Forum Replies Created
- bugeye23 wrote:The angle i'm coming from here is I don't want to sell my property in the near future but want to see if the banks would recognise the value difference in my property with a income producing asset added to my PPOR? Because what the bank values my house at and what the market would pay for it are 2 different things..
Hi Bugeye – the short answer is no. As valuations go on comparable sales data, which of course will depend on houses in the locality that have sold that are 'similar' and both have or have not got this addition of solar panels, it will make minimal if any difference to a valuation.
I have seen the most environmentally built houses that owners think are worth three times what they really are just for the way they have done them (nice to if you like that style) but essentially a 3 bedroom 2 bathroom house on 2 acres with a lock up shed in Bouganville will be worth $XYZ with a slight variation depending on date build, street appeal, condition etc rather than solar panels.GO for it though if the actual sums add up for you to save money!
Cheers
thecrest wrote:It's amazing what the Council can do if they want to. ……………. I said I'd shoot the first council demolition man to set foot in my home, so they offered me a compromise……….. Cheers thecrestAh Crest…absolutely brilliant! Love your style – made me laugh out loud – ridiculous 'change of heart (?) by the council but.
Cheers
HI all,
Just a couple of points re Jac's post – the special trust accounts that agents have to use for deposits do not pay interest to the agent – and the reason they like the higher amounts is more often than not so they can get the commission amounts 'released early' not for interest.
And if your bank (or if you broker tells you this) takes 5 weeks to give you a loan approval answer you are doing the wrong thing and borrowing from the wrong place. Obviously you need to allow for contingencies and glitches and Murphys law – but 20 days at the outside for unconditional approavl should clinch it – assuming you have provided ALL the documentation required, and your solicitor has been useful.
I have just approved unconditionally a SMSF deal to formal offer stage in two weeks, so if that can be done…….you get the picture.
All the best with whatever you purchase though Kat,Cheers
Without straying off the track too much, a few of the comments remind me of a time I lost out on an $88k property, by haggling over a few grand, and having $84k as my final offer, and the owner coming back and wanting $85k as a compromise.
Other issues arose at the time, but 4 years later that type of place was worth around $180 – $190k….so learnt a lesson there.
And to put things in perspective, if anyone is interested in researching rather than being told, go to one of the banks on line mortgage calculators, and work out as an example, say a $215k loan over 30 years at 7%. Now up it to $225k and see the difference in the repayment – kind of puts things in perspective does'nt it. If it is good value, and you want it, a few grand is nothing in the scheme of things. You can save more shopping for a good rate, or making sure your rental income is appropraite for the area.All the best with your next one!
Cheers
Hi Jademao,
Looks good, except for the 2 weeks letting fee. If you could get this reduced to one you would have a great deal if they are a good agent.
Cheers
Hi Ediot,
These guys, Pittard, are the offshoot (lovechild?) of what used to be a 'jenman agent', which was started by Neil Jenman, and then on sold.
They do seem to offer good pay structures, unlike some of the commission only agents, but of course you do have to do the training and eat meanwhile. I think some of their roles are door to door canvassing, and phone cold calling, but when you look at the website, there does seem to be a few options.
A lot of it would come down to who (or if there is one) is a Pittard agent in your area. I guess there would be plenty of worse ways to enter the R/E industry.
Just make sure that as they ask for plenty of details from you, get plenty from them also. If you can earn $75k pa on a wage as they advertise, you won't find many other agents where you can do this that's for sure, so may be worth putting in a bit of effort perhaps.
All the best with whatever you decide,Cheers
Hi Badlee – welcome to the forum too.
No problems at all. The simple rule to remember is you can borrow against any property you like regardless of whether it is your investment property/ies or your PPOR/family home. It is what you use the money for that determines whether it is tax deductable or not.
This means you simply must keep your borrowings seperate as a new loan, or if your properties are cross secured (both properties secure both loans) you could just increase the size of your loan against your family home.Here's an example.
