Forum Replies Created
Ah now Mopsy, don’t put me on the spot now……[biggrin] I guess if you can’t stop looking at property it’s the build or buy option. As far as how you have managed and achieved what you have so far, the wait and see option would’nt be doing you justice I don’t think. Have you developed or built before? If not maybe the buy option…..I think you know what you are going to do already, but just looking at the finance thing, your 365k property looks like the perfect one to perhaps refinance to 80% LVR, and have the equity sitting in a line of credit type account to be used purely for investment purposes only, which you can use to fund deposits on a few other properties…..that should keep you busy looking at property for a while!. And purely my personal opinion, I think you are spot on in that if you are happy with your exisiting home, why get further into debt for something you don’t need (or want) . And maybe you should give your current lender a break for this one, and get the loan refinance and subsequent other loans elswhere. The more you say about your new banker, the more it frightens me – All the best with your journey, and make sure you let us know how you go/what you do mopsyblossum. [strum]
Guess I’m too late, but apart from agreeing with foundation 100% (can you imagine even worse, trying to sweep rubbish out of the grooves in barefeet??? [upsidedown] ) I would have suggested using a T-nailer to fasten the decking – looksa heap tidier and works fine. ….and cost less to boot. Linseed oil works well if you want to bring out the timbers natural lustre, but don’t put it on too thick to start with (or in fact any oil or stain) as it takes too long to dry, and can go ‘a bit funny’. By now, you’re probably on your third beer looking at the finished product………[strum]
Hi mitresquare – and welcome to the forum! To answer your questions, as far as borrowing more to invest, a lot would depend on how much you owe on your current mortgage, as you may have some equity (extra funds you have paid in or increase in property value, or both) to help out. You could possibly buy a cheaper property somewhere using your inherited money as the deposit, but that being said, it really comes down how much of a loan you can ‘service’, based on your income and liabilities…..the two things that ‘kill’ servicability for all but high income earners are – you guessed it, personal loans and credit cards with high balances/limits. Seeing you pay much higher interest on these than on a house loan, and a lot more than your property will return short term, it may indeed make better sense to use this money to pay out your personal loans and debt, and then you will be in a great position to both borrow for another property, and also work hard to save up the deposit. Just a thought…..all the best. [strum]
Hi, and congratulations on a nice portfolio. Just a couple of general comments…..1) You need to talk to a more experienced mortgage broker or lender. Don’t get me wrong, everyone has to learn, but a broker who has not had a lot of experience with investment loans/larger portfolios is not the right person for the job in your case. 2) Unless you plan on selling a lot of your property, having them share security is not the end of the world, but honestly, with your excellent LVR, it certainly would be a good idea to try and get what properties you can ‘standing alone’, and not being cross secured, or collatorised. This would make new acquisitions a heap easier, as having that many properties securing each other would be an absolute nightmare…..As long as you can service the loans or refinancing, with your amount of equity you should be able to get nearly all of your property out of this cross secured position. 3) Tell your personal banker he is a ……..ah skip that bit. All the best with your expanding property! [strum]
Hi there. For my 14cents worth, for what it’s worth, after having moved from an almost South facing house on the NSW South Coast, to a North facing one, it is ‘chalk and cheese’. So much nicer in the mornings, and of course the main living areas are usually cooler during the day. Used to wonder what all the fuss was about myself but I now know why. All the best, [strum]
Hi. I use POSH as well, and am quite happy with it other than a few minor things. Use it to keep track of expenses/income, and then to me a P&L each year. Just last night I got around to making up a depreciation schedule in the program, which I did the hard way last year with a ‘home made; excell spreadsheet, and man is it a snack. …should have done it last year. Anyway, all the best.[strum]
Hi. I use POSH as well, and am quite happy with it other than a few minor things. Use it to keep track of expenses/income, and then to me a P&L each year. Just last night I got around to making up a depreciation schedule in the program, which I did the hard way last year with a ‘home made; excell spreadsheet, and man is it a snack. …should have done it last year. Anyway, all the best.[strum]
