Renting a house to uni students:

Pro:
1. High rental return ( room by room)

Con:
1. Damage to the home is likely
2. Not a lot of agent will take this up, you will have to self-manage
3. Tenants issues – Theft, dirty, don’t get along, noise
4. Insurance won’t insure
5. Can not declare to the bank in term of serviceability/ affordability
6. There have been a decreases in the number of student migrating to Aus in the past 2 years – high currency exchange and change in citizen/resident laws ( demand still there, but rent gone from $200 per room to $150…)
7. Short term rental – high vacancy during x-mas.

I guess it all depends on HOW many students we are talking about here??? if it’s only 1-2 boarding in a 3 bedroom house then won’t be too much of an issue and the insurance will happily take it up as well.

Regards
Michael

NO you can’t- Vic FHOG has a 1 year time limit- Must move in and become PPOR within 12 month of purchase, and live there for 6 month etc…

Regards
Michael

Need a bit more details to give you a define answ

1. Postcode of property?> since you mentioned it’s regional , then 95% LVR is most likely NOT possible- but can confirm once you give postcode.
2. Any another income? Husband? on $1,700 fortnightly you won’t have much left to service a loan — living expense for 2 adults + 1 kid? , the current IP etc…

An educated guess would say, the broker you spoken to is correct. You def can’t service a loan ( you might be able to service a much smaller loan) without an increase in income, LVR will be based on location and security type.

Also from a investors point of view, this purchase is not really +ve ! purchase for $500k to get 23k PA back is around 5% Gross Yield or less???? and given it’s REGIONAL QLD it should be more like 12-15%…..
Unless im missing something…

Regards
Michael

1- speak to real estate agent and shop around for different management fee
2. Theres not much you need- ID….it’s self explanatory once you see the agent.
3. ONe site agent or not doesnt matter, as long as they are good at what they do.

Regards
Michael

The general Juciy of this account is:

1. it can ONLY be for your PPOR- not investment – so you MUST make up your mind on this before investing
2. 17% interest for the fist $5,000 would beat placing the full 10k into a online saver—not sure what your question is tho.
3. There is a 4 years time lock on this account- meaning you can only take the funds out after the 4th year…BUT say you decide to buy on the 2nd year- that’s fine but the gov will not release the funds to you till the 4th year ( so it be sitting in the bank account for 2 years) *** this point was a new addition by the GOV, updated as of 15th of July 2011***

4. If after the 4th year your free to buy, but not required to do it straight away…it has a max time limit of 15 years- after the 15th year it will default to your super

5. Should you decide to buy a INV instead of PPOR- the funds till default to your super.

Read more on the Gov website- some details has been updated recently so read full terms and conditions.

P.s Im not a advocate for the first home savers account, just a mere suggestion that it’s available; i wouldn’t take it up if you want a INV OR your planing on going overseas for work or deciding to buy sooner then the 4 years gap.

Regards
Michael

?? yes bank will cash out 100k- WITH a loan….( apply for new loan- cash out equity release loan)

Regards
Michael

Absolutely a problem!

When you look at your bank statment it will say for example:
18/8/2011

etc… Now remember you can only claim the interest part back for Investment loans only; so how can you declare and separate which part of the
$1,600 is for the PPOR or IP???

Yes you may say, pro-rated it ..so 1/4 is IP —- $1,600 x 1/4- NOT THAT SIMPLE.

1. over time, you may deicide to pay extra into the account- so how can you decide then the % of ownership? it will get very complex
2. Your accountant is not gonna like it….ATO is not gonna like it- to much guess work, and complex.

Regards,

Michael

Hi,

You got nothing to be embarrassed about; small business is a tough business especially given the current market.
I had past small business who has been in a similar situation, from what i observe:

1. You can try to work it out with the bank- but 8/10 the bank will say no to extra funding or a higher overdraft – your already in debt…if they release more it be harder for them to chase up and recover.

2. Re-finance is only a option IF you have a clear exit strategy and Business plan with financial supported by your tax accountant – If a bank can see your in toruble, there is no way they would let you refinance to them just to make a few quick buck.

Possible Solutions that i have helped some client with:

1. If cash flow is a problem- consider a Business angel- where a investor will give you a lump sum for a % ownership of the company + repayment
2. Speak to current bank and work it out- seem to work most of the time, come armed with solid exit strategy and Business plan with financial supported by your tax accountant; dont say ” i think this will happen…. IF we do this this will happen etc…it should be like this.”

3. Defer Tax for the 3-6 month, speak to accountant and ATO about this…but possible to defer the tax for a period of time so you have better cash flow then pay back with interest.

Regards
Michael

1. Online saver- 6.5-6.3% — Ubank, Rabo, Citibank, Virgin, ING, Hunter…—Easy to access money if required for emergency, good interest… flexible

2. First home owners savers accountant- 17% interest paid by the Gov for the first $5,000 invested- can ONLY be used to buy your first property; need to invest min $5000 per financial year, can access the funds after the 4th year…can not access funds mid way. Conditions applies.

So doesn’t hurt to have a mix of both, since 17% is for the first 5k only…so keep 5 k in option 1 and another 5k in option 2….then once a year fund another 5k into option 2…

Note: Not financial advice, since i dont know your financial situation and personal details- just a general suggestion ( also the first home owner account does come with a lot of restrictions)

Regards
Michael

Ummm your doing this all wrong, for the reason you want anyway….

1. Stamp duty is payble for the transfer. ( depending on state)
2. Since you want to buy a house in joint names – it “MAY” ( i say may because i dont know the financial figures) not make a huge financial difference,– what your doing is really shifting from NOT having a mortgage to having a mortgage under your BF’s name- so really your Joint serviceabilitly has decreased but your join “savings” has increased by the sales.

Solution:
It’s a simple solution, ask for a equity release and use this money (cash out) as a deposit to purchase your home.
IE, Unit worth $200,000 —- Approach bank or broker to organise a equity release of say 50%— so $100,000 cash will be given to you to fund the home purchase.

Regards
Michael