Forum Replies Created
Hi Bonnie. Just a thought. I imagine you both must have had a fair idea what the finished product was going to sell for. Perhaps you could simply sell them your half for half that price less a 5 or 10 percent discount. Alternatively, 1/2 the price of the land value (not the purchase price, as it was for both of you to make money), and then an au gratis payment to you of a percentage up to half of what the profit would have been hoped for. In all fairness, anything less than that you are getting the shaft I would say. As the other replies indicated, if this was not suitable you could proceed as planned, and then sell them your half at market price,agian less a discount as you are ot worrying about finding sellers or listing with agents, so it is a quick and easy deal in this case…….or it may be worth suggesting they forget about it due to the difficulty of being fair allround and then they can duplicate their own house afterwards with their share of the profits. Hope it all works for you both. And make sure whatever you agree on now, put it in writing and get it witnessed. It is not untrusting of you, but is the best way for you to keep things amicable and avoid any misunderstandings….[specool]
Hi there. Just a bit of input re your plaster suggestion….it will just crack again, and make more of a mess to fix next time. You will need to use a flexible sealant if this is your approach. Unless the house is moving heaps, this should last well and look fine when painted over….as you mentioned, it is an old house. All the best.
Hi SIlluf. My family just had a 2 week holiday in China….. What part of Australia were you thinking of buying in? It is probably easier to have a few parts targeted/in mind first. I am possibly heading over to Tasmania in a few weeks time for a look at some property (I’m on the East coast of NSW, which is not a bad place to buy for possible long term growth, but the returns suck) so may be able to assist. There is uite a bit of property around the 6-7% yield mark around, but not in th capital cities generally (I did say generally before anyone else takes me to task) All the best with your hunt anyway. I had heard China was a good spot to buy anyway? [buz2]
I was going to point these links out to you and some other info on these guys when I read your first post Zorge, but refrained, as you seemed pretty keen on them, and not overjoyed when a few others who were in the know commented. Anyway, the way I see it for finance is this 1. BANK. If they are friendly and reasonably comptetitive, and you have an easy going relationship with the relevant person…go for it. it is amazing how much the bank will …ah ‘overlook’ if they are comfrotable with you. 2. NON BANK LENDERS. Most of these guys will try to be your ‘mate’, and if their figures look good, why not try one? Bit more personal in most cases.Wizard come to mind (Sorry…not affiliated with them, but they work so hard on trying to build long term relationships. 3, BROKERS. If you have a genuine guy/gal that has the attitude that while they make money they are helping people too, and enjoy it I think they would be hard to go past….obviously they will need to have access to a numbe of lenders to be able suggest a package for you. But brokers have to go through a lot of study before they can advise, and generally will be far more knowledgable than your standard bank ‘personal lender’. And….finally, all this talk about fees, rates etc etc. the AAPR (Annualised Annual Percentage Rate) or ‘comparison rate’ really does take everything into account, so as long as all other things are equal, the loan is right for you, and you are comfortable in dealing with the ‘lender’, the lowest rate (Comparison rate) IS the cheapest loan, regardless of fees etc. However, some of the loans with the lowest AAPR may not accept your application, so you try the next best/most suitable one. THIS is where the Mortgage Broker is a great idea. Just a side point, so many people talk about all the ‘bells and whistles’ on loans, but really, for investment purposes, most people wll only ever be paying interest only, and any ‘spare’ will often be going into another property…so my personal thoughts would be to keep your loan simple. a basic variable, or fixed, as you prefer. Now…..go and buy a house while they are cheap Zorge!. All the best.[suave3]
Hi All,
Interesting read…..clash of the titans? (whoa…just a joke!) Just an observation, on what I guess many would call the low end of the investment spectrum ( I can’t invisage some of the projects you guys do….maybe one day) but I have found what is often called the ‘bread and butter’ type propertys, 3 bedroom house, or semi detached type) still seem to be snapped up very quickly….regardless of rate incresase and speculation. For example, places advertised for $120k, or perhaps as low as $100k, either are gone when you ring up the agent, or alternatively the other scenario I have found (including today, and for the last 2 or 3 months) is that no one seems particularly motorvated to reduce the ask price by much at all, barely a few percent. Like I said, not on the same level of investment, not Sydney, and I do not have as much time perhaps as many do to chase or find the ‘unofficial’ properties for sale, but I honestly have found it surprising how ‘hot’ the market is in the $90-$140k price ranges, in population center’s of anything between 5 and 20,000 people. It will be interesting to see what happens in the next couple of months….but for now in this sector of the market it seems pretty gung ho still. Take care all…..Hi Daniel
