Forum Replies Created
Providing your income alone is enough to fund the purchase, then yes,
but you have to think a bit more long term then Just the first 1-4 years of the property. Whilst it might be negatively geared upon first purchase.
what is going to be the case in a couple years time. It could be positively geared, so would be better to be in your wife’s name as lower tax bracket.
but I think in this case depending on how high your income in best to buy in your name. Seek a accountant to have them run some numbers with depreciation and other costs involved against your current wage.
I use CC to get frequent flyers and that's about it. Also make sure that I sell property with a company that gives a frequent flyer bonus ie LJ Hooker 20,000 points
My understanding of sham contracting was when a company hire say a carpenter as a subcontractor (he has his own listed Abn and licences) but When actually that carpenter is doing all the work for that particular company. Ie he is actually a employee. In this case the owner would be hiring their own company to do the work.
I would question the motivation behind why you would want to.
Is it to create more deductions for the rental properties, whilst also shifting the income into your wife's name
who currently doesn't work.
Depends what stage you are in your property career. If you haven't yet got a passive income to survive through all your investments then is renting the units( for no net cashflow) unless they were positively geared worth it? and also your aspirations for future developments. Selling 3 units out 4 and paying off the debt off the 4th unit (after gst,sales costs) could be a option to enable you to realise your profits now. But if you already self sufficient and cashflow doesn't interest you. Ie your going to continue to work etc then maybe keeping for growth is the option.
But also consider from a risk point of view having 1 property in one location vs having 3/4/5 properties in the same location and consider the effects of mortgages against those properties, if the market was to turn bad would there be enought equity to support a lower LVR. If you had one property with a LVR of 10-50% then you would have less risk.
If you only keep one of the properties. I would say keep that one property forever or at least 5 years from completion of the home .
Peachy I think stories like. Give you that sick feeling when you realise they were just having you on, because you really are a sales number/ just a customer and revenue source.
I remember listening to one of Steve's live webinars for his 1st tour of duty tour in US. I don't know who was controlling the microphone but after they finished the webinar. The microphone was still on and audio transmitting, i turned the volume up on the stereo, They forgot to turn off and proceeded to have a conversation about how "did we just make 200k in a hour" and discussing it, also compared it with the lucrative property mentoring program that they did a few years back.
When the edited version of the webinar came out, I think they realised their mistake. Just goes to show that people have a camera persona and also a personal persona
corrad wrote:a difference of only $200K. Why does my PPOR affords me to borrow $450K versus only $200K for the investment property, given that they are the same monthly payment amount of $700 each?
Granted, banks do consider expenses associated with running an IP, however, even if I were to factor for example $100/week in expenses, the rental income of $600/wk should allow me to borrow way more than $200K for IP.
Thoughts?
– Its pretty simple your current income 80K lets you borrow what you said 450k. When you add a rental property you in most cases are allowed to count 80% of the total rental income to count towards serviceability. This increases how much you can borrow by 200k. You calculator could also be putting it back as principle and interest. Whereas a interest only serviceability, Not repaying the loan the total borrowing power would increase.
Also the negatively gearing effect is not calculated in most of those standard online calculators this also adds to your total borrowing capacity.
steves course does not give you a cert 4 in real estate services, you cannot act as a buyer or selling or letting agent after his course. It gives you a cert 4 in business.
Kaplan university have a course that can be studied externally. price i think was 3500 but that was a couple years ago.
Guaranteed yield 6-7%.
They don't mention the net yield in their figures do they. And they assume things like you pay a 20 percent deposit etc.
I had to read that 4 times but you just made that really complicated.
so long as A and B are not married. Then they have individual tax returns. which means independent conditions.
if B lives In their half then they get there PPOR excemption.
if A rents there half they get the negative gearing tax benefits and being able to claim half of the expenses. If they are renting half the house to another person, person C.
thats the only way they would be able to claim any form of tax deduction or claim expenses.
If you are trying to improve bank servicablity. You can purchase as a IP count the rent as Servicablity and perhaps in a couple months you change your mind and move in.
They have already purchased it. So prob no need to talk about advantages and disadvantages of company purchase.
Besides public liability.
You should obviously have home insurance on the property.
you should notify the insurance company that renovations are occurring. Some
insurance companies wouldn't pay out if your house burnt down whilst you have no kitchen or bathroom etc.
No no licences required. Builder should have those/ or if work is over 12k should be on a contract.
Wouldn't be that worried about it personally.
If you have scratches inside and the floors are stuffed when they vacant the property. Their bond will cover it. And so they should cover it when they bring there dog inside. And post pictures on a public domain of their dogs
fighting. Can't really say they didn't bring their pets inside and they are responsible for them
Have to work out if say 4/6 weeks loss of rent (whilst finding new tenants) and the property manager signing up up again for another lease is worth the money. Vs potentially some damage to floorboards that should be covered by bond and insurance
How big is this room ? That you want to turn into a bathroom?
Personally a 3rd bed would add more value . Unless it is in say a upmarket tready suburb. Where that possible room
would generate more return as a walk in room/ensuite for urban professionals etc .