INVESTMENT PROPERTY worth $500k, with LOAN for $200k. (we'll call LOAN ONE)
YOUR HOME worth $300k with LOAN for $240k (we'll call LOAN TWO)
There is not really enough equity in your home to borrow against for rennos, so you
take out a loan for $100k against your investment property (We'll call LOAN THREE)Now, LOAN ONE is the only one that will be tax deductible, and would typically be set up as an Interest Only loan facility.
The other two loans, would not be tax deductible and typically be Principal and Interest.Even if you dont anticipate a heap of savings, always a good idea to have an offset account (savings/transaction) attached to your home loan, unless of course the lender charges you a fee for it and it is unlikely you would have more than a couple of grand in it at anytime.
Hope that helps.
Cheers
Hi Jazz,
The reason LMI applies on loans over 80% LVR, is because 80% of the property purchase price is considered the acceptable risk for a lender to be able to sell the property at, and recoup the loan. Any higher is simply put, too risky to assume a sale within a reasonable time frame.
You will also find that by the time a property goes to mortgagee sale, it has been many months, if not years since the bank or lender (non banks or credit unions are much more ruthless than the banks trying to get their money back) has received any repayments at all from the borrower, and interest has been capitalising this whole time.
The bank or lender will obviously meet the market eventually as you suggest, btu cannot give it away.
How LMI works, but only if the original purchaser/borrower did borrow more then 80% of the property funds (which if they did not, their is no LMI in the case of most banks, but there is for the majority of non bank lenders…..maybe you can find out the mortgagee?) is that the LMI company will then pay the lender the difference between the loan remaining and the sale price – THEN the LMI company pursues the borrower for payment afterwards. Interestingly, if they can get an installment plan they dont charge any interest, but just want to get the money back at some stage.
It may be a case of the property has simply gone down, and the mortgagor had 'negative equity'.
I had a person today tell me their place is worth $525, he bought it early 2010 for $495k, and valuer reckons its worth $430-$440k based on recent sales. His loan is around $400k still so you can see how things can get messy.
All the best with the proposed purchase. Make a written offer to the real estate agent….they have to pass it on and it will definately be considered by the lenders recovery operations area.Cheers
Cheers
Hi Old china. Are you talking Freehold or Leasehold?
Cheers
Hi Andrew,
Highly recommended to use the solicitor or conveyancer from the state you buy in, as well as cheaper. If you decide to use one you know or use already, they will only end up subbing the task out to someone in the state you buy in, and then add their cut.
Cheers
Derek wrote:in effect, interest rates only have an immediate impact on 30% of the population. Clearly there is some psychological impact even on those without home mortgages.Not saying it is easy, palatable etc but sometimes I wonder if GST manipulation would be a better economic lever.
Of course this then brings into question farienss of distribution, trust, management of variations at the till etc but I think it could be done.
Whether it will is an entirely different matter.
Always been a grip of mine too……interest rate manipulation whether by lenders (and they all do this…..including credit unions and the Bendigo Bank!!) or the reserve bank does effect primarily only those with mortgage/s. A dual income renting couple could not care less, or most renters. THe best way to effect spending either way would be better served by actually increasing income tax (or GST as you mention) but can you imagine the noise if that was changed……seems to be less pushback from increase of interest rates only……..and by the time they are raised (or lowered) enough to effect things the damage is done and they have to go back the other way. Oh boy do I remember 2007-2009 so well……
Hi Paulie,
While you can have either individaul trustees or a corporate trustee for the SMSF, you would always have a corporate trsutee for the security or bare trust. As mentioned, you would normally only form the bare trust once you are 'ready to go' with the loan and property, and one other trap to beware of is that the SMSF has to pay the actual deposit on the property…..you can't pay it yourslef and 'reimburese' back from the fund later.
Cheers
Hi wilko,
As mentioned, you will find YES to be the resounding answer from most if not all here.
Take a step back and look at your options…….managed funds? Direct shares? Likely if you are very clever or lucky you may find the share option works but 'bricks 'n mortar; is a winner hands down in my opinion – and as long as you allow for the highish entry (thanks to stamp duty / govt tax) and exit costs you will do well if you buy with a little research, don't speculate too much, and mitigate your risks – including (no exceptions!!!) landlord insurance, and a good property manager.