Sounds like a good deal. (As do many) As far as rates go, depending on the state you are looking at, you should be able to get a copy of the actual rates notice from the real estate agent (or vendor if being sold privately) or if not they will give you the figure anyway….just ask. management will be anything between 8 and 12% of your weekly rent. That should give you an idea. If you are interested (I have’nt got it patented or anything) and know how Excell works, I would be happy to email you a copy of a little spread sheet I worked up, that all yo uhave to do is enter in the purchase price, annual rates, management , and rent, and it automatically calculates your cashflow + or – for a loan-valuation ratio of 80, 90, and 95 %. Quite proud of the simple little thing. I have put in the formula’s of 7 % interest and 8.8 % management, but you can of course change these to suit, and then ‘examine’ various scenarios such as more or less rent, hike in interest etc. Does not allow for maintenence but the others have covered that, and it gives you an idea anyway. When you’re rich or find some other good deals remember me….Hi Tim,
Sounds like an exciting time for you both! I won’t comment other than on your query re the loan costs/set up/applications etc etc bit. If you have loans over the $250k or so (one or multiple) many of the banks offer ‘professional’ type packages that can help avoid this. It would involve paying an annual fee, which then allows you an annual fee free credit card, mortgage offset account, discounts off the ‘standard variable rate’ loan of perhaps .5 or .6 % (which makes them similar to the basic loan rate types) and a few other perks. One I recently looked at includes one free refinance per year, and no loan application fees on any amount of loans taken in future (as long as you can service them and meet lending criteria etc of course) Loan portability is another option where you can transfer the loan to another property subject to bank approval, and thus save those fees that way too. The current issue of API magazine has some excellent info on this too. (Page 78-80 if you want to have a discret flick in the newsagency..heh heh) .all the best anyway to you both. Now all I need to do is get a job as a broker..(just finished my course too, and time for a career change)[suave3]Go Dazzling…..I was going to say something like that but thought it was a bit too direct….may as well add to it. I remember an accountant I knew well explaining how they get so much money. Start off lower to win a client, then each year increase the fees until they are unbearably high for the client, so they then look elsewhere. If they move, it’s no big deal, as they inherit a new customer from the other accountant who has just done the same, and on the cycle goes. If they don’t go elswhere, in comes more money. Personally, I also found that each year, you are handed further anf further down the ‘chain of command’ which of course involves poorer service, slower response to phone or email enquireis and so on, but the fees do NOT reflect this. Gets to the stage where you really are afraid to ring them up anymore than you have to. Business, yes, but I will never be likely to use one for any property unless it gets to the stage where i own heaps (sorry, when it gets to the stage I meant to say not ‘if’…must be positive…) I do a lot more reading now tha’t for sure. I also use software to assist with tracking expenses and income, which seems to work ok. (POSH) All the best in your search![medieval]
Hi Island girl. Just for reference, in this months API magazine there is a beuat article on clauses you can use when buying, seeing a clause was mentioned. (And no, I don’t have shares in the magazine) I found it really helpful, and plan to use a couple myself (especially the due dilligence one) when making an offer on farwaway type properties. Hope you make a killing! [thumbsupanim]
Hi. Check out the ATO website http://www.ato.gov.au and you will see that course of action is discussed under things such as ‘market rent’, as Simon pointed out, and also what is called ‘arms length’ dealing with people (ie, as if you don;t really know them….ie no favours) and also ‘aggressive tax planning’,. Good idea, but you’re not the first to think of it that’s for sure. Then again, a minimal percentage below market rent should not cause any problems if all above board, as you only have to look at the huge variations in achieved rentals in various areas compared to the median figures.
