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melbear
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@melbear
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February 10, 2004 - 12:07 pm
Hi guys
My point was that there could have been some rental demand for those civvies that got shifted down to Laverton from Canberra. I know that if I had to go (not that I would, I would change jobs first), I would prefer to start living close to work for the first 12 months or so before I was happy that I knew my way around and moved on.
IF there is more movement to Laverton, it may be better for investors. I don’t know the answer to that, as I have been out of the loop for Defence movements for a year now.
Cheers
Mel
melbear
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February 10, 2004 - 12:03 pm
MarkyMark
Remember that the deal DOES NOT have to meet the 11 Sec Sol to actually be cash positive.
If the numbers stack up, go for it. Don’t be too hung up on what is used mainly as a filter to get rid of obviously ‘not good for you’ deals.
Cheers
Mel
melbear
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February 10, 2004 - 11:58 am
Hey Bear
How did you go? Is the tenant all signed up, and everybody happy?
Cheers
Mel
melbear
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February 10, 2004 - 9:51 am
Can he not transfer it at whatever value he likes, but when it comes to CGT and Stamp Duty it will be assessed on ‘fair market value’, especially as the transaction is not arms’ length?
Cheers
Mel
melbear
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February 10, 2004 - 9:45 am
Wow [] Julia
Mavster, I think you are stuck at the moment. Basically, the money you borrowed to buy the IP was deductible while it was your IP. Now that it is your home, it is not. Any loan that was remaining from that ORIGINALLY drawn to buy your previous PPOR is deductible. Moving the money around as you have now just makes it a nightmare from what I can see, but hasn’t increased your deductibility.
The only way to get around it, as I see it, is to follow Julia’s tips, and you can slowly recover from the non deductible debt.
Or, you could turn your present home back into an IP!
Cheers
Mel
melbear
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@melbear
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February 9, 2004 - 9:14 am
Ours was a solicitor. He’s obviously one of those ‘victim’ mentality people.
Unfortunately, they lost their house in the Canberra Bushfires last year. They have onsold their land for a massive price – more than their house cost, so add to that their insurance payout, and hey, instant $600K or so.
I offered to provide furniture, and that they could keep it after 12 months. It was a brand new townhouse, so had some issues that the builder would have to fix – providing he was told about them. The guy refused to allow anybody access except between 8.15 and 8.30. Not finished by then, well, come back tomorrow and i might let you in.
Short story, they must have found their new ‘dream house’, plus their insurance that paid for the rent had run out, so, let’s find a way to break the lease shall we. they took US to the tribunal, where the tribunal apologised for keeping Dr ****** waiting (?!), and allowed him to gain a break in the lease, but also ordered us to pay compensation of $700 for not having the problems fixed – plus some money for some other problems that they only now decided to mention!!
I will never again rent to a solicitor! We’ve since sold that townhouse – too much hassle.
Cheers
Mel
melbear
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February 8, 2004 - 9:12 am
Hi TIG
Before you go making any decisions about selling etc., I would make a serious effort to find out what your borrowing power is. To this end, I would contact one of the many brokers on this site – they will let you know fairly quickly where you stand, and as they all invest themselves, they could probably give you their opinion on the best way for you to move forward.
Cheers
Mel
melbear
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February 8, 2004 - 9:09 am
Hi Jackie5
Welcome to the forum. That doesn’t sound like such a good return on your fully owned property. $170 per week?
Contact one of the Mortgage Brokers on this site, they’ll help you out re your finances. As for strategy, if you can’t afford to subsidise the properties in the short term, you’d be best looking at buying +ve properties.
Possibly don’t buy a PPOR for yourselves, as all this debt will be non deductible. Consider renting, and buying some more IPs, so that you can increase your cashflow. Then when your income picks up in Aust again, you could think about buying a PPOR.
Cheers
Mel
melbear
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February 8, 2004 - 4:51 am
kay, Huey is a lovely lady![]
I can’t say that I have ‘lost’ friends over my successes (or otherwise[8]) of investing, but over time I do see them less and less because we are doing different things with our lives. It’s spot on with the kids too – most of my friends have kids now, and I don’t, so when I do see them, if at a party or something, you see that their circle of friends includes a lot more people who now have kids too. that’s just life.
I also have met and am now friends with a lot of other people (some from this forum – billfromoz, shaunwalker, Phil, and Andrew) because of our common interest. I’d like to think that we are now friends also, rather than just investors who meet up.
I do catch up with my schoolfriends, but that’s not as often as Uni days, as we all work, and have other constraints on our time.
Cheers
Mel
melbear
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February 8, 2004 - 4:31 am
Hey Huey
good to see you are back.
