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Congratulations Paul. Disciplined approach, too much for some, but if you can do it great…..good on you for setting and reaching goals. ….and I bet there will be plenty more milestones on the way for you. All the best.[strum]
It would be a 6% return……gross. Which is the figure you see when real estate agents quote a place as having X% return. The 4.5% is your net return. So, what we need is a property with a 10% net return…..[laughing]Yeah right! All the best.
I’ll try not to be overly cynical….or bitter. You could always try raising a few thankless kids, who still do the smoking and injecting, but cost you so much meanwhile, that by the time they do leave home (early or otherwise) you cannot afford to buy anywhere decent yourself? That feels just as bad. Oh, and they could then save thousands getting the first home buyers grant with no stamp duty, while you pay that if you are able to actually afford to buy a house. And have I got a great story that reflects what many (not all) starting out today are like. ….. I often feel you don’t appreciate the ‘good things’ in life fully, unless you have worked and ‘done it hard’ in the past, I have lost count of how many ‘younger’ first home buyers want a house ‘just like my parents’, who have saved/worked/begged/borrowed etc etc and would never consider living in a weatherboard place, or a two bedroom home, or something with (gasp no!) second hand furniture. Kinda like the young fella (not that much younger than me…) I spoke to the other day who was ‘quite upset’ to learn he could only service a $270,000 loan. ‘I want at least $330,000 he said beligerantly…’What can you buy that’s any good for ‘only’ 270k?’ With an area that has a median of around 245k I did not really see that as a problem. Just as well there a still a few left that work hard and appreciate what they are able to achieve by a little bit of hardwork, the right attitude, and not begruding someone from a ‘generation catagory’ a few nice things after years of work and spending tens/hundreds of thousands bringing them up…… News flash….It is not just first home buyers that have difficulty affording property. It is out of the reach of many now. A $300,000 house, using a 5% deposit, will cost a non FHOG buyer around $14000 in stamp duty and LMI in NSW. A First home owner will ‘save’ $18000 on this. Use this excellent provision when or while you can, or rent. Easy. Man, that feels better. First rant I’ve had in ages. Thanks![strum]
Your loan is only interest only for a fixed term, commonly 10 years. at that point, it then reverts to Principle and interest for the remaining 20 years, (or whatever the loan was taken out over) until at the 30 year mark it is paid off, and you own it. of course, it is ‘hypothetical’, in that who knows what you, the property or property prices will be doing in 10 years time? Some popular options are to sell, refinance, or renegotiate after the initial interest only period is up, of course hoping that it has significantly increase in value. if it has not, it was bought poorly and you are in a spot of bother……..[thumbsupanim] All the best
Not putting a stick in the spokes…..but regardless of whether the true answer is 50 or 100k, remember by far the majority of lenders require you to be able to service the loan when borrowing, making equity almost irrelevant. and everytime you ‘refinance’ your other loans are more often than not viewed as principal and interest even if interest only, with the alternative being to cross secure your properties, which while easier and on paper ‘cheaper’ often results in a whole new series of problems if you ever want to sell. That being said, if you earn a squintillion, have a great line of credit already to allow for low LVR purchasing, or get heaps of rent via CF+ properties, it does not take long to ‘run into a wall’ regardless of equity. Still, net wealth is way up, as everyone has mentioned. Trajik is on the money as far as the end results of your scenario though. Now that I have typed this, I think I should have posted it somewhere else, but the whole equity thing is not the b all and end all for many. [thumbsupanim]
Hi Bluemist. THe section 32 is basically a vendor statement , as in something you as the vendor have to supply in order to make your house available for sale, so so have to organise or pay someone else to do so for you as you suggested. If you have had some interest in your house already, you could certainly do worse than try and sell privately. We sold our last PPOR privately, and th e interest we had was far more than what the real estate agent could drum up by sticking one add in the paper, a sign in his window, and being bored when showing someone through our home. I made up a webpage, and did a couple of private paper adds and made up a sign and I was away. Nothing a good agent could not and should have done. And took a bit of pride in it when showing someone through……..A good and entusiastic agent though is worth their weight in gold. All the best with however you go about it.