And welcome to the forum! [party]Yep…that’s right. When I read of the ’11 second solution’ I thought it a bit odd, because in the 3 years or so since it was written, it is pretty well redundant unless you are game to buy in a mining town or take punt on a village in the middle of nowhere. The thoughts now are ‘profit is made not bought’. However, CF neutral properties are still possible to dig up with a bit of time and effort and not too much ‘gambling’, and is a good place to start with and see if it can be honed to cf+ over time with a bit of tweaking.
Umm….a V8 Ghia would you believe. BA Fairmont Ghia 5.4ltr V8 which we own outright, and a VL1500LC Suzuki ‘Cruiser’. But boy would we have some I P’s if we (I) had not squirted so much on vehicles over the last 10 years or so. Still we own these now, and that is that……If i could sell the car for good money I would probably buy a cheapy and fund a property with the change at the moment the way prices are… but I’d miss the satnav and sunroof! [suave3]Still, there you go . Veeery Interesting post eh?[withstupid]
Hi Scokar. no worries. Did the usual large family large mortgage no spare cash thing, until relocated a year or two ago after sellign property, and family size reducing. Rather than going into debt up to the eyeballs again (was tempting, and hard to make the call) we are renting, and with the money we had form our house sale (a nice upmarket large house, but in a smaller country area, so we are not talking a huge amount) we are now renting a house ourselves, and used the money to purchase our first ever investment property… 20% down on a moderate home which was neutral/or a whisker positeve, but will be a bit neg this year with some repairs) and then back in january bought our second one in the same town with 20% deposit, CF neutral (best we could do). Just got enough left without emptying the resource now to by a third with a 10% (or 5%) depending on amount and would love to get something we can perhaps buy and sell this time and fund something else, as we hope to hold the other two. AND SUZIEQ I find your words/experieince encouraging too I might add…..thanks for sharing it! Its hard to be balanced (espeially with family) between ‘just go for it’ and over-analising (I meant analysing!) and doing nothing but. All the best with your investing journey.
Hi Chookie. Interest only loans are generally used by investors, whereas owner occupiers generally prefer Principal also. Not that no one wants to pay off their home, but aside from the fact that the repayments are less, it is of no tax benefit to pay principal off your investment property, as only the interest is tax deductable. Naturally, if you have spare money, it makes sense to pay as much as that as possible off your own home instead where you cannot claim any tax deductions or offsets, and if you own it already, you will find many people split down the middle as far as what to do….Pay the extra off the principal on your ‘interest only ‘ IP loan, or use it to fund the deposit on another interest only loan? Check out some of the current crop of books, including Steve McKnights books, the latest from Cathy Jane Pearce, and you will also find Margaret Lomas has some excellent ‘loan stragegies and advice in her books too. Finally (whew) what some people advocate now is to have an interest only loan even if refinancing your principal place of residence, but pay off the principal also as if you had a P&I loan, which then serves the purpose of giving you a ‘fall back’ to interest only for a while when those rotten bills come in and you have to put fuel in your V8 (What-I thought everyone had V8’sstill?) This of course would take discipline to make sure you don;t just pay the interest and then squirt the rest instead of using it to reduce your debt when you can. Funny, a few years back before ever considering investing in property I wondered what the point was in an interest only loan….. And all the best too![strum]
Hi. Great that you are making a start. Just a bit of food for thought if it helps. I can’t see much point in a company unless you intend to buy and sell property quickly (ie.less than 12 months ownership) or you have a ton of property. Without going into too much details, there are no significant benefits as far as being able to claim back gst either on investment properties, and as you said you don’t have much money (me either) you will find the annual cost of ‘maintaining a company’ is simple eating away at any profit you may be fortunate enough to make. I actually have a company that is still ‘available/active’ that I had considered using for the purchase of our investment property, but after doing a heap of reading, and talking to the accountant, could not see any benefit at all. (Will hang onto the company for possible business use later, but not real estate.) The other comments here are some of the reasons we did not go this way either. Naturally you may have a different ‘plan’, but to start with my personal comments would be to use the money you would be paying in accountnats fees (sorry guys/girls!) annual company return costs, and the $1300 os so it costs to set the company up in the first place, to your FIRST DEPOSIT!!! (Exciting!)All the best with whatever you do anna6[thumbsupanim]
