Hi Yanhong, if you listen to the likes of Scamp, you'll never in this life ever own any property. Run a check of his posts and you'll see what I mean.Having said that, you still are faced with a decision. Before your last post about the higher valuation, I was going to say that $40k variation is NOT big. It's less than 10% of the offer price. It's…[Read more]

Hi, all the comments are right and very kind too, especially Scott.You have plenty of equity but do not want to risk your house. Then WHY are you considering direct investment at all?You don't want to put in any cash and you expect a lender to fully fund your purchase?How are you going to repay the loan?Commercial loan rates are generally 2-3%…[Read more]

Hi, Duckster is right. $75 p.w. is not difficult to pay down. Increase payments to $400 per month and it gets progressively easier.KY

Hi, generally council valuation is lower than sale price. Nowadays council has increased valuations significantly.I once owned a house that council valued at $260000, the bank valued it $330000 and I sold it for $395000.$350000 is a fairly high price for outer Adelaide suburb, should be new, 4BRKY

Hi, can you rebuild 2 on your PPOR block? If not, can you reno/extend and put a unit onto existing structure so that you have a large section of your current block to live in and an additional smaller unit to rent out for income?You can then borrow off your current IP to do all of the above. However, number crunching is essential.Good luck,KY

Unmester, do you own a house? Have you noticed the cost of cement, bricks, timber etc have ALL gone up? Plus the cost of connections, water, electricity etc etc?For 5 days, we've been trying to get the tradie to fix the ceiling. And give us quotes on other repairs + painting.The painter woman we previously asked is booked up to August.There're a…[Read more]

Hi, it happens all the time.And the ones who can't get ahead are the ones who did not take the 1st step. Share this experience with you. Someone in 1994 had enough savings to buy an IP. Talked about it, looked at dozens of houses, wanted to squeeze the seller, would not offer the price asked. This one is not good enough, that one is not worth the…[Read more]

hi digit, good to hear you're able to buy it 1st and just mosey along with the holding costs as -ve gearing. I did one [my 1st ever subdivision] like that. The property was quite horrendous [hence the low price] but the lenders classified it commercial. I went ahead & bought it knocking off another tenK. Holding costs were very high in my case but…[Read more]

Hi, can this be done?Buy it as a residential property [house and land] I'd go through another lender.Then with all the permits etc, apply for construction loan. The construction loan will most likely be classified as a business loan. Fees are appreciably higher but interest is charged only when building costs build up. If you can't manage the…[Read more]

Hi, this is why our FHB is not subprime.Husband & wife just bought house & land package. Borrowed $290000.At 5%, their repayment interest = $14500 p.a.Their current rental = $320 pw = $16640 p.a.The whole family is currently working more hours to set aside some more for when their new home is ready.KY

Hi, is this possible? Buy acreage property now. Use it as IP and improve as in what you'd like when you transfer family there. While it's an IP, milk all the tax benefits you can get eg. if you renovate, the renovation cost can be partly recovered by tax claims.Then, say in 2 years' time, you move into acreage property [having claimed GST +…[Read more]

Hi, you sound really stressed. Can you sell PPOR instead? $30000 drop is not dire but not being able to make repayments is.You might take a pasting on the price though. You might want to consider selling on a leaseback i.e. you rent back the house and pay the investor enough to make it worthwhile for them.I did that last year and used my repayment…[Read more]

Hi Ajay, I live in Adelaide and I DO NOT BELIEVE that Adelaide prices will go up the way that they did in 07.I further think that they won't go down much either. So if you're buying 1st home with govt grant, not much point waiting. Buy as good as you can. What I would not do is buy believing that after I buy, the capital gain will be such and…[Read more]

Hi, this has been discussed elsewhere. In my opinion, it's a lot of projection and speculation based on inadequate analysis.1 are all FHB young? Did anyone do a breakdown on this?2 what is the result of extrapolating current rent to repayment?Anecdotal instances go against the sensationalist headlines about FHB spiralling into a subprime…[Read more]

Hi, well done. Exactly how it's done and you can look for the best property you can get for the amount that you've allocated. Have you considered that you can also leverage off your properties to buy shares? You get the same -ve gearing advantages and have potential to get a lot of capital gain.Please understand that I'm not giving advice. You…[Read more]

Hi, why are you thinking of a PPOR loan instead of an investment loan?KY

Hi, there might be a way around it.Apparently, you can now borrow as an individual and lend it to your smsf. The rent [which your business pays] is used to pay the interest on the loan. If it's an undeducted contribution to smsf, the interest is probably not tax deductible.You might also be in a position to 'salary sacrifice' a large portion of…[Read more]

Hi Carpe, a couple more points to consider [as though you don't have enough to think about!] Just something I've observed : 'best' time to build seems to be near the end of a recession – our recession is just beginning so your idea to wait & learn all the necessary steps while waiting seems sensible.Another point is Canberra has peaked after a…[Read more]

Hi Rudra, if your IP is costing you $200 pw then it's costing you $10000+ per year. Couldn't you have found a property on realestate.com for that money? Plus if you put in 20%, then it's costing you more than $10000 p.a. Your IP better have good cap gains.KY

Hi, also holding costs = 7% x $1M = $70000 Your end values might hold up [can't see 2 storey houses less than $550K] but S Hales brought up really pertinent points.Also GST on sale = 10% less construction costs.You do have a margin but do factor in a large contingency cost.Good luck,KY