Nah….I’d much rather buy one of the Fijian or French Islands advertised on the same website. Nice or what! [biggrin]Maybe I can get that twit that keeps on posting adds elsewhere on the forum ‘kindly ‘ and very persistantly requesting joint ventures in every part of the solar system to do a joint venture with me where I pay nothing and he pays the lot perhaps……….My very own island…….Just need a ‘No Doc 125% LVR loan Interest Free with no repayments until 2016…..[strum]
Sorry to hear mkc. Cleans the digestive system out I’ll bet….. Without knowing your circumstances as to why your finance fell through (servicability?) I’m just wondering if you had considered looking for finance elswhere, and as a final option with a non conforming lender as opposed to a bank. YEs, higher fees, interest etc etc, but if you have spent all that money, and genuinely believe you have added that type of value, it may be a better choice than flushing the lot. Just a suggestion, like I said without knowing the details. HEard of a similar deal recently, where the financier pulled the pin on the vendor at the last moment when they were about to sell their property for about $20k less than it was morgaged for (having been overvalued by overzealous valuers in the first place) , with the intention to pay balance off via alternate means……The prospective buyer had already done the knock out the wall things with early access etc etc, and had it ready to onsell at a 75k profit at settlement time…..uh oh. Solution? The buyer/renovator ended up paying the difference…..and losing nearly half his profit , as opposed to losing the lot. anyway, all the best, and hope it works out.
Hi Batesy. If downstairs is Ok, and your heating is taken care of in both areas, for cooling upstairs why not just look at a wall mount split system. They do a great job, and there is plenty of choice, and the heating works well too, not just the cooling. all the invertor units do, is cost less to run in theory, as they take a while to kick in and start up, wheras non invertor units get to the temperature required a lot quicker, but take some juice to do so. (ie power $$$) Best for low use where quick results required, invertor fine if you paln to be in fornt of the tv sipping lagers all day. Couple of grand and you are away and happy……..It’s either that or a fan……[strum]
Hi Mark. I understand it to be 5 years. Once the credit provider has advised the CRA of a default such as yours, they are also obliged to advise them the outcome, such as any agreements reached, and or if it has been paid. If you have paid it out, it should show this, and if you are applying for any finance, you may find that mentioning it up front, explaining what it was and that it has been paid, will be seen in a more favourable light than not doing so. Depending on what finance you have in mind, there are some quite competitive home loan products now that for one or two defaults under 4k or so, are no drama. ….depending on what your ‘ultimate goal’ is….anyway, all the best.
Hi Bluemist. There’s a few options you could look at, and the folowing questions/thoughts are just that, not financial advice.
Firstly, true ‘bridging type’ finance is good to stay away from in my personal opinion unless there are no other options and you ‘just have to’. However, if you own your existing place outright, and are planning to sell, why not simply make your clause ‘subject to finance’ and go ahead and take out a good, no frills loan on the house you want to buy, using either your deposit or equity in your current home? As long as you can service the loan, I imagine you would have people chasing you to lend money! Then at your own leasuire you could sell your existing property, without ‘rushing into it’. and likely get a better price with a few emotions out of the equation. I imagine as soon as you sold the property, you would then put all the money into the loan. If this would pay the loan off outright, you would want to make sure you get a loan that has no, or very low exit fees, as in all fairness lenders want you for the long term, not to pay out a loan within 3 mths!. If this was the case, you would be better paying a slightly higher interest rate, than a low/discounted rate with big exit fees (sometimes called ‘deferred admin/application/establishemtn fees…all mean the same. For example, a 1% DEF on a 350k property is $3500 !!! Not a prob long term though as they usually only apply for three of four years.)
Congratulations on owning your own home outright though as this presents you with a few options, and don’t be afraid to ask plenty of questions from your lender, or via this forum.
