Forum Replies Created
Wilko.
I have gone back to my PM mentioning that i was never informed that my tenant was DHA and that this clause was included.
Lets see what she comes back with, dont think its a major issue but i just need to make sure that i am comfortable with this PM as i have only had the property for about 8 months
OK.
So my PM has come back to me, apparently this property is through DHA (i knew the tenant was in the army but did not know it was DHA)
The DHA has a clause in the rental agreement stating that if the person needs to be relocated they can break the contract with 1 months notice.
The one month is up on the 11th Dec, so my PM is putting the unit back on the rental records to look for new tenants
Im going to have a look at the rental contract when i get home because i dont remember seeing the clause that she sent me from DHA.
She also mentioned that there will be a 1 week rent + GST to find a new tenant plus $33 for signing of the lease.
Im not really over the moon about this one but the tenant has been good (he has barely been home actually) and hopefully i can up the rent to cover this loss.
Suggestions for going back to the PM regarding this?
Hey guys.
Yes it is in NSW.
Ill go back to my PM and see if they can provide a bit more information regarding this new act.
I have also requested to see what happens next , hopefully there wont be any out of pocket expenses/lost income.
Ill keep the post updated.
Cheers,
LUke
Thanks for the comments so far guys.
Shahin, what CGT implications would it have if was purchased as an IP, then used as PPOR and then later on down the track back to an IP?
Jamie, im glad to hear your comments about the Inner West, i was bit scared that if i did go down that track it would be minimal.
I could always keep an eye out for units that could have future renovation potential (kitchen, bathrooms etc)
Luke
Hi guys.
Today i changed both of my loans to IO.
I will be using the MISA/Offset account with the Variable account.
Thanks for all your help,
Luke
Thanks Jamie.
So:
Variable IO Loan – $152,000
-Offset attached
Fixed IO Loan – $152,000
Currently my monthly repayments are $1703.
If i move to IO and put all i have into the Variable Offset, my repayments should drop down to about $1160/month.
Then, this extra $500 will be put into the Variable Offset, aswell as any other spare cash i make.
Over time i will be reducing my monthly repayments as i add more into the Offset.
Pretty much the money that usually goes towards the principle will go into the offset so the money is more liquid in the offset rather than using a redraw facility.
Does this sounds like i have it under control?
Thanks,
Luke
Hi Jamie & Terry.
Last night i thought to myself:
"How do you build equity in a property if it is IO"
Say in 10 years time i am still IO, i will still owe the whole amount of the purchase price and would have paid all this interest (holding costs)
Say for example i have 3 IP's that are all IO.
I wouldnt actually have any equity in them apart from my 10% deposit.
Is there something that i am missing?
Thanks,
Luke
Hi Jotham.
Thanks for that detailed explanation above.
I will be using the offset facility as i will have another transaction account/credit card that i will use for my day to day expenses.
But thanks for raising some of the issues of a redraw account
Thanks again guys.
So if i move to interest only this will be positively geared (it will put about $100/month in my pocket after all expenses, BEFORE tax) with my current offset amount
Before i ring my bank up and get them to switch it over to IO, is there anything that i need to be worried about.
I will be constantly topping up the offset account so no worries there, anything else i should consider before making the switch?
Thanks,
Luke
Thanks Jamie & Terry.
How will this affect my borrowing capacity though since it would mean i have a large amount of debt?
Thanks Jamie.
So when would an investor pay off the principle?
And im assuming this method would be best when the property gains capital growth, otherwise you wont have any equity within the loan/
Luke
Thanks for that Jamie.
I do plan on buying a PPOR one day down the track (not too sure when though)
I am a fairly good saver so i will be putting a fair amount of money into the offset account
If i do move to an interest only loan, how long do people usually have the interest only period for?
And since i have a split loan, is there such a thing as a fixed loan interst only?
Thanks,
Luke
No, i still live at home with my parents so do not have any other debts
Hi scha9799.
I guess at the moment my goal is to build equity so i can use that equity in the future for more IP’s or a PPOR.
I would really prefer a positive or neutral cash flow IP to start with so i can accumulate as much cash as possible for deposits to other IP’s
