@ Duckster – After reading your first post I was going to mention getting the loan secured over the two blocks of land….which will now have gone UP in value due to the subdivision. BUt you mentioned it yourself…

@a1159890 – Firstly….interesting username. Secondly, make sure you know all the fees associated with subdividing. If you think it is free you may find yourself in for a rude shock. If you combined only have 12k for a deposit how do you plan to pay for the subdivision?

Also, if you only have 12k and you want to establish the 95% LVR you will need to put down around $10k…leaving you only 2k. How do you plan to pay stamp duty, building and pest inspection, solicitor fees and other closing costs. It is unlikely that at a 95% LVR the bank will lend you the money for the closing costs because it would increase your LVR to more than 95%. Just something to be aware of.

@ Richard – I guess I am a little biased. I have had a few very bad experiences where mortgage brokers treated me extremely poorly. They told me it was impossible for me to invest. I then went to the banks myself and got lending directly from them without any real hassles.

I understand the value of mortgage brokers, but have been burnt by them a few too many times and thus do not know if I will ever go through a mortgage broker again.

Sounds like someone should start up a Cairns property group so you can all meet up with like minded people. I would be interested to go to one in Sydney

The worst areas in Moree are south-west corner….because that has high density government housing. There is also some government housing in the south-east corner. I think these areas are reflected in price.

Recently was about to buy a property there, and the banks valued it 15% less than what I had bid for it. In Moree there isn’t any Lender’s insurance (as far as I am aware) and thus you need to establish an 80% LVR. WIth the property coming in 15% under sale price, I would have had to fork up a lot of extra cash…and that made the property not worth while.

Plus you make your money when you buy. So I definately don’t want to lose 15% of my money the day I purchase the property. For me, being careful and getting my bank valuation done before I applied saved me a lot of money in the long run.

PS. Moree has also been declining in population over the last 5 years….something to be aware of.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click Away

@ Kevin – If you are determined to sell yourself then I would do everything you can to get it on domain and realestate.com.au because this is where most people go. I would NEVER go to a site like homesales.com.au to search for a property…there wouldn’t be enough listings to make me interested.

So if you have to do it yourself then work hard to get your listing on those two sites.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click Away

Actually I currently live in a house that I don’t think they got council approval for dual occupancy.
It is a pain in the ass when I need to do anything with the RTA/government because their systems don’t register the A part of my address….they say it doesn’t exist.

Is it hard to get dual occupancy through council?

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click Away

@ Gords – It is difficult to give a straight answer with not much information.

You have to be careful, if you buy her out and then sell the house and buy a new one then you are looking at paying a lot of stamp duty and closing costs, which will negate any tax benefits you might have in buying a new property.

If you have paid off a lot of the property and it is positively geared then what tax benefits are you trying to achieve? Positively geared property don’t allow you to deduct much tax (except in the case of a lot of depreciation) and thus the tax advantages will be negligible.

In my opinion it is not wise to purchase a property based on the tax benefits. Just cos you save some tax doesn’t make something a good investment. Buy her out of the house if you deem it to be a good investment, if you don’t let it slide.

Plus (looking at the family/emotional side of things), it might be better to sell the house together, take half and then move on. My parents recently divorced and my dad was considering buying the house more our of emotional attachment than sound investment decision. If he kept the house it would have kept the bad memories of the split for everyone in the family and made it hard to move on with our lives. By selling the house it gave everyone in our family a fresh start. I know your boy is only 2, but selling might allow you and your wife to have a fresh start. There are plenty of good properties out there, so it might be worth selling this one for the emotional benefit and buying a new one. A symbol of letting go of the old and embracing the new.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click Away

ps. Buying her out and then selling the house seems silly. You still end up with half the profits (cos you had to buy her out). If you were going to do that you may as well just sell it and take half.

What are the values of land around that area?
Are you hiking up the price because you are offering vendor finance. Would you be willing to offer 20% finance?

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click Away

Terry’s idea could be worth considering. Instead of selling, and risking the bank not being able to service your construction loans, why not bring in someone else to help you finance it and take a 50/50 cut. Just an idea.

But I agree with Basbog, things change over time. Why might have worked for you 3-5 years ago might not be working today. I wouldn’t be scared to cull off the old properties in order for a more lucrative property. If you make more money and it gets you closer to your goal of financial freedom then why not go for it?

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click Away

Just a few things to be careful of.

1. If you get the new loan with the same bank then your loans are automatically cross securitised. This means if your townhouses fold, then the banks can go to your Principle Place of Residency (PPOR) and make you sell that. So be careful with that and maybe look at starting your next loan with a new bank.
2. Think about setting up your properties in a trust. Because one of them will be your investment it is a good idea to look at asset protection. See as an investment if the tenant hurts themself in your property then they can sue you, and if it is in your name then they can sue you for everything you are worth (your house, your car, your furniture, your 50k savings). But if it is in the name of a trust with a non-trading company as the trustee, then all they can sue you for is the investment property. So you might lose that but at least you won’t lose anything else.
I invest with trusts, and it is more difficult to get lending, but it is worth it in the end.

Ryan McLean
http://CashFlowInvestor.com.au
Positive Cash Flow Properties Are Just a Click Away