Hi All,
My wife and I have $60K that we wish to invest in a 2 bedroom flat under 15 years old. We require another 40 odd to buy the property and as we have never done this before we are as nervous as hell about making the plunge.Are there any tips people can provide if we decide to buy the investment?
Are there any tax benefits in putting the property in my wifes name?
The property has tenants which is good….what do we as a would-be landlords need to consider?
We viewed the house externally from a distance but havnt closely inspected it; are there must-see parts of the property to check?
What questions do we need to ask the realtor agent?
Forgive our naivity—this is new territory for us.
Thanks in advance
Regards…topjars(s)[withstupid]
On the finance side of things it sounds as though the property is $100k and you are putting in a $60k deposit. If this is the case it will most likely be cashflow positive so it will make a profit from day one and when you sell one day will have a capital gain. Therefore it would be good to put in the lower income earners name and maybe better to put in a trust so you can choose who the profits go to. Depends on how profitable it is as apposed to running costs of such a structure
Re: the tenants, I’d speak to them before you buy to see how happy they are, ask them to point out any faults or things if you were to be their tenant would make their lives easier. start building that relationship to have the best outcome.
Questions for agent, what rent, vacency rates, reasons vendor selling, etc etc!
Hey Topjars
Its good to see your about to take the plunge. I dont have any specific tips for you apart from searching this website for a good few hours. Before you buy I’d recommend reading this forum for at least 5-10 hours. Just search “First time investor’, ‘Help’, ‘New’, ‘Purchasing’, ‘Questions to ask’, ‘Checklists’, etc, many things to consider. There is a wealth of information and the best part is its free.
All the best
DaveI would suggest you look at using a trust. And why not borrow more money, say 80%, and put the rest of your funds in a 100% offset account. This will result in the same interest, but you will have access to your money if you need it suddenly, or if you decide to buy another.
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
My wife and I have $60K that we wish to invest in a 2 bedroom flat under 15 years old. We require another 40 odd to buy the property and as we have never done this before we are as nervous as hell about making the plunge.Are there any tips people can provide if we decide to buy the investment?
as per Terry’s advice, think about keeping some back for another purchase or other reasons. If you are worried about temptation in using the cash in the offset, You could borrow as much as possible and then pay it back onto the loan, for redraw if needed.
Not good if you need the money for personal reasons though, as accounting for taxation can be a nightmare. an Offset is better.
Are there any tax benefits in putting the property in my wifes name?I am assuming by this question that your wife does not work, and you are thinking that the cash flow in her name would be better. You are correct if it is totally positive cash flow, but best to visit your accountant and talk to him.
Of course if you borrow more against the property and it is then negative cash flow, then it may be best in your name – you can see that you need to have a strategy plan to take you into the future.
The property has tenants which is good….what do we as a would-be landlords need to consider?What questions do we need to ask the realtor agent?
Check how long they have been there for. Ask the real estate to provide a list of maintenance done over the last 18 months, or a copy of the monthly income statements, if the seller agrees.
We viewed the house externally from a distance but havent closely inspected it; are there must-see parts of the property to check?Inspect visually inside, then get all the correct reports done.
Also add, as this is a flat – talk to the body corporate and find out –
a) is there any major work due to be done
b) is there any litigation in process against/for the body corporate.Regards
JohnInspired Finance
(02) 9944 7776Thanks for all of your advice.
Im yet to be contacted by the agent to enable me to view the property .My wife does work but is the lower income earner.
Could someone pls explain what an offset account is?Thanks
Regards…topjars
It looks as though you have a lot to learn. I reckon you should call Terry or another Mortgage broker and have a long talk about which name to use, how much to borrow and have an offset account explained to you.
I know when you are new the debt is scary but I also believe you should borrow $80 000 and keep some funds aside for another purchase.
If you have a home loan then I reckon you should borrow the whole price of the new flat and put all your funds into an offset account against your home loan or even in your home loan.
But sit down and speak to an expert. There is so much to learn. It isn’t rocket science but getting the basics right is important.
All the best
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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