Hi Richard,

Just wondering what makes you say that the loan from a $369,000 property would be more than $550/week. If you have just a 5% deposit and a 95% loan ($350.550) at 8% (which to my knowledge is higher than lenders at the moment, but seems to be where interest rates are heading) then your weekly I/O repayments will be around $539.
$350,550 x 0.08 / 52 = ~$539/week

Yes, they would definately be higher if it was P&I, but if it was interest only would it be more? Is there something I am missing that would make the payments higher? Maybe fees, or did I calculate wrong?

@ Sharon – Correct me anyone if I am wrong (because I could be), but I thought vendor finance was where the vendor of the property you are buying holds back some of the cost of the property. Eg, on a $400,000 property you might pay $300,000 on settlement and the remaining $100,000 over 5 years at whatever percentage. I don’t think you can pick a house you like and then ask someone else for vendor finance. If you found a house you like then you would need to approach that vendor (the current owner) to hold back some of the finance. I know there might be other tricky way to do it, but I thought this was how vendor finance usually worked. Am I right or wrong?

Hey oo3c,

I was listening to Steve McKnight the other day (so this comes from his mouth not my experience) and he said that you want to buy structurally sound ugly properties. He said (I think more as a rule of thumb than anything) that if you can’t see it, then it doesn’t add as much value as it costs. For example, restumping, fixing termite damage in the walls. If you can’t see it then it is likely it will not add as much value as you put into it. However, if you can see it (like a kitchen and bathroom) then there is the chance of adding value.
s for the $20k on adding value or not, it really depends. I know that is not what you want to hear, but if you know what you are doing you could spend $20k on a new kitchen and bathroom and add a heap of value to the property. If you don’t know what you are doing then you might not add value.
My parents recently sold their house and they weren’t willing to redo the kitchen. So we bought new handles for the doors and we painted over the timber skirtings. All it cost us was less than $100 and the real estate agents came back 2 months later and thought it was a new kitchen!!!
So if you know what you are doing, then yes a kitchen and bathroom can sell a house. We got my parents house valued at $730k-$750k just before we renovated. After we spent 2 weeks and $1,000 on the property it sold for $825k. That could be the market moving very quickly (which it was) but a lot of it (I think) was the presentation.

So to conclude a long winded explanation. Spending $20k can make you your money back and some if you use it wisely. Why else would so many people spend money and time renovating for profit?

Hey Chriscarman,

Just wanted to thank you for bringing this up. I have been in contact with the moderator and this has really helped me understand how best to go about using this forum. I have official learned my lesson, so thanks for bringing it into the light.

Hopefully now we can move on and get on with helping each other out.

Ryan

As far as I have been told by the banks and mortgage brokers it would be extremely difficult to secure an interest only loan for 25-30 years. Usually banks do interest only loans with a term of 5 years, after which you are required to renew your loan. You can renew at interest only, or it might (in 5 year time) be affordable for you to do principle and interest.

Just so you know, house’s aren’t exactly cheap to build. If you have a budget of $330k and you want to buy a block of land and build on it, then you will have to find a pretty cheap block of land. Reading the posts in the forums people are spending over $200k just to build their buildings and if ouchiemama is right and houses are around $500k then you might have your work cut out for you. Not saying it can’t be done…just saying you might need to look hard.

Here is a thread regarding a Perth networking meeting https://www.propertyinvesting.com/forums/community/heads-up/4331209

As for the Capital Gains Tax as far as I am aware the tax office would definately remember you renting the place out for your first year. I think you pay capital gains tax on the amount of time the property was an investment and not your principle place of residence. So if you rented it out for one year and lived in it for 10 then when you sold you would pay 1/11th of the capital gains tax.

This is where I get confused. Because say you make $10,000 in passive income through cash flow (after expenses), but you have $10,000 of depreciation you can claim. The depreciation is a phantom loss as it doesn’t actually cost you anything at the time. This means you will still have $10,000 in your bank account that you can’t distribute to beneficiaries because technically you haven’t made any money. So my question is, what happens to this money and how can the beneficiaries get a hold of it and use it.

I check my populations by using wikipedia because it gathers information from the previous census (which was 2006). It says Moree has a population of 8083

I wouldn’t run away just because it has a declining population. As far as I am aware the declining population has a lot to do with the drought. THose areas have been in drought for the past 10 years or so (I think). If the drought stops then the area could make a lot of money. But the population is simply something to be careful of.

Fair call Plummer. I have a few bodge posts floating around out there (for which I officially apologise). So how can I delete the ones that are spammy? Because I have found that after posts are like a day old I can’t edit or delete them.

I have been reprimanded and I want to set things straight…but how can I do that without being able to delete or edit previous spammy posts.

ps. Overall, it is not my intention to spam, and I believe the majority of my posts are not spammy at all. I have had people thank me for my contributions in some instances…so they can’t be that bad for the forum.

Maybe he was talking about me, but I am not doing anything wrong. I am not a spammer. I am learning so much from being in this forum and I am enjoying the community. I plan on sticking around for a while.

Chris,

People are allowed to use signatures at the end of their posts (like mine). But as long as they are using the forum to contribute then most people don’t have any problems with it. My signature is small compared to some, but I use this forum to gather information and form an active part of the community…I’m not here to spam.

In fact I would have to say that there are not a lot of spammers in this forum. Yes there are some, but a lot less that normal forums and people can spot spammers from a mile away.