Hi Fudge

Mortgage insurers will have to approve all loans over 80%. And they have area restictions, ie only capital cities and major regioanl centres will be accepted. Your $50,000 property is probably not in one of these areas (send me some postcodes to check), so you may need at least 20% deposit.

If you are permanent part time for at least 6 months, you should be OK. if it is just casual, you may have some problems. It would help if youhave been there for 2 years and show consistant income. Maybe they could change you to part time if that was the case.

Terryw
Discover Home Loans
North Sydney
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Guys

A couple of years ago, I started an email discussion group about investing in Japan. It ended up dying off, and got flooded with spam. But it was a good way for people to stay in contact and discuss investing relating to Japan.

Would you be interested if I started another group?

Terryw
Discover Home Loans
North Sydney
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For something like this you would probably have to put up at least a 30% deposit, this will reduce your COC return a fair bit. Another problem is for the wrappee getting finance to cash you out. they will also need at least 30% equity. It may be better to let this one slide and concentrate on the easy deals (my opinion only).

Terryw
Discover Home Loans
North Sydney
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Yes, the trust will have to pay tax on the income received as rent, but I think the idea is to have the property negatively geared, so the trust actually makes a loss. This loss cannot be distributed, but could be offset by other income of the trust.

The trouble is the trust must charge you market rents, so over time, the property will become positively geared so the trust will then have the problem of distributing this income. So you could end up paying tax on your own home. Maybe this could be offset by distributing to low income beneficiaries or the trust buying further negatively geared property.

And as Rod said, you will lose your PPOR CGT exemption and the trust will also have to pay land tax.

It may be a good idea, if you are thinking of living there for only a few years, and then moving on.

Terryw
Discover Home Loans
North Sydney
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This doesn’t sound right. Non recourse funding is where the lender lends to the company with only the property as secuirty and no directors guarrantees. I hanve’t found any lender that will do this. All want directors guarrantees.

I think he may have meant you are the person finding hte properties, whcih you put to your JV partners who then apply for the loan. In effect you will have unlimited finance because the JV people are the ones getting the loans in their names. You then have an agreement with them behind the scences.

Terryw
Discover Home Loans
North Sydney
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Sounds like good advice! You wouldn;t won the company, the trust would. Also any profit will be directed to the trust, from there you can distribute it to a wide variet of beneficiaries. Now you don’t have that choice.

Terryw
Discover Home Loans
North Sydney
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What happens is, if you apply for finance, an entry is made on your credit file. This entry doesn’t say anyyhing about whether you went ahead or were declined. It just indicates the date, the amount and the bank. If you aply for a loan and the bank sees a few recent enquiries, they may ask whether you went ahead or not. Some banks will reject you outright based on the number of enquiries, and it doesn’t look good anyway ,so it is best to limit the number of enquires. It makes you look desparate if you have too many.

On the income you have listed, you could possibly borrow up to about $300,000, assuming a 4% rental yield on the purchase price.

Terryw
Discover Home Loans
North Sydney
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Do you think it is still expensive?

My family owns a townhouse type (like half a duplex) property in Suita, just 15 min from the centre of Osaka. My grandmother in law bought it in 1943 for about 2,000,000 yen. it is now worth about 10,000,000 yen (about $140,000). Not very expensive, as my guess was initially about $500,000. It is in need of some renovation, and would rent for about 50,000 yen per month as is. There a re lot of new apartments popping up, so not too much demand for these old houses.

i don’t think it is hard to invest or buy property in Japan as a foreigner. But it is very hard to get a loan-even for citizens. probably because of all the bad loans that the banks experienced in the 90s.

Terryw
Discover Home Loans
North Sydney
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Yes, I agree too. Don’t do it!

Terryw
Discover Home Loans
North Sydney
[email protected]

Some banks actually ask about HECS debt and take it ito consideration, because you will be paying less tax. But if you don’t tell them about it, there is no way they will ever know about it.

You used to get a discount if you paid lump sums off your HECS. I paid mine off this way, but it might be better to pay via the tax system. It could be better to use the money for deposits instead.

Terryw
Discover Home Loans
North Sydney
[email protected]