Hi Freedom,
Yes, you can use the equity ($20k???) for whatever you want but banks will calculate this loan amount as 80% of the property value minus any debt you have on the property.
You also have to be able to service that debt.

I’m not sure how you’ve done your sums, but your equity ($20k???) is the value of the property minus the debt you owe…[Read more]

Well done Andrew, but please explain why it was not a 50/50 split?

It sounds like you’re ripping your partner off especially if he is putting up most of the money and receiving a much smaller return.
Perhaps you haven’t posted the full story and details?
You shouldn’t be so greedy – you know it’s one of the deadly sins? []

Nathan i don’t do wraps, but i’d be wary of investing in a town with a population of less than 20,000 people; let alone a town with less than 500 people – that’s a joke.

I don’t think you could seriously consider the potential for capital gains in such a small environment that sounds like it’s dependent on the other “big” town of 15,000…[Read more]

Hi Gerard,
I am also interested in SE Queensland and will be purchasing something there within the next 2-3 months. I hope to be more active in the area and was also thinking of subscribing to something like RP Data. From what resurrect says, it sounds like the most powerful and useful.
If you’re stil interested in sharing costs, e-mail me at…[Read more]

There are better deals around, especially without the $300 pa fee which sounds way too expensive to me.

Your AAPR (true interest rate) would probably be more than the standard variable (6.57%) with the fees you are paying.
Always ask your broker for the AAPR on a loan to get a better indication of what you are paying.

Don’t get excited about the…[Read more]

Hi Essykay,
My advice is to continue with your overseas employment for the next 2-3 years and perhaps employ someone to look on your behalf – like Nathan suggests.

As you’d know, the market on Australia’s east coast has pretty much peaked though is starting to flatten out a bit. Auction clearance rates are still pretty stable but have come down a…[Read more]

Yes, S/D is a state tax and is therefore calculated differently throughout Australia.

Be aware that S/D is calculated differently in QLD for owner-occupiers and investment properties are subject to much higher rates.

It’s also worth noting that exemptions and concessions on S/D may also apply to first home buyers and pensioners in some…[Read more]

Hi gazza17,
I would be very, very wary if i were you.
Firstly, buying off the plan is not recommended in the current market.
You could get away with this a few years ago due to the strong capital gains, but it’s highly unlikely the property will show any gain once it has been completed. When is the completion date?
You always pay a premium for a…[Read more]

I imagine the agent thinks you’re just shooting the breeze and will show you his/her stock when you actually prove you’re a serious buyer by coming to his town.
No reason for alarm bells to start ringing – i’ve heard this statement said by many agents over the years – what they are basically saying is that you should come and visit them, and then…[Read more]

I personally don’t like the idea of investing in rural areas where high unemployment and a high turnover of tenants is common.
However most of these rural areas do show more +ive cashflow properties but at the cost of minimal/nil capital growth.
You have to remember that tenants will typically rent a particular property because they work in the…[Read more]

Hi Sandi,
Sorry to hear about your situation but it’s true that the agent is acting on the vendor’s behalf and should be getting the best possible price for his/her client.

It sounds like your offer was very fair, though you don’t mention what the easking price was. I guess it would make a difference if the property was listed at $70,000 or…[Read more]

I have never heard of this approach as agents will usually do this as a service in the hope you do list with them – but never for a fee!

Perhaps the country town is so small that there is not really much competition and they think they can get away with it?

Do they claim that for $150 you will be provided with a written valuation, or is it…[Read more]

Hi dosser,
Sounds like you’r negatively geared and are having difficulty meeting your repayment obligations.

You’ll probably get a lot of people recommending you go out and buy something cashflow +ive to balance the equation – nothing wrong with this strategy but it doesn’t sound like an ideal time to be doing it now.

Ae your loans I.O or…[Read more]

Hi Monstango_2010,
Sounds interesting. I’d like to express an interest in testing your software.
I can also recommend a good web site where it can be available for downloading by other like-minded people.
If you’re interested, please e-mail me at feral@ekno.com
All the best with it,
Quentin

~ better to die on your feet than to live on your knees ~

You may have to reduce the rent a bit to compensate them for the reduced size of their backyard.
If they are on a lease, you may want to take $5 pw off their current rent, until the end of the lease. From the tenant’s point of view, they are paying the same rent for something different to what they moved into.
I think it’s very important to keep…[Read more]

I really liked “Illusions” by Richard Bach – another fictional story that motivates.

Kiyosaki’s books are good for motivation but little else. The content of Kiyosaki’s books could be summed up in a couple of paragraphs, but obviously the royalties would not be there.
Kiyosaki has made a lot of money from his ability to motivate and impress the…[Read more]

It’s true that Reed hasn’t got a lot of good things to say about many people but at least he states them openly without hiding behind a pseudonym, and also gives some evidence to his claims.
However, I really agree with what he has to say about Kiyosaki. Why? Because he backs up his claims with evidence. He doesn’t just rant on about how Kiyosaki…[Read more]

If you know what the rent is, divide this amount by the yield and this will give you the “purchase price”.
Example:
Rent is $200pw = $10,400 p.a.
$10,400 / 4% = $260,000
$10,400 / 5% = $208,000
$10,400 / 6% = $173,333
$10,400 / 7% = $148,571
Of course you will have to decide on a yield factor (depending on location and type of building), but it…[Read more]

Hi Hurricane,
Yes, CGT exemptions end on the family home (PPOR) when it is let out.
However, you will only be charged CGT on your PPOR from the date you let it out from, i.e June 2002 and not for the time you lived in it (when it was considered your PPOR). This is the date from when you purchased it and from the date you let it out.
Ideally, you…[Read more]

Hi BorisS,
I’d check with your accountant, but i’m sure that it’s ok to depreciate new carpet, fittings etc which is put in before the tenant moves in.
And i’m also sure that the ATO will consider this a capital cost that can be deducted from the selling price for CGT.
Maybe somene can correct me on this?
Either way, i’d do it before the tenant…[Read more]