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I have had to raise funds short term recently to get a property deal across the line.
Step 1. Get a personal loan which is essentially a revolving credit facility.These can be available for as low as around 9% from building societies. (I got mine from the bank that I am employed by at 9% under a special staff deal). Draw down on the personal loan.
Step 2. Get a Credit Card from Citibank which allows a balance transfer from a personal loan at 1.9% for the first 12 months. You have to push Citibank to make sure you end up with the right product as they will keep trying to divert you to other cards. I am in a different financial situation to you but Citibank approved a $18,500 credit card limit and allowed me to do a balance transfer of $18,000 at 1.9% from the personal loan.
I think you will find that Queensland is just as up in arms about the tax. As someone who has just invested in property related to the mining boom in Queensland, I am also on the anti-Rudd band wagon. I guess when it comes to voting, everyone has to look after their own interests.
Just talking out loud, but can’t you get out a building contract from the pile and sign yourself up to contract with your own company?
VIC offers additional FHOGs for new home owners. You only pay stamp duty on the land for new homes.
If you want to buy into Wyndham Marina you had better be quick. I purchased in the first release. Releases 1 and 2 sold out very fast and the third and final release starts at the end of this month. It only has approx 240 blocks in total from all 3 releases, demand will be high when fully developed and very tightly held by those lucky enough to have bought in early.
Also Tarneit will have 3 rail stations in the next few years. (I also own in Tarneit).
NSW stamp duty rules are going through some interesting revisions at the moment
I just received and watched their free 2 hour DVD and was quite impressed with the content. You can tell they really understand the dynamics of how to make significant profits through property. Renovation was low on my list of potential ways to profit, but the DVD has got me seriously thinking about it. I would need some more money in the bank to finance the kind of deals that I would want to do though as it seems the best deals would be on homes around the $1 million mark in Sydney.
Something that I dont understand that perhaps someone has done the course could explain…. they say in the DVD that the cost to do a full reno is greater than the cost to do a new build. Why are they renovating, rather than knocking down a $1 miilion wreck and rebuilding a McMansion worth $3 million, instead of making expensive changes and getting $2 miilion?
I’m not an expert but my understanding is that GST is only applicable on new properties. I paid for specialist advice from the Quinn Group. Their owner is a regular contributor to one of the property magazines.
Laws are very specific when you go to onsell on what must be in the contract of sale. It must specifically state that the margin scheme is used or you will be liable for GST on the total value. Don't just assume that you are eligible to use the margin scheme.
It is intended for downsizers, to get them out of 4 bedroom houses, into units. They should end up with a significantly cheaper house than before.
Does anyone who is currently investing in property fall in this age bracket? Imagine being able to do renos without stamp duty, would be fantastic!!
actually the bit that surprised me, that Lewis confirmed was that the stamp duty paid by the client (when they take the title) is based on the value of the unimproved land, the same as my stamp duty was. It worked out surprisingly well, delayed, but also based on minimal value.
Great advice thanks Terry, having just been caught $20k short due to construction delays and rushing around madly last minute to complete another settlement, I am starting to learn to allow for such contingencies.
Thanks Terry,
Still exploring this further. Will engage with an architect / town planner in the next few weeks. When you say “all in one line” do you mean that they are not valued as strata titled units for individual sale, but instead together as a single block?
By the time the DA comes through I expect values in the area (Gladstone) to have increased and I am working on conservative sales values based on today’s prices. A few doors down they are selling similar townhouses (slightly inferior) for $430k now. (Mine will be 3 bed, 3 bath, 2 living, the ones for $430k are 3 bed, 2 bath 1 living).
I would work with local experts and have access to the bank’s valuation panel list to select the best valuer from to ensure I get the best possible valuation.
I am looking at doing a 6 townhouse development, with an expected end sale value around $2.4 million in today’s market, the construction cost will be around $1.45 million and I have paid 350k for the property initially, totalling $1.8M in costs.
So by the 65% rule, they would lend me approx $1.6 million for land and construction and I would have to fund the other $200k from my own money, plus fund the interest holding costs over the construction period. Does that sound right? Is there anything I am missing?
We checked with Lewis O’Brien who confirmed that was the case. If anyone should know it is Lewis. He would have done more wraps than anyone else in VIC.
Just wait till you see the huge power bills that come in over winter, now they know they dont have to pay them. Heaters will run all day and night and showers will be 30 minutes each.
Actuallly someone just resurfaced an old thread where Julia from Bantacs advised the same as you re: depreciation, which is a bummer. My handover was only this week on mine so I havent claimed any depreciation to date.
Yes you have to repay the GST, but only when they refinance and pay you out.
In VIC stamp duty is definitely only when the client takes title, may vary in other states.
Does the property that you are looking at have the same zoning as the unit blocks? If so if you could also purchase neighbouring blocks, you could be sitting on a gold mine. Then you get a DA and find a developer to buy it off you.
They don’t take title, pay stamp duty etc, until they make the final payment. Until then it is still my investment property that I am making a return on, and can claim the interest, depreciation etc as expenses on that investment.
Actually there will be no CGT applied. You are allowed to retain a house that you have been living in as your primary place of residence for up to 6 years after you move out and CGT will not be applied when you sell.
Why would an apartment cost as much to rent as you are getting in rent for a 3 bed house?
Also if you are making a loss on the rent each week compared to your costs, you can assist your cashflow by getting regular payments from the tax office on the basis of this loss.
It will also allow you to claim depreciation on the property.
I own 3 investment properties in Melbourne and Gladstone while living in Sydney and this works great for me. I can live where I want to without paying crazy prices for it and get the benefits of rules that only apply to investments, not your PPOR.
As suggested, see a good accountant that can give you advice to assist you.
People talk about rent money being wasted money, but you need to realise that interest is also wasted money. At least as an investment property it becomes tax deductable.
