I haven’t read the API article. But, the investor could have paid cash because it would be much easier to get the ball moving without a bank being invloved. He had the cash anyway. They could then contruct, or subdivide or whatever. Then when finished they could get finance on the final product on a much higher amount (hopefully), maybe even releasing all of the money they originally put into the deal.

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I agree with Derek, but would add, one disadvantage may be the fact your old home would be positve geared and so you will be paying extra tax on the rent received. Froma pure tax perspective, you would be better off staying put.

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Pagey

This is a difficlut question to answer. I generally feel it is a shame to sell since prices will rise and then you will have to buy back into the market again when you decide to invest. However if cashflow is hurting, selling and taking a small loss maybe a wise option.

Byronent is correct about transferring between spouses. In NSW this can be done without stamp duty (and without the need for divorce). One of my clients did this last year. If you transfer to your husband, then this may help alleviate some of the interest costs by him claiming it against his other income. CGT didn’t be an issue as it hasn’t increased.

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You would have to do the intiall course of approx 2-5 days to qualify as a real estate sales person. These costs up to around $500 usually. Once you get that you should be able to get a job under a licenced agent.

Then while working, it would be worthwhile studying the full licenced real estate agents course. After you complete this you can then go out and open your own agency. This course is about 3 months full time or of 1 day per week for one year. Or you can do the diploma at TAFE which is slower – 4 years.

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Sue

In NSW I beleive you must be registered with the office Deparment of Fair trading to be a buyers agent -under the Property, Stock and Business Agents Act (2002).To be registered you will need to have completed a real estate course or a buyers agents course – TAFE NSW now runs one. see:
http://www.oten.edu.au/oten/study/courses/CILS/coursedetails.cfm?CID=17337
cost is $1250

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O.S.S

How would you borrow the deposit? Against existing property you own? Then the trust could get the loan. But usually most people just borrow in their names and then lend to the trust at the same interest rate – so the trust can then claim the interest on this deposit (with a written agreement).

You would still probably need a hybrid to claim most of the benefits of negative gearing.

eg a $100,000 property with a 80% LVR. You borrow $20,000 and pay 6%. If you charged the trust 10% for this money, you would be making an extra 4% of $20,000 = $800 per year (and paying extra tax on this). The trust would then be claiming another $800/year as a cost = a large loss

I just realised I read your post incorrectly!

If you did it the other way as in your example, the ATO may disallow the deduction as you a deliberately making a loss. But even if it was ok, the deposit would have to be much larger for it to have any effect, but it possibly could work.

Terryw
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I beleive that is how it works!

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Hi Woodsman

I’ve had a few clients with similar situations, and was stuck in that they would not lend more than the contract price even tho this was less than 90%. It seems the mortgage insurers can be a bit inflexible at times, and it can depend on who is assessing the deal and how strong the client looks (my clients were not too strong!).

But good luck with it.

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Don’t worry too much. Randwick is a good suburb long term. You just have to get over the inital hurdles.

You couldn’t lock in a rate for more than 3 months. (the lock in fee is usually 0.15% of loan amount).

Usually 95% loans go to a max of $500,000, so you should be OK if this is the pp.

Most lenders will be able to do you unit, it just depends on what features you need. ANZ would be good as you could capitalise the LMI (ie add it on the loan, not having to come up with the $13,000 or so extra it will cost you!).

The good ones don’t stay very!

Terryw
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Dave

I did the same thing!

Terryw
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