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November 28, 2013 - 7:19 am

I have an IP in Gunn, Darwin that is not defence housing. Quite a few defence housing properties in this suburb.

 Whilst I initially thought Defence Housing was not a good deal due to high management fees-was 16.6% pa including gst as opposed to about 8.8% gst incl.  for a private property.

However the big plus is you receive rent for defence housing whether it is occupaied by tenants or not. With a gap in vacancy on my private rental over Xmas (which equated to 2 months) defence housing would have been a better proposition.

I understand defence housing repaint inside the property at the end of the 15 year lease period as well. 

Only problem with defence housing is its harder to sell as it only attracts investors (and only those investors who believe in the defence housing concept).

 

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November 27, 2013 - 4:52 am

wilko1 is pretty much on the money.

The lack of 50% discount for CGT is a big negative though.

.

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November 27, 2013 - 3:07 am

What about using a Pty Limited company to purchase an IP?

Does this avoid the National Consumer Credit Protection Act requirements?

What are advantages/disadvantages of an IP held in a Pty Limited company?

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October 5, 2009 - 7:23 am

Thanks for that info Richard,

now to wait for a competitor to match this deal and reduce the no doc rate.

Ajax

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October 1, 2009 - 10:27 pm

For a 75% lvr no doc, non impaired borrower, clean CRA,  sydney residential what interest rate am I looking at?

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July 25, 2009 - 4:53 am

There's a guy I know who lives near there was saying the area is prone to break-ins. There is a low socio-economic area just the other side of Anzac Parade. I wonder whether this guy is just being overly negative. Where else can you buy a new property in Sydney's Eastern suburbs with golf course and ocean views and easy access to a beach (Little Bay Beach), fishing, golf, diving etc.  

Have often thought if I had access to the $ this would be a good area for capital gains.  

http://www.sydneydive.com.au/content/view/30/27/

"

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Little Bay Beach

Written by Marty Hing (Instructor, SDA)  Location: Off ANZAC Pde.  Near the old Prince Henry Hospital.  Do not park in the Chapel area as this is a great inconvenience for locals and those who are attending services here. There is plenty of designated parking in the area.  Local Creatures:  There are often large schools of old wife and long finned pike hanging around the boulders.  Giant cuttlefish and morey eels hide amongst the boulders and under the ledges.  Octopus are quite common in the inner bay, and I have seen several pipefish along the sand line within the inner bay.  Amenities:  There are no toilets here.  There is a phone in the golf course club house locates south of the beach. Experience Level:  Beginners to advanced Precautions: Watch out for airborne golf balls and speeding golf carts!  Outside the inner bay can get quite rough in both northerly and southerly swells.   Best time to dive:  Dive right on high tide for the best visibility Entry/Exit:  Entry and exit straight off the beach.  The rocks on the southern end of the beach are the best place to enter. Navigation:  Little bay is a double bay.  After entering at the southern end of the beach swim out about 20m and descend.  You will only be in about 2m of water here.  Follow the rocks as they begin to head north-east.  There is a small breakwall at the entrance of the inner bay.  Swim over this and head out to the east.  There will be rock ledges on your right to explore and poke around the boulders.  From here you can decide to follow the north wall or the south wall.  Both walls head east for about 100m.  and get to about 15m depth.  There is a bowl of sand in the middle.  Follow your chosen wall until your turn around point and then head back into the bay.  Points of Interest:  Search the various tumbled boulders and ledges for giant cuttlefish and morey eels.    Tips from the pro:  Take a small tank for this dive.  You have to walk up a fairly steep hill after the dive.  This is a great night dive"

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May 17, 2009 - 12:33 pm

wealth4life.com wrote:

900,000 will be in mortgage stress by November 2008 … Fin Review … fact

Why is that statement a fact?????

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April 8, 2009 - 5:54 am

"

WESTPAC has become the third major bank to cut its standard variable mortgage rate by 10 basis points.

Westpac also slashed 25 basis points off its rates for business loans and credit cards.

The move comes after Commonwealth Bank of Australia and ANZ lowered their standard variable home loan rates by 10 basis points in the wake of a 25 basis points cut to the cash interest rate by the Reserve Bank on Tuesday.