Check out your agreement with your PM. We found (to our horror) that the PM had put a clause in saying that we had to pay THEM two weeks rent for every property that currently had a fixed term lease. If this is the case with you, I would wait until a month to go, or at the end of the lease – and make sure they don’t sign up a new lease. Keep it month to month until you’ve changed managers.
If there is no penalty for getting out early, then go as soon as you want to.
Cheers
Mel
melbear
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February 8, 2004 - 4:26 am
Tell me – What is the ‘bad side’ of property?
Did your financial planner buy a unit up there in QLD in the early to mid 90’s? Did he lose money hand over fist?
Other than that, if you buy well – which you obviously have done – and hold for the long term, how can you lose?
In my opinion, you lose by selling, in agent’s fees, in CGT, and then in the buying costs of your next investment.
Buy shares/managed funds (that’ll be what he wants you to buy, not direct shares) if you want, but start putting money towards it now. don’t sell your good performers just cos he who obviously has been burnt is telling you to.
Cheers
Mel
melbear
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February 8, 2004 - 4:13 am
Mijava, that was probably Victor Ollis, of um, kay, what was that firms name again?
He’s probably going to sell them at a profit to sydney folk, and move pensioners to live out there.
Cheers
Mel
melbear
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February 8, 2004 - 4:08 am
Bill, what we did was to take to our solicitor, in point form, what we wanted included. Also remembering to allow the tenant to place a caveat on the title, to ensure that there will be funds available to ‘give’ them when the contract is up.
I had another response, but the computer ate it, so I’ve abbreviated somewhat.
Cheers
Mel
melbear
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February 8, 2004 - 3:54 am
Damon, you say they are valued at $250K, yet your debt is only $125K, and it’s costing you ‘just’ $200 a week to have created $125K in 3 months?
Why don’t you build a house on the one where building costs would be least (for a good house though), and then rent it out – hopefully for enough to cover the extra loan repayments (building loan) AND your $200? Failing that, you’ll still be able to claim depreciation etc. on the new building, and could claim the interest for that land in your tax, so the taxman would go some way towards paying for your investments.
If you really can’t afford the repayments, then sell, but it sounds like you have a buffer in your LOC and can probably afford to cover the payments for a while. I’d look at doing that personally. But I would definitely look at building a house.
Cheers
Mel
melbear
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February 8, 2004 - 3:11 am
These days, the banks enforce you to obtain independent legal advice if you are going guarantee. Their solicitors are not prepared to explain it to you, for fear of the backlash.
I owned the above mentioned property jointly with my Dad (after Grandma passed away), and I wanted to borrow more money against it (only in my name). The bank wouldn’t advise Dad, and made him go to an independent solicitor – who said that they wouldn’t give that advice in future. So the banks would now pretty much lend with co borrowers rather than guarantors, but if they do accept a guarantor, my experience is that they will ensure independent legal advice is obtained – and a certificate provided to that effect.
Cheers
Mel
melbear
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February 7, 2004 - 9:11 am
I’ve heard of people getting 6 month settlements done on valuation. I guess it depends on your relationship with the bank, and how you present the deal to them.
If you can give them a whole heap of market research (accurate of course), and perhaps show them that you got a discount on purchase originally, then you might get it through.
We had some settlements that were greater than 12 months, and it was no problem (2 diff banks) getting valuation loans.
Cheers
Mel
melbear
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February 7, 2004 - 8:55 am
With only a $200 gap (I assume monthly, or is it weekly – ouch!), you should be able to borrow some money to either buy a cashflow positive place, or better still, build on one or two or three of your blocks of land, to increase the income. Of course, you’ll be borrowing more, but if your rental can cover all borrowing costs, plus that $200, you’ll be in front. Then you’ve got more breathing space to do more.
Cheers
Mel
melbear
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February 7, 2004 - 8:42 am
Hi aussie
You will definitely be up for CGT and more Stamp Duty if you transfer, so I wouldn’t advise to do that.
What you could do though, is set up a trust, refinance the properties you have to get some cash to invest, and lend it to the trust so that the trust can then purchase for you the cashflow positive properties.
If you have a surf around this site, there are a few people that are willing to act as spotters/bird doggers etc. to find the properties for you. If you’re that far away, then this might not be a bad option. Off the top of my head, Bear1964 is the only one who looks in Aust that is a regular on here. Minimogul and Westan seem to do the same for NZ properties.
Cheers
Mel
melbear
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February 7, 2004 - 8:25 am
Manofaction, I would have thought that all bookstores would stock this book continually in their ‘business’ section. It’s certainly been in every Collins, Dymocks, Angus & Robertson that I have ever looked in.
Cheers
Mel
melbear
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February 7, 2004 - 8:24 am
Hey Tools, as they are both deductible does it matter which is paid back?
Although I suppose it does if you sell the shares, but if you’re just paying it off, it shouldn’t affect your ‘income’ as you still claim all the interest?
Cheers
Mel