All the best. [strum]Hey DraconisV. Sounds like you’re making some great progress….good on you. You asked, so I’ll give you my 3 cents worth. It is encouraging to know your girlfriend has some interest now, so why not make it your little project to work towards doing something together, and forget about the father in law’s plans. Other than a couple of suggestions, or ‘general’ info you could share, I would not be pushing anything on him with the thought of both maintaining family harmony, and the fact that it is ‘his baby’ as it were to do with as he sees fit. Sometimes, you can get a passion for something, and learn heaps and desire to share it with others, however well meaning, and it comes as a bit of a shock to find out they think differently, or have different aspirations. Wylies comments are pretty spot on. Keep the peace, and enjoy using what you have learnt to benefit yourselves, and as you have already done, gently try and help otheres when it is within your means to do so, and you think they will respond well. Keep us posted how you go with your property goals too! [thumbsup2] As for shares……….if he chooses carefully at the moment, he may just do ok….
Kinda makes me feel a whole lot better about all the money I’ve ‘done’ on cars and bikes over the years….puts things in perspective eh? [whistle]
Hi Andyperry. What an informative post – thanks for sharing that info with all, and not being cagey about where you are investing. Tell me, is it possible to provide a tad more info on how you went/go with finance over there, as I take it you are an Oz resident, and were unlikely to have had any sort or preapproval for both areas? Hope these work out as great investments for you. [strum] Thanks
Yeah, I’m trying to find them TerryW, honestly. The realestate agents I have made contact with recently in particular keep telling me I’m ‘dreaming like everyone else’ (recent quote) but it’s not for lack of effort. Thanks for the encouragement but.
V8ghia (Glyn)Hi Carpenter…..Welcome to the forum. Sorry to cause dissapointment, but methinks you will be unlikely to find anything that even remotely meets the 11 second rule any more, unless it is in a remote location or done very creatively – which requires time and skill….and occassionally someone elses misfortune. (I am talking about residential property) Five years ago it was different, but that was then. To help in making purchasing decisions, many people now look at what the gross rate of return is on the property price to give them an idea, and also research as Terryw said. All the best.[strum]
No worries. LVR is loan to value/valuation ratio. Ie, If a property was 4 sale @ $100000, and you borrowed $80,000 of it (you had a 20% deposit – $20,000 your loan would be @ 80%LVR. A lot of investors try for higher LVR, such as 90 or 95% (in the above scenario, you would only use a $10,000 or $5000 deposit respectively) but loans over 80% LVR require the lender to pay ‘Lenders Mortgage Insurance’, which can run into thousands of dollars, depending on the property purchase price. Higher LVR over 80%, the higher the LMI as a rule of thumb. You can appreciate that a loan with an LVR of only 50 or 60% means you have to cough up a bit eh? All the best with your investment journey too! [strum]
Hi. We are using AAMI, rate and cover seems good, but have never had to make a claim. (would have if our excess was lower but!) All the best.
Hi. Check my reply under your other thread and hopefully you will find the info of assistance I have posted. Hey, all the best. V8Ghia
Hi Hotproperty investor (arent we all? [biggrin])
Basically a company title is where the owners of a block of units form a company, with each becoming shareholders of it. Not real common, and as others have alluded to you will need to seek legal advice if serious about purchasing one of these type units. You actually don’t own the legal title to the property, but actual shares in the company that owns the title, which is the land and buildings. Obviously this is why financiers are not overjoyed at the propspect of funding one, and if you can find one that will, they will impose some seriously low LVR’s. (50-60 %?… not sure) The other ‘challenge’ is that the majority of shareholders are required to approve of any decision to transfer ‘shares’, so you could be locked out of their little company even if you want to ‘buy’. I understand even though you would have exclusive possession of your unit, you will need approval from the company to renevate or alter the building too. Phew! Hope that give you a better idea. You can appreciate why most property is strata titled now too I guess. All the best with whatever you decide. [strum]