Hi ben/jodie, and welcome to the forum. In all fairness, from reading your post you sound like you have almost answered your own question! [biggrin] Many will advocate never selling your property, which is great if you can do that, but in all fairness you will not actually enjoy the real gains until the money is in the bank, or you choose to refinance the properties to access it that way – which again can cause problems if you are unable to service the loan. The money you make selling your own home will be yours ‘tax free’ if you have never used it as an investment property, and if you feel the market has ‘peaked’ you are in a great position to sell one, or both, and ‘follow your dream’, and own half of your new home ….almost….. If you do not need the funds immediately keeping your one IP may be a good idea, but obviously it depends on your long term goals and financial position. Using your own place of residence to make a profit at resale time is one of the few things in Australia we are ‘allowed’ to do to build wealth without getting taxed to the eyeballs, so you are in a good position guys. Whatever you choose to do, all the best with the move eh? [strum]
Yup, watched it the other night, and it is indeed great info for new and old investors alike. Margaret would have to be one of the most ‘practical’ down to earth investors (I won’t use the guru word) there is, and her methods have obviously worked for her and many others. Definately worth a watch, especially for newer investors, or people that are a bit unsure of ‘where to next’. Her books, especially the latest ‘The Truth about Positive Cashflow Property’ are excellent too. All the best all……[strum]
Hi, and welcome to the forum. You could start by sharing it with me. No? Ok, a lot will depend on what you want to achieve and your goals. Did you want to put it all into real estate or some into shares and or managed funds? Were you looking for income now, or are you thinking ‘long term’. Is the 300K ‘yours outright’ or is it equity in existing property? If you have allocated this amount just to invest in real estate (and why not?), you could buy one or two properties outright, or you could use it to fund quite a few deposits on cheaper good yielding properties. Trying to keep your deposits to 20% is great if you can do it, but using a 5 or 10 % deposit puts you in a pretty good position to control a fair bit of property, if you can service the loans (with rental included of course as income) It really comes down to what you have in mind. No one can tell you what you should do, but with a bit more infor you will find plenty of people on the forum will give you food for thought. [aacool]All the best with your journey.[strum]
Hi Breakeven. The fact that you mention LOC and tax in the one sentence, and that your lender has pointed this out, I assume you are borrowing for investment or business purposes? A LOC is generally used when refinancing to release equity in your home, and is often best when part of a split loan. (ie $400 k house, loan for $200k, refinancethe 200k, and add on borrowings of another 100k, which could be split into 50k LOC, and leave the other 50k ‘in redraw’ with the rest of the loan. ) You would normally use the LOC for investment purposes, such as deposits on investment properties, shares, rates etc and then in turn have your rental income etc going into this. The idea that your personal and business/investment parts of the loan are kept seperate, so at tx time you have a seperate statement for your LOC – with interest as tax deductable, which of course it is not on your own home. The idea being any extra repayments go into the principle and interest part of the loan, with the LOC being interest only. You would access the redraw in the other part of the loan for your personal use, holidays, buy a new car, whatever etc. As mentioned already though, in virtually every other scenario, using the offset account, even free redraw on the main loan is the more popular/cheaper option, and if you are simply just buying your own home, can’t for the life of me work out why you would need an LOC at this point. Personal opinion only of course[biggrin]
Hope it all went well.[strum]Hi Louis, and welcome to the forum. Good on you for doing some research. Unless it is painfully obvious a place is going backwards, asking people like you mentioned a direct question like that would be unlikely to get much else for an answer as you said. Perhaps you could see how the house median prices have been over the last few years. If enough are selling this is a good start. The aust beareu of statistics, although not yet right up to date may show some helpful info, as well as recent property sales prices, and it should not be too hard to track down the current unemployment figure – even via centrelink. Does the council have a website? most do, and will show any planned spending, growth forcasts, budgets etc. Is there much industry, infrastucture there, or is it reliant on farming only. Many vacant shops? Shoud give you a good idea. You could post the name of the place, or if you do not wish to, perhaps the region, and others may have some investing experience there already. If not, API magazine often tackles updates on regions in each state, and of course, if you want to spend a few dollars for the info, grab a full suburb/postcode report from RP data or similar – and……all the best with your journey [strum]
