Forum Replies Created
Yes that will be the reason but i still think there is a way round it.
If you find a full time job and there is a probabtionary period some lenders will want this to expire first before they will consider the application. Others you will be fine with.
Richard Taylor | Australia's leading private lender
Hi MM
Couple of points to bear in mind.
If you intend to buy it as an PPOR and then turn it into an IP down the track i personally would borrowing 95% LVR (even 100% maybe worth considering) and putting the extra funds into a 100% offset account.
Would look to take the loan as an interest only loan and accept the fact that you will incur LMI.
Remember mortgage insurance varies from lender to lender and insurer to insurer (some banks do not charge LMI but charge a risk fee or similar which can be cheaper). It is also a borrowing cost and can be tax deductible over the loan term or 5 years whichever is the shorter. It will proportionalised from the date you have the property for rent so is no big deal.
If you do decide to purchase a new PPOR down the track link the offset account to the new property.
Richard Taylor | Australia's leading private lender
Miss M
Firstly welcome to the forum and I hope you enjoy your time here.
Before spending money on a Financial Adviser (Yes I am one and we do charge by the hour for a Financial Plan or advice) you would be better of to consult a mortgage broker (Yes I am also one of these and I charge nothing for the advice given under my MB hat) to ascertain your borrowing capacity and to work out a workable loan structures etc.
Where you buy will depend on what your goals are when it comes to property investing.
Are you after cash flow and looking for positively geared property or capital growth and accept the yield will be lesser.
Is Depreciation or Building Write Off important .Do you have any dependants etc etc.
As you can see there are a few considerations and personally i think consulting a Financial Adviser is probably not the first port of call.
Richard Taylor | Australia's leading private lender
Scotty
I dont think having 2 Accountants is really feasable as the advice maybe different from each firm.
Chan Naylor are an Accounting firm like many others however there have carved a niche in the market with heavy marketing and book publications etc but there fees are charged like a wounded dog.
You can do just as well with a smaller specialised firm at a fraction of the price.
Would firstly get your lending structure done properly before you spend to much on moving forward.
Richard Taylor | Australia's leading private lender
Lizzie
Dont now about Brissie but if you are happy to deal with someone from the Gold Coast then try Steve Hodgkinson who is partner at the Gold Business Group in Southport.
Steve has been my Accountant for 12 years and is an expert in property investment and entity structuring.
He can be contacted on 5532 2855.
Tell him i referred you as most good property accountants are not taking on new clients.
Everyone from the forum i have referred to him have been delighted with the professionalism and knowledge.
Richard Taylor | Australia's leading private lender
Tugger
An interest only loan with a 100% offset account would be the preferred way to go.
One day you might want to purchase a PPOR so would need the capital but in the meantime gives you lots of options.
Richard Taylor | Australia's leading private lender
Yes the way a lender calculates interest is extremely important to the speed in which the loan is repaid.
You want to look for a loan that charges interest on the daily balance.
Some of the credit unions i see have quarterly rests which disadvatages you if you are looking at make capital reductions.
Richard Taylor | Australia's leading private lender
An Accountant certainly maybe able to advise you on your Accounting options but is unlikely to have an idea on loan structuring.
Certainly they are unable to advise you on most areas of Financial Planning.Any amendments to the title such as Transferring the property into Trust will incur Stamp Duty and possibly CGT and therefore is probably not worth merely to protect your current assets.
Structuring it correctly will avoid future and past mistakes and will set you up for the future.
This is the domain of a Mortgage Broker.
Richard Taylor | Australia's leading private lender
Marc
You are absolutely bang on.
Comes of typing a reply whilst i popped in from cutting the grass in the dark and rushed off as the mower was still going.Whew thank god i am not in finance…….oh help i am…. pass the calculator i dont have enough fingers.
Richard Taylor | Australia's leading private lender
tugger
Really i have never heard of a lender that insist on that.
Certainly would never recommend that. If you redraw the funds above 80% an the use is not for investment purposes you will be unable to claim the interest as a Tax deduction. Not sure who the lender is but it doesn not sound like a very flexible package.
