Forum Replies Created
The Torrens system is a normal title. The old system meant that the mortgagee actual has an equitable interest in the property. The enactment of the Torrens system in Australia (in 1870’s) changed that. Now the owner/borrower retains the equity interest and the lender (mortgagee) takes a charge over the property.
The vast majority of titles fall under the Torrens system so you should be ok. Talk to your solicitor/conveyancer for more information on this.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auI wouldn’t think that this would effect owner-occupiers, investors with buy and hold strategies. I think Richmond said that only 6% of the population own an investment property and of these people only 5% own more than 5 properties (therefore 0.3% of the population own more than 5 properties). Considering the number of active investors in the market you could probably assume that T+3 settlement terms would not impact the market much (as active investors only make up a small amount of the market).
However, the T+3 thing may attract a whole new set of investors to the market – property traders. If enough entered the market then perhaps they could have a notable effect on volatility.
Something to think about…good one Michael.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auYes and no.
Only one lender can have the first mortgage over your property. Therefore you can:
1. Increase your existing loan with your existing lender. The increase should be sufficient to finance 20% plus costs. You can then go to any lender and arrange finance for the remaining 80% (which that loan secured by the new property).
2. Refinance your existing loan so that the new lender has the first mortgage over both the existing and new property. However, I would advise you to still have two separate loans. One secured by your existing property and the other secured by the new property.
I hope that helps.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auSome things to take into account:
– Quality of asset (building and pest inspection report, position and size of house, land area, valuation, etc.).
– Location (population, demographics, industry, schools, shops, public transport, surrounding houses, demand for rental properties, etc.)
– Tenants (existing tenants?, history of tenancy, demand for that type of house, etc.)There are millions of things to consider. But the numbers have to work first and then consider the other factors second.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auWelcome to the forum. Good post to kick it off.
Some risk management strategies may include:
1. Income protection insurance.
2. Rental income insurance.
3. Fixing a proportion of debt.
4. Multiple income streams.
5. Diversifying location of IP’s (and type).Perhaps the best stop loss is probably the bank. They would not lend you $5.5 million unless you had a very good income stream from more than one source.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auI think that he’s the best presenter that I have ever had the pleasure of listening too.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Rob
To give you an idea.
Samll practice = $100 – $200
Medium practice = $200 – $350
Big 5 = $500+I don’t think individuals would need to pay anymore than $250.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Judith
You don’t necessarily have to have the full deposit. You may be able to negotiate with the vendor by putting down a small deposit and paying the rest at settlement.
However, there is nothing stopping you setting up a loan against your home now to allow you access to monies to pay a 10% deposit (this will also give you more bargaining power).
Using borrowed funds will obviously increase the interest costs (i.e. it will be 100% financed). You should take this into account when doing your numbers.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Diana
I’ll have a go…
If you are an Australian resident then you will have to include the taxable gain as assessable income (and pay tax at normal marginal rates). You will get a tax credit for any tax that you have paid in the UK.
If you are a non-resident then you will not have to pay CGT as the asset does not have a connection with Australia (i.e. the assets outside of Australia).
However, it’s important to check with an accountant as this is a complex area and there may be some tax planning opportunities.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Delight,
My pleasure. Investing is a team sport. If we can all help each other than that’s great. I wish you the best success with your investing.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auSome lenders use the existance of an ABN as support that you are actually self employed (especially when applying for low doc loans).
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Coslett
Yes, you will have to pay GST on commercial property. There is an exemption if the property is being sold as part of a going concern (i.e. purchase of a business).
GST is normally not payable on residential property.
If you will be borrowing the money to pay for the GST (i.e. financing 100%) then you should consider the cost of the finance when assessing the property.
The RE agent should tell you if GST applies. For a more reliable answer, ask your conveyancer.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auThere has been a couple of threads on these:
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=2190
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=1630
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=1462
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=1259
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Picja1
As I said, I didn’t mean to have a go at you personally.
I think that solutions need to make sense. Sure, anyone can borrow money it just comes down to interest rate. But sometimes it’s not reasonable and sensible to borrow additional funds.
If the numbers work assuming you are paying 8.5% (plus all the costs) then sure go for it. However, for most of us it’s hard enough to get the numbers to work paying 6%. I think that there are only limited situations where borrowing at high rates makes sense.
Sure you might be able to use super money from your DIY fund. However, if the ATO looks through the transaction (applies their substance over form test) and deems your fund is non-complying then your fund will be taxed at the highest marginal rate (and not 15%). That’s not even talking about the risks with lending monies to friends (even with a second mortgage).
I used to work at KPMG Superannuation Group. I know how complex the super legislation is and how often it changes. That’s why I don’t offer advice in their area. I leave it to the experts that work in the industry every day. There is no substitute for experience.
Picja1, well done for thinking creatively. I am all for that. However, maybe you need to consider the risks (or at least point them out) before suggesting solutions. Especially, when you don’t know how experienced the person to whom you are giving advice is.
Don’t get defensive. I am NOT having a got at you. I’m just making a suggestion.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auPicja1 – I’m going to have to disagree with you… in a big way!
Access superannuation? There are so many things wrong with this comment I don’t know where to begin.
Borrow 90%? The interest rate on this would be over 9% on a low doc basis.
Second mortgage – same thing – interest rate is too high.
My first comment to members of the forum is do not accept any financial advice from a mortgage broker… including me of course.
Picja1 – I think you have an ethical obligation to understand what you are suggesting before you put it in writing. From your comment I don’t think you do.
I am over speaking with clients that have followed other brokers advice and suffered. Sorry Picjal. I don’t mean to have a go at you personally.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Chris
Lenders consider anymore than 4 – 6 units in the same block/complex as a commercial interest and therefore will not finance these through normal residential products.
The bigger lenders will generally accept more units. E.g. NAB will sometimes do 6 (which is the highest).
If its assessed as commercial then the rates will be around 7.3% to 7.6%. Plus application fees with commercial may be higher. The maximum LVR is normally 70% – 75% (the higher the LVR the higher the interest rate).
Just a few things from a lending perspective to consider.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auRemember it’s only a “rule of thumb”. It was never meant to be an acid test. Any rule of thumb is a guide only.
If the numbers stack up then go for it.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auHi Melanie
quote:
Have own home worth $200K, loan of $100K. Want to buy new O/O home worth $300K and keep current home as rental. If you refinance current loan back to $180K and use extra $80K as deposit on own home then despite the old home now being a rental, you cannot claim the interest on the extra $80k on tax as it’s PURPOSE is for your new personal home loan . If you’d had the original loan on I/O and $80K accumulated in your offset account, hence you are only paying interest on $100K as per previous, then used the $80K to buy the new home then the full $180K loan on the first house is tax deductible.I don’t think I understand what you are saying. If the $80k in the offset is used for OO purposes then why would it be deductible?
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.auJust a couple of comments:
NAB will do up to 6 units on a residential mortgage (but this is on a case by case basis).
If you can’t get a lender to do it on a residential basis then a commercial loan is probably going to cost you around 7.5% p.a.
Cheers
Stu
Property & Finance News
at http://www.prosolution.com.au