Westpac's new standard variable home loan rate of 5.81 per cent would become effective on April 20, the bank said in a statement. "

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March 30, 2009 - 5:30 am

Landlord puts entire block of units on market to sell for several million $. Has builders, valuers, etc running around the building with tape measures etc for weeks (giving an uneasy feeling to tenants particularly one lot of tenants that only recently moved in)

Real estate agent decides to show the better units to propsective buyers (of which tenant's unit is one as he has recently painted the unit) . Tenant agrees to inspection. Shifty couple with sfa chance of forking out $3m inspect (along with lots of others with no ability to purchase) all traipsing through those units open for inspection (with only 2 agents supervising). Shifty couple (when unsupervised) steal whatever they can from units open for inspection…including money, prescription glasses etc). Agent claims on insurance and reimburses but tenant needs to waste time buying new glasses, replacing missing items.   

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March 25, 2009 - 8:39 am

Just did a search on houses in Gunn (a suburb in Palmerston area). Many are under contract/ under offer

http://www.realestate.com.au/cgi-bin/rsearch?a=s&cu=fn-rea&s=nt&ss=&ag=&t=res&snf=ras&chk=0&lead=&ty=&searchFormSource=advanced+search&tb=gunn&u=&regionid=&pm=&px=&pme=any&pxe=any&cat=Duplex%2FSemi-Detached%2CHouse%2CTerrace%2CVilla%2CWarehouse&minbed=&maxbed=&parking=&minlandsize=&p=30&o=p

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March 17, 2009 - 2:16 am

craigsed,

my RHG loan was variable. I would stay with RHG if their variable rates were in line with other lenders but have to incur 2% ERF's to change lenders as their rates are considerably out of line with bank lending rates.

Where RHG's rate is 7.88% other lenders are around 5.2% I am being screwed. Their variable rates went up higher than most other banks (at the start they were lower than the banks) and have not fallen by as much as other lenders…they are not passing on all or at times even most of RBA rate cuts. At the same time RHG are reporting profit results that exceed RAMS prospectus forecasts (a part of which would be income from Early Repayment Fees as disgruntled borrowers finance away from them).

RHG have also varied their discharge fees after the loan contract was signed..from $225 to $625. They have done this as the contract says they can vary  these fees at their discretion. Most loan contracts have similar clauses.

I see at p.49 Fin Review today that RHG itself is being held over a barrel by its lenders and I don't have much sympathy:-

"…RHG says its being "put over a barrel" by the provider of a $750m debt facility"

One of RHG's arguments in NSW Supreme court over the debt contract is that… "indemnity amounts and interest being calculated by Elektra are not in "good faith and in a commercially reasonable manner"…

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March 13, 2009 - 8:37 am

CSI,

RAMS will pay a rebate if you refinance from RHG…I receive $1500 for a loan of about $150k..(rebate increases based on loan size) .however where normal RAMS variable loan has 1% Early Repayment Fees for 3 years if you accept the rebate offer they will require 1% ERF's for 4 years..

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March 13, 2009 - 3:56 am

To discharge their mortgage (yesterday) and in addition to up to 2% Early Repayment Fees they also charged me legals $295 and a discharge fee of $695. My variable interest rate has now fallen from 7.88% with RHG to 5.29% with new lender (RAMS). There was also a small amount of cash out as property value had increased (even where moving from RHG 85% lvr loan to RAMS 80% lvr loan).

The discharge fee in my case was $695 despite being stated as $295 in my loan contract. Person in RHG discharge section  stated contract permits us to change our fees at any time. I asked how was I notified of the change..answer we advertised this in the Australian and we would have written to you and given you a letter advising of increased discharge fee.

I asked could they send me a copy of the letter to me. They said it was a proforma letter which won't have your address on it.

Am tempted to buy 100 RHG shares and attend their next AGM to ask a few questions. Financial press reported that their profitibaliity at the moment is exceeding original RAMS propsectus forecasts despite them not writing any new business and having a very low shareprice. Why?…probably due to them screwing clients with their higher rates and subtanital ERF income.

Its all short termism by RHG…this time next year they may be left with only problem borrowers who can't satisfy other lenders of their ability to service a refinanced loan. Which will mean falling profits. Their loans in arrears are already higher than a lot of bank lenders. The directors deserve a big whack of karma for the way they have treated their borrowers.. I suspect they will get it too.

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February 6, 2009 - 2:26 am

ASX Announcement Thursday, February 5, 2009

RHG Unaudited Half Yearly Profit Guidance and General Update

RHG Limited (previously known as RAMS Home Loans Group Limited) wishes to update the market on recent performance with unaudited profit guidance. RHG Limited expects to announce a consolidated half yearly net profit for the half year ended 31st December 2008, (after provision for tax), in the range of $65 million to $70 million.

