Forum Replies Created
Is that the loan that was in the Advertiser a few weeks back where the banks let a portion of the loan be interest free, but claim a percentage of the capital gains upon sale?? I think we all know who the real winners will be with this one.
Thanks for that Amanda, I didn't realise that so much can be depreciated. Thats great news.
Cheers
Tim
I have learnt the hard (well not really hard in the scheme of things but still very annoying!!) way about the pitfalls of xcollaterising.
Basically when we first started this property investing game a few years back when i was young and naieve we used our PPOR as security to buy our first IP. Few years later we had moved out of our PPOR and after renting it out for a while we sold it. However on the day before settlement we received the distribution of funds form from the conveyancer and low and behold the bank had taken an extra $15k to ‘pay down’ the other IP loan that our PPOR was used as security for, so that the LVR was to their liking (Regardless of the fact the place was now worth much more and they were working out the amount they took on the original purchase price).
Basically we didn’t lose any money out of it, but we were lucky that we made enough money out of the sale to cover all costs etc and leave a bit in our kitty for future plans. But as said previously in this thread, it was very disappointing to get the bums steer from our mortgage broker and to not have the potential outcomes explained to us.
Hope my story made sense. Just don’t do it!!!!
Hi all
My wife and I rent a modest 3 bed townhouse whilst we own 2 IPs (1 on market at mo). Our idea is that eventually we want to go back to owning/paying off our PPOR but for now we needed as much cash as possible to fulfil our investing goals. So the relatively hefty mortgage payments have been halved by replacing them with rent.
I too read Rich dad poor dad a year or 2 ago and thats pretty much why we decided to go this way.
Cheers
Tim
Thanks for all your replies!!! yes it is her passion and as her current job doesn’t provide the job satisfaction she would like, we thought we would look into making our hobby a bit more permanant.
It would also help out with our kiddies as well with more working from home etc etc. funnily enough it was me who got us into this real estate game and i thought it would be her trying to put the brakes on my runaway imagination, not the other way round!!! [biggrin]
We probably could live off the one wage, it would help the old child care fees too!!
The one thing i am desperately trying to avoid is going into any sort of permanant investing arrangement with a half arsed preperation and no research. Had a look at the ATO business site last night and its a great read if you are looking at having a great nights sleep!!
Thanks for all your help!!!!
Tim
sorry forgot to add…..surely their is a better way to fund each new purchase than applying for brand new loan each time….the set up fees would be enormous and severely eat into any profit. What is the best way to set up the finances in this sort of scenario??
Cheers
what r everyone’s thoughts on front fences??? we have a waist high, steel mesh type fence that looks like the old housing trust style front fencing but it has wooden log poles every few metres….its probably more practical than pretty but not sure if we get rid of it that people may miss having a barrier between the road and the house..it also has waist high gates that cover the driveway entrance (its not a main road, just a normal back street so small traffic flow)
Cheers
Tim
Just bribe someone from the department of motor registration to get the full name and address….hehe [biggrin]
Some great ideas there!!! We were umming and aahhhing whether or not to paint the concrete, oil stained driveway but think we wil do it…Love the idea re planter boxes too, they look great
we had a tenant once whose rent came straight out of his centrelink pay….altho we never had any dramas with him and paying rent, from talking to our property manager it isnt as good as it sounds as the tenant can just call centrelink and cancel the direct debit (as mentioned in above post) without telling anyone…kind of takes the point away from it really if they can just do that.
Cheers
Tim
We got a quote from a place here in SA that was $1700 for 1st month for fully furnished 3 bed house…included lots of little deisigner stuff and they come and set up, do the design thing and take the stuff away….we were going to put in some of our bits of oldish furniture and just hire a few bits here and there but it worked out that by the time we hired a couple of beds and a few other bits and pieces, then it wasnt going to cost too much more for them to do the whole hog (plus they hav much nicer furniture)…but this is first time we wil b hiring furniture and i must say i am a little anxious to spend almost $2k on hiring furniture to sell but they do make the places look bloody nice.
Hi Dave
I have a pretty substantial Development checklist I can email thru to you if you like…I got it from a really good book I read and whacked it on a spreadsheet….PM me if you would like a copy.
Cheers
Tim
Hi Chris
Yeah mate if it doesnt cost you anything at all to keep it monitored (i.e taking into account discount from insurance) then keep it going. I always get really angry at insurance companies whenever I get an insurance policy as they always ask if the place has a monitored alarm because they are useless. Just a couple of questions that you could ask the alarm co to critique their authenticity and credibility:
– Ask them if they are an AUTHORISED alarm company with the Police Communications centre. The monitoring company has to pass strict eligibility criteria to be put onto a list of alarm companies that Police patrols will attend too, otherwise no matter what type of alarm activation it is they wont get any police help. Soooo many dodgy backyard monitoring centres try and put alarms through, i feel very sorry for their clients and wonder what they are told by the company.
