Cabo.

Further to what you have told me thus far:

1) What increase in interest rate is associated with a “commercial deal”?

ONLY applicable of more than 4 units on the one title and then in some cases can be the same as residential rates.

2) Is land tax based on dwelling number, block size, individual unit floor size, bed room number, dunnies, or what? What economy of scale can i expect from rates and taxes etc compared to buying a house?

This will vary from State to State and from Council to Council. Also ensure that when you purchase a blick in line they are not Strata Titled otherwise you will ned up paying the same amount of Rates as you would if you purchased them all individually. We de-strated a block of units in Brissie a couple of years which was long term hold simply to reduce the rates payable.

3) Roughly how much is the average council rego for a multiple dwelling property and is it paid yearly, or a once off?

Paid annually and again will vary from Council to Council and dependant on things like number of toilets or bathrooms you have.

4) Do building / landlords insurance premiums vary much depending on whether it is a house or a block of flats?

Unsure suggest you check with a good insurance broker. Not even sure you can get an in line landlords protection policy.

5) Who pays for common lighting etc, the tenents of the landlord?

You as the owner and the landlord do unless the tenancy agreement states otherwise. Good luck collecting it.

6) Does the tenent of a unit in a set of flats have different rights to that of a tenent of a house? …specifically, regarding inconvenience associated with renovating & maintenance?

No All tenants are protected under the Residential Tenancy Act in your State.

7) Is George Dubblya really as stupid as he looks?

Yes

And lastly, do real estate agents grant you an economy scale in the management of 4 units in the same complex, as opposed to 4 houses?

Its all about negotiation.

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

Leo

Sorry how could this have an effect on my wrap business.

If you do nothing wrong then you have nothing to worry about.

All of our clients over 9 years have located their own properties and come to us with the deal so they have always been sware of what the original asking price was.

They receive a letter of oofer from us advising them what they can go upto in the way of a purchase price and if they proceed they get a letter advising them what the onsale price will be.

They all require independant legal advice and out Contracts include a declaration to be signed by their lawyer or alternatively they sign to waive their rights to independant legal advice.

All Contracts are UCCC complient. In the event of possession the accrued equity after costs and charges incurred is returned to the wrappee.

I am at loss as why wrapping is now in threat but perhaps you could enlighten me further.

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

Resi

Have a look at the getting creative forum Terry W posted comments and a link to the full case.

My opinion is the wrapper deserved what he got.

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

106% available if the postcode and suburb is right

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

Terry

Another great piece of Jenman journalism.

Funny he was never like that when i drew up the Contract to buy a block of units off his parent in Hamilton Qld in 1998.

He couldn’t even be bothered to comply with the terms of the sale which stimpulated that the Vendor was responsible for serving notices on the tenants to leave. Due to this we almost terminated and sued his parents for Specific Performance.

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

Cabo

LMI refers to Lenders Mortgage Insurance. A premium collected by the lender (usually dependant on the Loan to Valuation ratio) to cover them in the event of the property being sold due to default by the purchaser and the lender making a loss.

Obviosuly if you can afford or find a block of units them you might expect to get some economy of scale in the purhcase price.

For financing if the block is over 4 units then it is likely to be treated as a Commercial deal and whilst can be financed upto 80% likely to cost you slightly more in interest rate and set up costs.

Costs in buying a unit would include rates, body corporate fees and possibly land tax (varies from state to state) and you as the owner a responsible. You maybe able to pass some of these on the tenant by way of rent.

In a block of units you may find that there is no Body Corporate which will save you something however you will have Council registration for a multiple dwelling and Buildings Insurance which is not cheap.

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

Whilst i agree a couple of the points you have made are useful one of the golden rules for me would be to check out careful the Body Corporate set up.

Body Corporate fees cover an administration fee for day to day running of the BD as well as sinking funds which puts money away for work to be done on the Building.

Some of the older buildings are starting to require work and the last thing for a new investor is to find that you have to pay out a large contribution to cover major works to the property unless of course this is reflected in the purchase price.

Whilst most States make provision for disclosure your BC will only disclose to you in a search of anything that has been minuted and is forthcoming.

Check the building for yourself and maybe ask another owner is there any expenditure planned such as new lift, air conditioning upgrate etc

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

Cabo

Yes dependant on the rental income assessment can make a big difference in increasing your borrowing capacity.

Most lenders accept between 75-80% of the rental income you receive however in saying that certain lenders take 100% of the rent you receive on properties which they dont take as security.

Also the negative gearing impact makes a BIG diference as you state. Some lenders include just the interest loss others make an allowance for depreciation.

What I would suggest is to run your figures past an independant mortgage broker and see what they come up with. However remember whoever you use make sure that you structure that loan correctly as getting it wrong can be an expensive mistake inb the long run.

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

Do a search on the topic as this has been covered many many times over the last few months

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.

dallasm

Making the Contract subject to a material change of use will probably require the Vendor to sign and authorise the application which may cause him further concerns. This will no provision for who is responsible for the costs of such application ete etc.

Then you have finance.

Why not make the contract merely “subject to and conditional upon the purchaser carrying out his due diligence on the property within a period of xyz days and being entirely satified with his findings.”

This may amalgamate a couple of clauses into one and make it more palatable for the vendor.

Once the Vendor has accepted your terms and signed the contract as long as you perform everything in your power to comply with your conditions and timeframe then the vendor cannot withdraw.

If he fails to settle you would have a “Specific Performance” claim against him.

On the other hand accept that if you drag the chain he may not agree to any time extensions.

Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.com

Specialising in US & IP finance.