your friend back in a certain specified time.
Or could you partner with someone to use their money for a specified period (get another individual to be "the bank"for $20 000 of the purchase price).
Obviously with these two options you would be paying the person interest that would usually be higher than what you would pay to a bank, but at least you could meet the bank.
Kelly
Is that $185,000-195,000 EACH or Separately???
If you are buyng both units for that price and getting $300 a week rent it probably won't be positively geared, but it won't be too far off.
Does the area have good capital growth?
Do you want to negatively gear? That is, do you want to have to pay extra out of your pocket towards these loans in order to py for them, or did you want them to pay for themselves?
Do you have a large income or a large tax issue? If you do, you can offset your negatively geared losses against your tax.
Are the houses new or newish? (Built since 1987) Are they eligble for depreciation benefits that can be claimed against your tax?The answers to some of those questions may help your decision as to whether these properties are right for your situation.
Kelly
Does it make a difference if your deposit is non-refundable?
I guess it would if you don't get the house at settlement because the vendor has done a runner…
Kelly
Only pay $12 per $1000 of debt!!!!
That is only 1.2% of your debt… wouldn't that be stretching things to pay off the interest?
I guess it would depend whether you are paying off $12 a week, month, year, etc…
Sounds a bit of a dangerous concept to me.
Kelly
Get a quantity surveyor to work out the depreciation schedule so that you know how much your $100 possible outlay will be reduced by. Then work out how long it will take you to positively gear it, if that is at all possible…
Is servicing the two loans now too much of a stretch for you?
Its a hard decision. I would be inclined to rent and buy another IP, myself.
Kelly
Can someone explain to me why the strength of the dollar impacts on inflation…
I'm not very strong on finance either!!
Kelly
I have recently heard good things about Broken Hill, but the problem with mining towns is what happens when the work runs out. Maybe check out the history of the town. What sustained it before the mining boom? (Or has it always been a mining town?) What have the ups and downs been like… VERY up and VERY down or just a bit of both? Has it enough infrastructure to sustain it now? It has been around a long time, so maybe it won't up and disappear as soon as other towns might.
Kelly
Maybe this is what everyone else said, but I can't figure out where you can go to see the forums that have been recently replied to. It just seems to organise them according to when they were created. I liked this feature because popular topics would keep bouncing back up on your screen.
Kelly
I vote to change it.
It is hard to do extension work etc… on a house like that (only applicable if thats what you were considering doing).
Even if you weren't going to do work on it, it increases the value (at least, that is what my mum was told when she got advice about her asbestos roof). I'm not sure if it would increase the value by how much you have to outlay…
But I guess it also depends on your cashflow and other plans for this property…. will it have an effect on tenants, rent, etc….
Kelly
Hi,
In the last house I rented, we thought we had possum problems i the roof, so the landlord paid to get someone out to check and deal with it. It turned out it was mice/rats, and the possum guy just put out ratsack and the problem was fixed.
With other pest issues, I have heard it can be put in to the contract that a landlord will do a pest inspection periodically (once a year say) but if the pests are related to the tenants pets, eg fleas, then the tenant pays.
I don’t know what category scorpions fit into!!!! It does seem as though they would hamper the tenants lifestyle… If you don’t deal with it and some gets stung… are you liable? I guess if the tenants are good tenants, just deal with it.
Kelly
Thanks Terry. That is helpful.
I guess then, if you enter a period of down-turn or higher interest rates, where it might be more important to reduce your debt levels, then you could always sell and repay some debt, or add in an extra bit to repay some principal.
Kelly
I don’t know much about commercial property, but I do know that the price of it is usually related to how much rental you can recieve (ie, generally the higher the rental, the higher the price of the property).
I would look at the gross rental return and see what ballpark figure you want to pay.
Rent per annum X 100 = Gross rental return as a %
Purchase PriceDepending on whether you want income (which I presume you will) or CGain, you can see what sort of purchase price would help you get the return you need to get in order to cover your costs and make it worthwhile for you.
This can then give you the confidence to put in an offer, especially if it is below the asking price.
I hope this helps.
Kelly
Glad you are getting out there and doing all the dirty work! Good luck!
My dad lives in Collinsville and has also lived in the Bowen area. He is a builder and has said that the towns up there have really taken off in the last 6 months.
One thing to be aware of is that there seem to be few tradesmen in the area, as he is getting calls all the time from people wanting him to do maintenance work on their houses.
Hope you come home with a few more assets than you went with!
Kelly
Thanks guys.
If you were investing in something that expected no capital gains (ie a carpark or storage space for positive cashflow), would you still go with IO or would you want to reduce the debt?
I think the IO loan with the option of paying extra for the principle is a good option.
Thank you.
Being rich for me is:
how many days/months can I go without working before everything collapses.
I guess, because of this definition of wealth, having income from assets is my priority. It is a bit of a different way of looking at “time-as-richness”.
Kelly
Hi,
I have been hearing conflicting reports about Brisbane and QLD. Some seem to say it is on the move up and other seem to say it is on the move down….
I don’t live in Brisbane so I do not have the local knowledge to make an informed decision. Maybe the mining boom in some of the regional towns in QLD are having an effect of the numbers. My dad lives in a regional town near Townsville and in the past year prices have gone up about 150% due to demand for housing for miners. Maybe these sort of numbers cloud the issue.
Maybe there is a slump in some areas of the QLD market (for instance in some areas of Brisbane) but not in others.
Kelly
Hi Joel,
Just be aware, that First Home Buyers are not stamp duty exempt in Victoria, as Contrarion suggested.
Good luck! It is an exciting time!
Kelly
Hi Audrienne,
I heard about bamboo floorboards just the other day. Apparently they are cheaper, a renewable resource, and very hard (so less scratches and scuffs etc…)
I wonder if bamboo is not popular because it is just new, as I had only heard about it in the last 2 weeks.
I don’t have any experience with bamboo and resale of houses, but when I saw it, it looked just like timber floorboards, so that makes me think that it may not make any difference to the resale price.
Kelly