– Ask them if a private security patrol will be tasked if the alarm goes off.
– They may state that police will be called when the alarm goes off, ask them if they are aware that the police will only attend if the alarm sensors are activated in multiple ROOMS only, not 2 sensors in the same room. Some companies will state to their clients that police will be called if the alarm goes off under any circumstances, but they know full well that no police patrol will attend. However they will ring up Police and state that they just wanted to have a phone record that they did in fact call the police just so they can handball the blame to the police, if the customer wonders why no patrol showed up.
The best alarm company story i have is a company that wasnt authorised and when they were told that no police patrol would be attending (they ring thru on an alarm co hotline), they then rang 000 and tried to put the job thru that way…needless to say they got a little bit in trouble.
After all that mate I highly recommend alarms for commercial premises as they actually are legitimate a lot of the time, just not residential.
Cheers and good luck!
Tim
Hi all
I deal with alarms a lot in my line of work and for private premises i advise every single person that deals with them that they are quite possibly the biggest con since moses was a boy. Alarm monitoring companies are extremely dodgy and will do anything to get people hooked on ‘monitored’ contracts etc….please dont….in 6yrs in my current posisiton dealing with alarms on a daily basis, i have NEVER had an alarm on a residential premises that has turned out to be legitimate (and i deal with approx 50 per day..over 6yrs…u do the sums) it always turns out to be a codepad error, a cat , bug, moth, window left open etc etc etc….due to every single alarm on a house being false, the police have very strict guidelines on when they will attend and alarm companies will never disclose this to their clients. In terms of adding value to a property, whack a ‘monitored alarm’ sticker on the front window of the house, it will be just as effective as a fully installed monitored system.
I in no way mean to sound harsh at all but i see every day at work how much of a waste of money house alarms are and i hate seeing people conned.
Cheers
Tim
Hi mate
We just took our plans to builders in the area and basically said ‘how much to build this’ and then we got detailed quotes based on their inclusions etc. After that we just thrashed out a deal that cut out stuff in the quote we didnt need to come to an ending we were happy with. Must admit it helped a bloody lot that my father in law is a builder and he drew up architect-quality plans for us.
Cheers
Tim
Hi all
There are heaps of these stories floating around but you do have to be a bit wary of the source of the news as quite a few of them are a load of bollocks…
case in point….old lady apparently sued Winnebago (big caravan with an engine things) because she put the van in cruise control mode, got out of the driver seat and went out the back to cook lunch. Surprisingly the van flew off the road into the bushes. Story said she won millions because she wasnt told by the company that cruise control wasnt an auto pilot and now they include ‘cruise control will not drive your car for you’ (or something like that), in the van manuals. The story turned out to be total bollocks. There is a website floating around i heard of that just refutes all these urban myth law stories. Some are bloody funny tho.
Cheers
Tim
Hi mate
I am definately no mortgage broker etc but if it helps at all I found out (and was confirmed by my broker) that possibly during the developments construction phase, the interest can be carried over til when the structure is complete (i.e u dont pay any of the installment payments during construction, just all payments u would have made goes onto loan total at the end). From what I have found out the LVR needs to be pretty favourable once the total interest payable is tacked on the end of the loan before the lender will touch it.
This sort of tactic might help you pay for the construction while there is no income coming in from the units (either rent or sale profit)
Not sure if my advice is even what you are after but can’t hurt to let you know i guess.
Cheers
Tim
G’day guys
Well I thought I was young til i read some of the other replies!!! I am 24 and have had 2 IPs for a couple of years now. My wife and I are currently in the process of selling one of them to free up some cash flow to help me not freak out too much as we embark on our 1st 3 unit build when we knock down our other IP. Building should start later this year sometime if all goes well with the sale of the other place.
Simply we both have reasonably well paid jobs by SA standards and I guess our main sacrifices to date have been to rent a smallish 3 bedroom unit to free up money to fund our investment ideas. I would say the main reason we got started is that we have a passion for property, we love spending days going to display homes, open inspections etc just to look at whats going on in different areas and see what other people are doing. You can have all the money in the world for a deposit but if you don’t have the passion I doubt you will get very far.
Cheers
Tim
Mate just a quick question re government payments for studying…do they still pay if you work full time???
I am a complete building numpty and would like to have some sort of clue what my father in law (who is a builder) is on about half the time. TAFE course sounds like a great way to go about it.
Cheers
Tim
Hi Guys
Best book by a mile on property developing that i have read(residential developing that is) would be ‘Australian Residential Property Development’ by Ron Forlee….Its only been out for a few months and I havent seen it in too many shops but its fantastic. Goes into all the nuts and bolts stuff, gives websites for all the external contractor-type people that you will need to research, goes into possible floor plans and all sorts of stuff like that.
I think he had an earlier book called the intelligent guide to property developing or something like that but i am pretty sure it also relates to commercial developing which isnt my thing.
Cheers
Tim