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February 6, 2009 - 2:18 am

When I did a news search on RHG and interest rates in the last few weeks this is all I came up with. No mention of interest rate cuts yet.

http://www.brokernews.com.au/contents/news/32105/details.aspx

Client sues RHG over exit fees

By Agnes Gajewska | Monday, 19 January 2009

A disgruntled client has launched legal action against non-bank lender RHG Home Loans over her early cancellation fee.

The action against RHG is being led by client, Emily Hamilton, who was faced with a $12,000 exit fee after she sought to refinance her low-doc loan, the Australian Financial Review reported.

The case is to be heard at the Victorian Civil and Administrative Tribunal, at which time Hamilton will argue that the exit fee exceeds the company's reasonable costs.

She will also argue that the interest rate on the loan – which is 0.99% higher than when she took it out in July 2007, despite a 2% drop in official cash rates – is unreasonable.

Hamilton's legal representation, the Consumer Action Law Centre in Victoria, claimed hers was not an isolated case.

Co-chief executive of the Law Centre, Carolyn Bond, told the AFR that phone lines had been inundated with client complaints against RHG.

"We've had calls from hundreds of consumers about the same company," she said.

RHG spokesman Matthew Horan said the company did not comment on individual cases however told the AFR that exit fees are calculated to cover overhead costs incurred for writing a loan, and disclosed at the time of contract signing.

"This case has no merit at all and we will defend it vigorously," he said.

RHG, formerly RAMS Home Loans, is currently in wind-down mode after Westpac Banking Corporation acquired its brand and distribution network in 2008.

According to the takeover conditions the group is prohibited from writing new loans until November 2010, but continues to service its $10bn mortgage book.

Westpac is funding loans through the RAMS franchise.

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February 5, 2009 - 2:30 am

Thanks for that news Terry.

My posiition:-

I have one loan with CBA (5.19%), one with RAMS (5.54%) and one with RHG (8.68%).

If I accept RAMS re-finance offer of the RHG loan (a loan of about 150k) this will reduce the rate on this loan to 5.24%.

Across 3 properties the interest rate cuts have resulted in the possibility of a surplus of gross rent over interest expense of more than 15k pa. Taking out other costs the portfolio (hate that term) will then be close to cashflow neutral.

If we get another cut (interest rate futures are saying 100 basis points cut by May 2009) any further interest rate reduction should be straight cashflow.

Now to guess how bad the economy/unemployment will become later this year (to consider whether income from self-employment and/or rental income will fall substantially justifying selling the last IP now albeit slightly cashflow positivel). 

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February 5, 2009 - 1:30 am

Hi petit homme,

yes RHG and RAMS are separate companies.

RAMS administer RHG loans (out of same offices at Homebush Bay Drive, Rhodes NSW).

Westpac are the credit provider for RAMS but not RHG.

I have both a RAMS loan and an RHG loan (and am no great fan of RHG)

RAMS corresponodence to me sometimes has a contact number which if you call will be the telephone line (recorded message..if you want * press A etc for RHG). Annoys me when I call RAMS number to be answered by RHG. Also I don't like the recorded message for both RAMS and RHG.

I reckon after 3 years non competition period (since former RAMS became RHG) RAMS will simply acquire RHG and maybe funding costs for RHG clients will fall. Would make sense for RAMS as they already provide admin and are presumably using the same systems for both entities (how to acquire a whole heap of new clients who are currently paying high interest rates and woudl eb grateful to be transferred across to a lender funded by Westpac) .

Ajax 

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December 11, 2008 - 7:18 am

Raymond,

assuming stated income over 75k (about double that) on a RAMS SE Pro pack lo doc what period of gst registration will the mortgage insureer require? Have ABN for 9 years, gst registration for 1.5 years. Last time I applied for RAMS loan GE wanted letter from accountant explaining why gst registration was so recent…this request would probably still be on file with GE.

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December 9, 2008 - 11:48 pm

Am thinking a unit I bought last year might soon be cashflow positive.

Purchased for $172k now rents for $280/wk, loan of $146k at 8.48%.

It takes a lot for a property to be cah flow positive when I factor in body corporate levies (fixed adn sinking fund) of $2800 p.a., council rates, landlord insurance, managing agetns commission. A still out of pocket by $2.5k pa.

I don't think buying then revaluing hoping for capital gain is the way to go.

Buying ahead of further interest rate cuts (and possible increases in rent) so that cashflow improves could be.  

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December 9, 2008 - 10:41 pm

Still with RHG-ERF's are 2% until July 2009 then 1.5%.

I took out an 85% lvr lo doc loan with former RAMS in July 2007. Variable interest rate currently 8.48%