Well, this would be the most interesting forum thread yet! Great stuff. hey Cuey, I know where you are coming from. Unfortunately nearly all the books you get are a few years old now, and things have changed, dispite what all the ‘gurus’ say. The 40 50, and 80 thousand dollar houses most bought and sold/held/or renevated are no longer that price, and people that bought heaps of them, are now using the profits to continue on buying other stuff now, or put into managed funds/shares etc as others have been saying. It is quite hard to ‘enter’ the property investment market now, especially if you have or have had family to keep, and work full time. However that said, it was reading Steves book on ‘million dollars of property in one year (his second one, which I found really motorvational) that got me and the wife started. (along with a few other books). We bought two investment properties in Tassie, and have enough for a deposit left to get something else (probably Vic or SA, and we live in NSW) at the expense of renting ourselves, and it seems to be going well. It will take time though, and some of the books, and even other investors can make you feel a real insecure tool unless you own at least 10 house, do rennovations, and have ‘made a killing’. it’s hard to be balanced, but as you may have noticed there is an excellent ‘collective’ pool of wisdom on this site,, and I think you will still find, that (this is opinion only) as long as you avoid capital cities a tthe moment, (unless you have lots of time and or money to ‘find’ the deals, or pay someone else to) and buy a tad below the median price, and ensure you are not negatively geared, you will be on a sure thing with property……slow and steady. Then later on we can try some of the more adventurous stuff? All the best .[thumbsupanim]
This is really disturbing, and you must feel so used. My personal opinion is to get publicity and ASIC involved. Unless the mortgagee was an absolute shark, which means ASIC will be very interested in them) I would have thought there might be some recourse there once you get the ball rolling. Re the publicity, check out http://www.jenman.com.au and maybe see if they can help you, as I noticed him/them and a few others inolved on Today Tonight recently when staff at a well known real estate franchise were taking older people to the cleaners with a similar scam, less the finance bit. keep at it, and while you may not get anything back (sorry,) you will likely find that some if not all of the mongrels end up with boyfriends for a few years where they all belong. keep us posted.[evil4]
Hi Matt. I agree with the other reply. Unless you have a particular reason that you have to sell, I would imagine you have a bit of equity in this home? You could use that to ‘borrow against’, and then use that for a deposit on your property of choice. It may be a cheapy, and not nearby, but then you have two properties to work for you. In time, you can do this again if the value of your house/houses increase, and so on. And you will have saved thousands of dollars on fees, and probably capital gains tax. Hope all goes well.[exhappy]
Whatever works, but I have tried this with a couple i know locally, and it seems to invite a barrage of sales speel on every property they have. WHat i have tried once, and plan to do again soon is expressing interest in one particular property, and then once talking to a salesperson, asking is there any property in thelower price point of the market that they have had on the books for a while or that they think someone is quite keen to sell that has had no offers and see how you go. It’s a learning curve is’nt it? All the best[hmm]
Interesting stuff for sure. AUSPROP, there is two of us if it makes you feel any better. anyone with a bit of spare money should look at the South Coast NSW for property now, as it is a buyers market!. Shares seem to be almost gambling unless you stick to the top 200 type and buy at troughs, unless you really know what you are doing and have hours and hours on end to research them. If I was to ‘do’ shares again it would be via a managed fund. Still got a bit in shares, but going to try and get another one or two cheaper cashflow neutral type IP’s (yeah, CF+ would be good, but not eash to find) and see how they go. Interesting viewpoints guys/girls, so now you have mine too! Take care…. [suave]