A) do the research yourself and look up it in the development plan for the local area/council
b) go ask the local council and then get them to refer to the pages in the development plan that refer to the zoning and density for that area.
c) go hire a planning consultant to investigate the property for you.
Unfortunately you have to man up (or woman up) in this situation. Everybody has encountered situations in life where it feels like it would
be easier to just keep things as they are because they are afraid of confrontation.
You need to be upfront with them. Although cancelling water and power would sound like a good option. Would leave a bitter taste in the other parties mouths afterwards. Be honest with yourself.
you have to ask them to leave and you have to give a deadline. You have to say you are moving out at the end of the week and force the issue. And then if they haven't made the decision to move on out. You move there gear out the front and you change the locks. They are going to be a bit bitter about it anyway but you have to accept that.
If it's causing you stress and financial hurt. Then you are sabotaging your own well being.
Make the mental decision and once you stick to it. It's going to hurt. And you might get yelled out and they might not like you after. But if you feel taken advantage of please take some action.
Not really engineers can solve most structural loading problems. Steel I beams can support a fair bit of weight. So you just need to get the engineers report. Which if you are on ground floor to level 3 could get expensive. As would have to calculate the entire load above.
Putting aside the helping family, right thing to do etc.
Are you a only child? Could be issues with other members of the family.
capital gains tax issues for your parents even though you have stated its their PPOR.
Cost of stamp duty 20k – to purchase a asset, that you would inherit anyway (sorry mum and dad/hard reality)
valuers: valuation could be higher then the actual price obtainable at market value – hence you would enter negative equity from the get go.
Your parents benefit by obtaining sales from a property without a agent commission, so if
you were to go down that path. I would at least offer them 10k less then the valuation as they would of
lost in commissions by selling with a agent. They clearly want to stay in their house, but yes I understand they would pay your rent. But what happens (devils advocate) if you bought it off them and they didn't pay rent . Or couldn't pay for several weeks cause of some bills etc. Would you kick your parents out.
Alternatively you you could suggest it to them as a I help you you help me situation. See the following.
your serviceability (borrowing capacity) would be decent with a 80k pa job. But your equity is lacking (10k, but savings would increase 30k per year if continuing at that rate of $600 a week)
you could then purchase their house (as discussed for the rate above) and instead of them paying rent to you ie 150 a week. They could pay off their loan (80k) and with the leftover they could loan to you. At interest rates. Of say 5% would mean if you borrowed 156k from them- paying 5 percent interest, that's $150 a week you would owe them. So they could live rent free. Whilst you get access to their capital to enable you to start your own portfolio.
You also have to consider that how would you purchase the property in the first place – ie requiring nearly 25 percent to not pay lenders mortgage insurance and cover costs.
– ie – 90k required for 350k house value. Would mean they might have to go family garunteee first. (I would of said setup a LOC on the equity but they are both retired so sounds like not a option). On the completion of sale this would mean the 90k would transfer to the bank, to cover the LVR of the debt
but if would still leave 66k available – with your 10k to purchase perhaps a investment for yourself.
You should find the process actually easier then going from say 1 block into 2 blocks.
It's basically amalgamation of titles.
Issues might be seeking approval from the strata corporation. If In a unit complex of say 4 units – if you owned 2/4 it wouldn't be a problem. But if it's like 20 units- could require the majority which means getting people onside.
from a building prospective. Just follow up because sometimes the joining wall between units is actually the firewall and you might need to have that removed (usually goes into the roof of single story homes. Might be a bit of cost in just coming up with a layout that Is going to minimize moving plumbing layouts / toilets and you may have to check which internally timber walls are structural to rearrange the floor plans.
Sounds like a pretty good idea to me. If your end values : buying prices are correct.
For a time- value and capital outlay return seems pretty good.
Advertisement doesn't always mean possibility.
Depends how much involvement you want in the process and if you want a complete turn key house or you want to get a smaller builder in the build both homes .
some bigger companies can do plans and subdivision process for you. Or you can do it yourself and try to save some money and learn a few things along the way.
It would be worth while finding out how much a complete house costs to build for that area and size etc number or beds and sqm. So that you can work out your what your home
will cost to build and what they will be worth at the end by looking at comparable sales . You should of really done that before the purchase. It might not be even worth while subdividing.
Yes.
you have to get the relocatable house for fairly cheap/ nothing
under 20-30k
transportation depends on distance. There are a number of companies in different states that can give quotes.
but just to jack the house up onto the truck is about 10k
then it depends on kilometers travelled and sometimes difficulties and size of The house if escourts are required.
Good if you have a high value allotment and want to create instant cashflow. / wouldn't recommend it as much for a new subdivision.
Firstly.
did you check that the block you bought. You could subdivide. Best a quick visit to the local council.
You could design a house plan that is very front frontage orientated. Actually best to get both houses designed at the same time so that it all fits and then just have your building designer edit out the 2nd drawing if you wanted to do it as a staged development.
depending on what type of subdivision you do you could be up for 20-30k plus a couple k in land titles fees, planning, building drawings.
If you bought the block of land at a good price. Let's say for example 300k it might be worth subdividing first for 30k as each single block 300-350sqm is worth 180k hence you would of made 30k extra equity. (That was just a example you'll have to do you own due diligence)