People don't make money from saving $50 per week from their income.
The only ways you can make a 'lump sum' of profit and money are below:-
1. Capital gain on the sale of Real Estate
2. Capital gain on the sale of shares (similar to the next point)
3. Winning the lotto
4. A gift or inheritance, usually after someones death.
5. Buying and Selling lots of little things at a profit (art, vehicles, misc crud)
6. Stealing.So……what do you thing? Yep Real Estate is a winner
All the best with your journey
Cheers
Hi Morgstar,
Some of these expenses occur whether buying in an SMSF or not (ie inspections solicitor etc)
Generally, you may find $100k as the min loan size, you will need around a 30% deposit, and allow around $2500 in fees from the lender – it's mainly legals and certainly no different to legal fees in general. I would normally suggest around the same again for the set up of everything with your accountant including the two trusts, but as you mention you already have the SMSF set up so you are half way there.
Some places charge a fortune for set up and annual audits, that make any bank charges some have mentioned (maybe they work for nothing??) pale into insignificance so it pays to shop around.
If it helps, for assessment purposes it is generally preferred that the proposed rental income and your historical super contributions, or employer SG g't ee contributions are enough to service the loan repayments.
And nothing wrong with squeezing into a cheaper property if that's all you can get with your balance in the fund……beats the hell out of 'Fund Managers' 'looking after' your money.All the best with your future investing.
Cheers
Sorry – forgot to add, that while as others have said, the answer is essentially 'no', it is the bank that is the lender, and the broker is just that -a broker……banks appreciate that a large % of new business comes via the broker channel, which means that if a broker has a better relationship with a certain lender than another broker; perhaps they have established a really good working relationship; it may just be the difference between getting your loan approved or not as already mentioned, when the guy/girl goes in to bat for you. Can make a difference….I've seen it.
Cheers
$10,000 for a mentoring program? Boy the word mentor is bantered around a lot nowadays. So, what are you getting for the $10k course/training? One on one I would assume?
Cheers
Rams? They will try and sell you their own product before 'broking' you anything else, but in answer to your question, make sure you have comfortable joggers or shoes, and plenty of water before….running!
Cheers
Just an additional thought with fixing rates that you need to be aware of, and I must admit has been a gripe of mine for a while. You may do the shrewd thing, hedge your bets, and fix your rates for a year or two, BUT what you need to remember is tha in most cases you rate will revert to the standard variable rate afterwards – not any discounted rate you may have negotiated or have.
SUre you can renegotiate your loan after wards, and 'switch' (no charge with good banks) but the issue is that hypothetically say you circumstances have changed family or employment wise, you may not actually qualify for the same loan again, and in essense be stuck on a standard variable rate loan for years………which could well and truly take the shine of the year or two savings you have made earlier. All about planning ahead.CHeers
Hi W8up,
As you mention, it is critical you don't 'cross contaminate' .
As you mention, either split accordingly and keep totally separate or you could keep one, use it for personal, clear it completely, and then start fresh again from a $0 balance and it will then become your 'investment' LOC.Cheers
yup…..I feel your pain.
A few years back I went to the Dale Beumont 'Secrets of Property Millionarires' one day conference, because as it had a star studded line up, and speakers that had a diverse range of backgrounds and techniques, I thought it would have to be pretty good.
Much the same as I have heard from yours and most others….it is just a 'teaser'. From the 1st talk onw, at the end of each person they said something like ' and the first 300 people here (I think there was only 250!!!) who identify themsleves at the counter in the foyer, can receives my special (insert topic etc blah blah) home study CD program that is worth $15,000, reduced to just $5000, and for today only a red hot $2999. There was positively a stampede on each occasion.
I went home feeling similar to yourself, and in all honesty wondering how many people sign up for 'BOot Camps' at $7999 'today only' and come away with anything either?That's my 1sr and last seminar Booge!
Cheers