And…….Yes, I have often found this too. With ADSL, and other sites going well, this one hanging or being slow, especially with posting. I am guessing this is why we often see posts the same two or more times, as others also have problems with this. [suave]
You might be well and truly stretching things here I’m afraid, although without more info on exactly what you had in mind I can only generalise. Some non conforming lenders will count pensions and other centrlink payments, but of course you would still have to be able to service the loan. SOme lenders will allow what is called ‘servicing support’ but it does get tricky, and of course there is having to find a an immediate family member (who generally is all that is accepted in these cases) kind enough to do this for you, knowing that they could get stuck paying all the payments indefinately for a house that is’nt theirs….also why one of the conditions for a loan of this type is that independant legal advice has to be sought form the person offering the servicing support, so they know what they are ‘getting into’. All the best[strum]
You will find a very well written article on trusts in this months issue of Aust. Property Investor, which explains the pros and cons in easy to understand terms. Might be worth a read. All the best[strum]
Hi Liz and Don,
I think number one easily, then two, and the others give a miss.[strum] All the best – good to see you guys ‘on the move’ still.
GlynPerhaps a few questions to ask your self to help arrive at this decision may be
1) Are you planning on doing anything dishonest, for which you may be likely to be sued?
2) Do you need to have a structure set up in order to distribute your income to more than one or two people?
3) Are you planning on not having landlords insurance on any of your IP’s?
4) Do you know people that have been sued, and or lost their property, other than via ‘messy’ marraige break ups.? Is this a concern?
5) Are you aware that some style of trusts and so called ‘hybrid’ arrangements may at any time be scutinised by the ATO, and if found to be tax loopholes, and ‘closed up’ you may be liable in this case?
6) Have you spoken to an accountant or qualified financial planner that has real life experience with the pro’s and cons of structures like this, who can give you genuine unbiased information?Lots to think about, and I am certainily not making a recommendation for or against anything, All the best with you journey, and congratulations on achieving what will be ‘number 4’. [strum]
Hi All. Firstly, Bruham – I like your style.
Now, no doubt there are always ‘coulda/shoulda’ stories, but one I remember clearly before I ever even thought about real estate remotely seriously, must be about 16 years ago now, in a small country town ‘dump’ in Victoria, about half way between Melbourne and Mildura, having a bit of a chuckle because ‘we’ could have purchased a block of land next to my parents place on my credit card – and it had a $2500 limit at the time! I t seemed hilarious to me at the time that land was attainable that easily, but of course, it would have been a terrible buy……..The rest is history as they say.[strum] Must be a lesson there somewhere……Hi. Don’t panic there! You are indeed correct. I think you will find your ‘loan term’ has dropped significantly over what the initial loan agreement said. Your interest will indeed be being charged daily, and you get the overall lump calculated each month. To give you an idea, a loan for say $250000, taken over 30 years, paid weekly or fortnightly (same effect) instead of monthly will reduce the loan term by around seven years without you making any other additional repayments. Have no idea why some people still pay monthly on a principal and interest loan. Additionally you get the advantage of gaining ‘extra’ repayments as of course there are several months with more than four weeks in them….so you gain a week every now and then. Hope that is not confusing, but tht is the ‘simple’ version, rather than the ‘technical’ one. Keep chipping away at that loan! [strum]
Exciting stuff eh? Sounds like an excellent cashflow property – in fact, if you have no other financial committments, with this rental return, you would only need to show an income of between 30 to 35k per annum gross to ‘service’ this loan, on the assumption that you pay $200 per week rent, and are single with no other debts. Obviously that will vary, but depends on whether more or less. Yet at 18, it is unlikely the Mortgage insurance companies will lend 95% of the purchase price in this current climate, so if you had a higher deposit, the amount required to service the loan will decrease. If you had/have a 15 or 20 % deposit it should be a no brainer – any less and you will probably find it challenge. All the best though, as they say, you never know unless you have a go……[strum]
