The subject heading above made me sound like a mummy's boy !
I'm also new to the forum so don't flush my head down the IP toilet just yet !My mother has a home in Bardon, Brisbane, she bought it for $220k in 98.Re-mortgaged for another 100k in 2003 to pay off debts at a rate of 11.4%, now owes $ 300,000 .The house may be worth up to 500k now.The place is rented out for $1600/month but she has to cover $1100/month.She lives in London now, making good money and is purchasing a new home there.There are no negative gearing advantages to her as she is planning on staying a while. ( not until she eventually returns obviously )She does however need to get out of a mortgage at 11.4%. and be able to afford her new mortgage in LondonMy wife and myself live in Sydney and would like to purchase an investment property up to $500kWould there be any advantages to purchasing the home from my mother ?Maybe there are other alternatives.I realize I would need to seek professional advice and pay for it on such matters but wondered if It was worth pursueing.Thanks,Nick.Hello Nick
I don't understand why your mother is paying 11.4%. Surely she has enough equity in her house to simply renegotiate a normal residential/investment loan which would then be very roughly around 7.5% . She could also make it interest only for a number of years. This would mean that she would have to put in about half of what she now has to contribute towards the house.
Seeing as it was her home and because she lives overseas at the moment she will not have another PPOR in Australia, she can rent out the property for up to 6 years without attracting CGT if she sells. A nice bonus if it's in an area that's likely to grow over the next few years.
If she is planning to come back one day then she will still have her home and not need to buy back into the market at whatever price it will then be.
Check this with your accountant but I believe that your mother can accumulate the loses and simply use them to offset any gains she makes one day in the future.
Hope this helps
ElkaP.S. Using wee man as your user name is also not helping your reputation.
(Just teasing you)Nick
Without commentating on whether the deal is financially sound all i would say is Bardon is a great suburb and you will struggle to find anything for less that $500K there. I am in Chapel Hill next door and nothing sells for those prices there days.
If she is happy for you to buy it at $500K i dont think you can go too far wrong.
Richard Taylor | Australia's leading private lender
elkam wrote:Hello Nick
I don't understand why your mother is paying 11.4%. Surely she has enough equity in her house to simply renegotiate a normal residential/investment loan which would then be very roughly around 7.5% . She could also make it interest only for a number of years. This would mean that she would have to put in about half of what she now has to contribute towards the house.
Seeing as it was her home and because she lives overseas at the moment she will not have another PPOR in Australia, she can rent out the property for up to 6 years without attracting CGT if she sells. A nice bonus if it's in an area that's likely to grow over the next few years.
If she is planning to come back one day then she will still have her home and not need to buy back into the market at whatever price it will then be.
Check this with your accountant but I believe that your mother can accumulate the loses and simply use them to offset any gains she makes one day in the future.
Hope this helps
ElkaP.S. Using wee man as your user name is also not helping your reputation.
(Just teasing you)Thanks Elka,I will pass this info on to her and let her know that re-negotiating her loan would be her best option. She told me this was the only rate/loan she could get at the time.I appreciate the feedback.Cheers,NickPS: I am Scottish and not very tall – hence the name.Qlds007 wrote:NickWithout commentating on whether the deal is financially sound all i would say is Bardon is a great suburb and you will struggle to find anything for less that $500K there. I am in Chapel Hill next door and nothing sells for those prices there days.
If she is happy for you to buy it at $500K i dont think you can go too far wrong.
Thanks Richard,The feedback is appreciated.NickPS: I'm on a mac and there are spaces between sentences on my screen.Just in case you thought that I'm so wee that I can't reach the " return " button !
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