Forum Replies Created
But I've just had it revalued in March. Would there be a difference now? What if it came back lower than that val?
I’m just looking to refinance my current PPOR to pay off the final amount on another property that settled back in March (I’m not looking at borrowing more against this IP as its considered higher risk). The properties in Adelaide.
No none of my properties are cross collaterised. I am a medical scientist.
Thanks, the val that the current lender did in about $50,000 above equiv sales in the area so i don't think other vals will come in as much more. Btw I work in the medical profession and still can't get LMI waived only doctors can.
18 months later it would be interesting to see what became of this investment. Can you update us Nathan?
Did some of our posts get removed from this topic? I'm sure I put on something more about Nathan Birch (in addition to the one that is still on here). I would like to say that I don't work for him, I don't get paid anything by him but I have paid him to buy me places in the past and been very happy with them. I never said go with him I just think it is worth looking at lots of options so you go with someone who is right for you. I spoke to quite a few buyers agents or similar until I chatted with Nathan and we clicked so I went with him. If you do the same you are likely to get someone who is good for you.
I just re-read my PMs email and she has said that she apologises but the previous PM put a tenant in as of settlement date (prior to hand-over time). Now I understand why the pre-settlement inspection showed no-one living there.
Catalyst. Actually I don't want to save money (I can afford the place whether it has a tenant or not) I want to make money by getting rid of the tenant and putting the rent up to fair market rent as I believe it is not at this level (I need more accurate information from the PM which when I speak to her tomorrow until I know exactly what the rent is). There was a pre-settlement inspection hence my comment about not sure why no-one noticed it was being lived in (it is fully furnished though). I don't understand you're question: "You went to all owners as they were purchased at the same time?" It wasn't bought though a buyers group, it was a group of people that got together and bought it effectively meaning that the vendor could sell all units quickly and we got a great price (he needed to sell all of them due to high debt levels). The PM was suggested by 2 buyers who use them already and there was no obligation to use them. The units are not new. I would really appreciate any comments about whether I have any legal recourse. The previous agency who signed the lease has sold his business and the vendor sold with huge debts so I doubt monetary compensation would be possible from the latter.
Tell me about it Scott no mates and Jamie. I went with this agency because it was recommended by people that already use it. The story is potentially more complicated than I've stated though. The property was originally rented by another agency. This agency has been sold (somewhere between me signing the contract and today – as it says they've sold up on their website). I suspect the first agency did a shifty, rented out the property below market value and did not tell anyone (not sure how no-one noticed someone living there?). Perhaps its rented to a friend or employee of the first agency hence the cheap rent?? Therefore the sales agent told the new PM it was vacant. I already thought it was vacant (as all the paperwork stated it was). I'm not sure when my PM found out that it wasn't vacant but I am really angry that she neglected to tell me. If it is rented for a year have I got any legal recourse? I'm $2000 out of pocket for the year if it has been. Can I just not make any non-urgent repairs for the year or am I legally responsible to do this?
I was just looking at my old posts and had a little chuckle over this one. I went ahead and bought the unit. It has cost me virtually nothing in the last 7 months since I bought it in terms of unexpected repairs. Four weeks after I bought it I got it revalued for $46,000 more than the purchase price. I have put up the rent twice and it is now positive cash flow. My last line of the post was original post was definitely accurate!!!
I didn't mean my remarks to be snide but our PMs work for us not our tenants, WE pay them. I put up my property $30 in the first instance as that was what other properties were getting in the same complex. Due to rental demand and high turnover of tenants similar properties in the area now get $380-$390 so again I'm putting the rent up. I'm also changing property managers because my existing one went on maternity leave and I'm not happy with the service I'm now getting from them. Property managers for my other properties suggest when a rental increase is warranted and this agency didn't notify me (also many other issues that have made me change).
Yes $80 is a lot to go up, but being $80 out of pocket is also a lot for the landlord.
I purchased a property late last year which was being rented for under market value so I immediately gave the tenants notice that the rent would increase by $30 per week. The tenant did not move out. I will soon be giving notice to increase the rent by another $30 per week so it is inline with rents in the area. I don't expect the tenant to move out. The reason for this is that they would simply be moving to something that has the same or similar rent anyway and have the hassle of moving from a second floor 2 bedroom unit. So in short if you only increase the rent to market value (even if that is $80 per week) it is a hassle for the tenant to move when they will probably pay the same elsewhere (of course they could always down size or go to a less expensive area).
Other people on this post have said that it is up to the landlord to put up rent and be in tune with market rent. Really? Why then do people pay for a property manager that includes in the contract 'rental reviews.' If you have employed a good property manager then they should be contacting you to increase the rent. Obviously people on this forum don't have property managers that are doing their job.
Remember property investing is a business just like a bank is a business or woolworths is – they don't care if they put up there fees/charges/prices just as long as there is a market that is willing to pay for it. So as a landlord the same unemotional rule needs to apply. We pay interest, rates, insurance etc. on our properties and they need to be covered by rent. You wouldn't hear woolworths saying oh we can't put the price of our products up, we'll just foot the shortfall for wages and utilities. They make a PROFIT.