Have the properties been purchased as Joint Tenants or Tenants in Common ?
Richard Taylor | Australia's leading private lender
Tugger
Using the equity in the properties by refinancing them will provide you with access to capital to purchase your next IP and so on.
I would advice you to consider switching the loans to interest only which in turn will reduce your loan repayments but also free up monthly capital to put towards the next IP.
If your mortgage broker structures them correctly you should be able to continue buying and building up an good portfolio and at the same time minimising your tax position.
Richard Taylor | Australia's leading private lender
Adrian
No if's or buts it will incur stamp duty.
After you have worked out the figures you need to consider the marginal tax rate of your wife.
If she is on a lower tax rate than you consider selling it into a Trust structure with you as a Unit holder / Trustee.Richard Taylor | Australia's leading private lender
Tony
JL is correct that the first hurdle should be assessing your borrowing capacity and setting up your structure to ensure the loan you take out can grow with you at the pace you wish to grow.
To expand your portfolio rapidly you will need a combination of serviceability and price increases to create equity.
Dont be in a hurry to buy buy buy but remember the rule of 72.
If you take an Asset / Porfolio and divide the anticipated annual rate of return / 72 this will give you the number of years you can expect for your asset to double in value.
Assume you have a house worth $100,000 with a 95% borrowing and the property is going at 8% PA.
This means in approximately 12.5 years your $100,000 property would now be worth $200,000 althought the loan would still
be on $95,000.You have gone from little or no equity to having over 50%.
Along the way you would use the available equity and build your portfolio.In saying all of this if it isnt constructed correctly initially then it will be an expensive mistake to correct.
Richard Taylor | Australia's leading private lender
Hi Gav
I am not being funny but the number seem to indicate the cash flow issue is relatively minor.
Your rent will shortly be $270 / week or$1170 / month.
Assume agents fees of 7.5% gives you a net rental income of around $250 / week.You have $200,000 owing on the property at say a rate of 8.35% interest only means $321 / week.
Shortfall prior to Rates, Body corp, insurance etc of $81 / week.
I am not sure how old the property is but there must be some Depreciation or BWO you can claim.
If all else fails feel free to shoot me an email and I can give you some wrapping information.
Richard Taylor | Australia's leading private lender
If you are casually employed and have been with the same employer or in the same industry for > 12 months you should be fine.
One part of your post confuses me:
"I do not own any property/ equity/ shares. No assets.
Willing to come out with a big deposit to get started in property investing".If you are willing to come out with a big deposit where is this to come from.
Do you intend to wait until you can afford it or do you have some other Asset tucked away ?Richard Taylor | Australia's leading private lender
What is it you want to know.
I do own one or two so maybe able to help.
Richard Taylor | Australia's leading private lender
John
You have a good start to your portfolio with 8 properties however the structure of the portfolio is important.
If you want to shoot me an email i can have a quick look at your position and make some structured advice.
My concerns are that they are cross collateralised so we might have a bit of a web to untangle.Richard Taylor | Australia's leading private lender
Louise …..
Just do a search on the Investor Club on the forum and you will see many many previous threads.
Richard Taylor | Australia's leading private lender
Hi Gav
A Nodoc loan means that you are not required to state any form of income whereas a lodoc loan requires you to state in most cases your income on the application however additional documentation is not required.
This product is aimed at the self employed market where the business owner has not had the opportunity of preparing their accounts and therefore this information is not readily available to be assessed.
In saying this most lenders will require a minimum of 1 year self employment.
There are a couple of non conforming lenders who will consider an application after 1 day however the rates and set up costs are more expensive.More details would be required to provide a proper answer.
Richard Taylor | Australia's leading private lender
Land values have risen quite considerably last year therefore you have to spend more time in looking for good deals…they are out there if you look hard enough. Anything that gives you a margin of around $50k should be good enough.
I have been referred a couple of deals with these sorts of margins in them over the last 2/3 weeks.
Richard Taylor | Australia's leading private lender
