Hi folks my IP is quite heavily negatively geared and losing alot of cashflow each month. I have LOC against it but is slowly running out. It may take another 3years before i can see some positive results. With RAMS and they have put up rates again and have a big break fee if i sell or refinance.
Any idea what i should do? The House and Land has potential for future growth but should i wait for another 3 years before i can purchase another property?
What should i do?
any help appreciated thanks
Hi. A lot would depend on your LVR and the property value before I could give you my personal opinion, but if you have a bit in it, and want some cashflow relief, depending on the actual Rams loan you have, biting the bullet and refinancing into a fixed rate loan with the likes of NAB or St George @ current fixed rate specials (7.59%) may be enough to grin and bear the discharge fee, (against future gains??) and get the repayments down for you to hang onto it. However if you have to go lo doc, (I am assuming your loan is variable) you will likely be better off just leaving things as they are. Sadly, I don't envisage you getting a cheaper rate from your current lender in the near future, and their new fixed rates are not at all competitive. Without more specifics though I'll leave it at that. All the best, and hope you get some growth down the track. Cheers.
Can you improve the yield on it somehow…? ie. increase the rent, to minimise repayments?
For eg:
1. a quick makeover… Paint, lights, steam clean ?
2. Rent by the room
3. rent furnished etc…
Just ideas.
Hi PosE
If your negative gearing has you in an uncomfortable position, it may be possible to on sell your property(s) utilising vendor finance. If you have multiple negatively geared properties, it may only be necessary to on sell one of these, as the positive cash flow from the sale may support the other property.
I'm sure you'll find a number of Vendor Financiers on these forums that may be able to help you put a vendor finance sale together, eg a Wrap or a Rent To Own. In our experience, these sales have always produced positive cash flow. Good luck.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
If you sell you'll regret it forever. Perhaps you can get your LOC limit increased to give you some more breathing space. Or perhaps another loan can be taken out if you have some equity somewhere. This is where a broker can help you.Suffering break costs with RAMS would likely be cheaper than selling a good asset.
wow heavily geared, the last thing you'd want happening is whats happening here……………
http://www.youtube.com/watch?v=10WoQZKZkNs
good luck
Interetsing stuff my cousin just bought a couple of waterside homes down there and he reckons its a once in a lifetime opportunity
ffc1883_1996 wrote:Suffering break costs with RAMS would likely be cheaper than selling a good asset.Mmm. I think at the moment that is 110% correct…….even for a dud asset!
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