Sarah

Don’t worry too much. Maybe you could see if you can get out of the contract? If not, then you may have to wait for some growth to occur to gain equity. Keep saving at the same time.

In the long run, you will probably make more from this investment than a cheap positively geared property in an outback town.

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If the ppty is jointly owned, you can sell you half or buy the other person’s half. Possibly a trust is the better way to proceed.

Depending on the size of the capital gains (if they apply), you could also consider selling half to your trust now and half in a different financial year – it may save some tax.

Also be aware that if you claim one of these IPs as your PPOR now, then when you go to sell your current PPOR later, you cannot claim it as being your PPOR for the same period.

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Pulling 20% deposits from the LOC is a very good way to proceed.

But, it may also be an idea to pay cash using the LOC at first, and then to mortgage the property soon after. If you are getting a bargin, you may be able to borrow more money this way. This is because banks will only lend on the lesser of valuation or purchase price. When you already own the property, they so not have this constraint.

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Tony

You don’t need a pack. All the info is out there, if you want to spend time looking. Really, there is nothing much to a wrap. It is just selling a property where the owner pays you in installments. That’s it. However, owing a pack might be more convenient.

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Hi Skippy

There is a wealth of information available at: http://www.tenants.org.au (the tenants union of NSW).

I beleive if the tenant is more than 14 days behindi n their rent, then you can issue a notice to vacate. This must give them 14 more days to leave. You will also need to apply to the Consumer, Trader and Tenancy Tribunal to kick them out. This may not happen if they can argue their way around it.

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i’ve done 6 – 3 lease options and 3 installment contracts.

I wouldn’t do anymore. I have foudn the profit is too small for the hassle. It ties up your funds, and so you must take into account the opportunity costs.

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one of my banks did something similar.

Think of the good side, you have had that money in your hands for an extra 8 months!

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Plan the finance side as well. Suddenly giving up your day job can make it harder to qualify for finance.

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I would probably look at setting up a hybrid trust with one of you as trustee. Also, probably only one named beneficiary (because banks may ask for a guarrantee from the other named beneficiaries.

The hybrid may only cost $1200 or so to set up. You will be able to negative gear if needed, and also have the flexiblity in the future if needed – plus the asset protection issues.

I would never buy in personal names. But Thomas may be correct, since you’ve signed hte contract and the trust is not set up, it may be too late this time. Check this with your solicitor as it may vary from state to state.

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It could be very dangerous in doing your own lease – unless you are a lawyer.

You may get some important point wrong, or leave something out which could cost you dearly down the track.

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