Forum Replies Created
Thanks Roxy,
I did think of that. But issue is price. I saw some listing with plans and permits approved will cost around 120K to 150K more than normal lot with just STCA.
Do you know any other place where can I found planning or permit approved property other then the realestate sites like Domain and Realestate.com.au ??
Hi Ivan,
That is very nice brief.
I think you are right and even we friends have considered to put everything on paper.
Ya I have read lot about this area and seems these areas are very promising.
How many developments you did in these areas and what was your estimated project cost. We are thinking of either villas or townhouses.
Thanks for your advise. I will PM you later for further information.
Hi Matrix 5,
That is also a good idea. May be I will go and talk to some good agents if they come across any such kind of property.
Thanks for your suggestions.
Thanks Oscar,
You may be right that there are many properties which are not mentioned or phrased STCA in advertisment but still it could be a development site. But how can someone like me can find such a properties other than looking for phrase STCA in the advertisements. Does anyone provide this kind of service who can check or find some good development site.
We are looking in East, South East & Bayside suburbs of Melbourne
– Bayswater
– Frankston
– Ringwood
– Ferntreegully
What trend we will see in near future in Melbourne? Is property market looking very positive for mid range property priced between 400,00.00 – 600,000.00?
If you are thinking to invest, which type of property you consider – unit, apartment, villa, house with land, townhouse ??
Any suggestions ??
Thanks Scott,
I will do the same if I will not get the response here.
Terryw, I think you are right that I am confused between Equity and Loan.
I understand if you withdraw more loan you have to pay the Interest on it and if you set up LOC you pay the interest since you withdraw the fund. But what if I withdraw the equity from my IP, do I have to pay the interest ??
Hi Jamie,
Thanks for your response.
Sorry for confusion. And also sorry for typo in my previous post. I meant Cash not Case …
What I am trying to ask is, If I have extra money, should I may a payment in your property and then withdraw equity from it for next investment or keep it cash and use it for next investment.
Lets say I have a 50000.00 in my account. And for example my property value is 550000.00 and debt on property is 350000.00.
Equity without lump sum payment of 50000.00 in mortgage loan = (550,000.00 x 0.80) – 350,000.00 = 90,000.00
I have two options.
Opt 1 : Pay 50000.00 to the loan account and withdraw an equity from it.
Total Equity I can Withdraw = (550,000.00 x 0.80) – 350,000.00 – 50000.00 = 140,000.00
In this case I will get extra 50000.00 equity but I will be paying interest on that extra 50000.00 I withdrawn from the equity. That means I am paying an interest for my own money.
Opt 2 : Use 50000.00 for next investment without paying in mortage loan
Total money for investment = Equity without lump sum payment + 50000.00 = 90,000.00 + 50000.00 = 140000.00
In this case I will get same money for my next investment but I will be paying interest on the equity I have withdrawn = 90000.00 not my 50000.00 …
Can you tell me my understanding is correct about option 1 and if it is correct, that definitely option 2 is better option … m i right ?? please correct me if anything wrong there …
FinSpec wrote:A lot will depend on where you are located. It sounds like something that I've done to help a lot of new investors out, and it can be invaluable to have an experienced person by your side. If you let me know what town / state you're in, I'll PM you some contacts that might be able to help. And I'm sure that everyone else in here is going to have a few names for you as well.I am based in Melbourne.
Phil_Melb wrote:Hi Microchip,
Your stratergy for the $30K will cause you disadvantage.Reason – Whilst they are both IP's your interest deductions will basically be the same. You're just shifting $30K from one loan to another, one goes up $30K one goes down $30K. Except you are going to pay refinance costs (your disadvantage).
When you move into IP 1 it ceases to be an income producing Asset so the interest on its original loan is non deductible and the interest on the $30K also becomes non deductible.
Don't be confused by the common misunderstanding that borrowing against an investment property means its automatically deductible. It is what the loan goes towards that determines if you can claim or not.
Phil
All these are very confusing. Where can we seek help for investment strategy?
Is there any good reference of institution who can be an advisor for an investment?
Thanks and Regards.
WJ Hooker wrote:your bank may charge you a fee and may not even allow it since you will have no equity in the house, but that another subject.Thanks for your reply WJ Hooker. I appreciate your quick response. But I didn't understand above quoted comment. May be it is a different topic but I would like to understand it as I thought bank should allow me to withdraw an equity from IP B and pay off from IP A.
WJ Hooker wrote:but again, if you use the money to simply repay some loan with another then you have not created another asset, thus will not be able to claim a tax deduction as you have no new assett giving you extra income.I know I am not creating any other asset. But my idea is to pay off the debt of IP A which I am targeting to live in to it.
For example at the start I have debt of 350,000.00 on IP A and 350,000.00 on IP B. I am paying 2500.00 of installments on both.
After 3 years price of IP B increased and it has an equity of 30,000.00 on that. IP A has also increased its price but I don't want to withdraw anything from there because it is the one I want to pay off.
Now I withdraw 30,000.00 from IP B and pay off from IP A. So My new debt will be something like this.
For IP A,
New Debt = 350,000 – 30,000 = 320,000.00
For IP B,
New Debt = 350,000 + 30,000 = 380,000.00
So My total debt will be still same 700,000.00 but my installment on IP A will reduce and Installment on IP B will increased.
In terms of tax benefit I will have same benefit as it was before. But what happen this way, I will transfer all my debt from IP A to IP B as time goes and I will pay off the IP A. Once I will pay off IP A, I will move in to that.
Is that right strategy or m i missing something?
Please help me to understand this.
WJ Hooker wrote:But, again if you ring the tax man they can give you a ruling…. It would be interesting to find out if you can get away with it legally.I will call up my accountant and find out.
Thanks for suggestion.