Google Nathan Birch. Positives = experienced property investor who can recommend other professionals in property investing (eg. real estate agents, accountants, solicitors). Negative = pay for the service (but more likely to get a more profitable purchase) and all negotiations are done for you so not a real opportunity to learn about that side of property investing.
Dubstep: thanks, I'll PM you my address so you can post it over
Jacqui: I've got a depreciation schedule on one of my properties but I used Washington brown as BMT wouldn't honour a previous quote they had given me – even though I had it in writing. My accountant also said it didn't really matter which company I use (washington brown vs BMT) and I should choose the cheapest. Once my third is settled I'm going to organise both at the same time. I'm hoping for a reasonable tax return this year!
I really think the banks somehow have lower vals for 95% lends. I bought a property last August for $265,000 (bought under value). Got it revalued in september 2012 at $310,000 and borrowed up to 80%. Recently wanted to up the borrowing to 90%. The val only came in at $280,000 (they wouldn't use the $310,000 despite it being less than 6 months). I didn't have time to contest this so can't give any advice here.
Goodluck. Sometimes you have to be very creative with the borrowing to get what you want.
I have finally got everything to tally.
The problem was each loan amount was entered into the spreadsheet as the whole amount. I thought that I had included all fees into the capital costs list but I hadn't (only included solicitor fees, utility bills and stamp duty). So this added up to $4500, I have another $3500 in my IP offset account that I hadn't included. I also 'borrowed' $2000 from my myself and its sitting in my PPOR offset account and the final $500 is the amount that I've so far been out of pocket between bills, interest payments and rental income. These amounts have been rounded, it was never exactly $10,000.
I feel a little stupid now but because I have gone through everything with a fine tooth comb I now have accurate spreadsheets and new helpful information added to them too. I've also downloaded electronic account statements so that I no longer have to search through my over full filing cabinet.
The only bad news is I could have done with another $10,000!!!.
Thanks everyone.
Jamie: That's basically what I do too. I have a spreadsheet for each loan that is a download (from my online banking) of the interest paid on each loan and the total interest for all IP loans. Another spreadsheet includes the rental income and bills for my IPs. These seem to add up.
I can't help thinking that my first conveyancer has somehow taken too much money. They gave me lots of receipts and I paid them a cash amount (bank transfer) and then the rest was from a bank loan (paid by the bank). On paper it seems it add up but I feel like I'm missing something. They had to return a sum of money to me because they couldn't give me a final figure in time for me to transfer the money for settlement and I remember thinking that they didn't return enough but I justified it somehow at the time.
This solicitor was recommended to me by someone that is a big investor so should have been reputable.
Still need to investigate further.
I've also emailed my new accountant to see if they can go through everything for me. I'm really worried that this is going to come back and bite me at tax time if I can't account for it. Plus I'd like to use this money for another investment.
Jamie, the parking of equity release does make sense, I didn't do this because my first accountant suggested against it. Since then I have changed accountants!
I'm hoping I might get some replies about keeping track of finances. Are there easy to use programs available for investors?
Anthony K: I appreciate your advice but just want to clarify.
I hope I'm doing the right thing as I have a great and experienced team behind my investing.
I have 2 lenders because they are the ones that would lend me money. I'm expecting to purchase many more IPs so the amounts I have with these 2 lenders will soon be replicated with other lenders. I have threatened to leave bank 2 recently and they came up with a better offer. I stopped borrowing from Bank 1 because they basically stopped negotiating (I left my PPOR though because in some cases the easiest way is also the best way!). I have bank3 waiting in the wings if i need to use them.
I'm definately not cross-collaterising, each loan is separate and secured against one property only.
To clarify the four offset accounts: I have the bulk of my money (ie.99%) in my PPOR offset. Bank number 2 (my broker insisted that when I take out a new loan I open up another account, I argues the point but on this one decided to leave it and close it in the future) – no money goes in or out of this account it just sits there. I don't pay fees for any of my accounts. The offset against my IP that I use generally only has enough money in it to cover loan payments.
As for keeping my personal and investment monies separate I have had trouble keeping track of my money so far (remember the lost $10,000!!) if I combined everything it would be even harder.
Here's an exert from http://www.revenuesa.sa.gov.au/
Today, 15 October 2012, the Government announced that they have retargeted their home buyer assistance by:
• increasing the First Home Owner Grant (FHOG) for new homes from $7000 to $15 000 (ongoing) for contracts entered into on or after 15 October 2012:
• reducing the FHOG for established homes from $7000 to $5000 for eligible contracts entered into between the date the necessary amending legislation comes into force and 30 June 2014. The FHOG will be abolished for established homes from 1 July 2014; and
•replacing the $8000 First Home Bonus Grant with a Housing Construction Grant (HCG) of $8500 for all new home construction where contracts are entered into between 15 October 2012 and 30 June 2013 inclusive. The HCG will be available for properties valued up to $400 000, phasing out for properties valued up to $450 000.
Therefore first home owners if buying/building a new home get a total of $23500 in grants whereas a homeowner gets $8500 for new construction.
