Hi Brizza,

This is the process in Victoria, I expect it is fairly similer elsewhere. First need a town planning permit (DA). Once you have the DA you can start building, usually you get the subdivision done once you start buoilding, a surveyor does this. The cost of a DA and surveyor would probably come in at around $10,000 for 2 units.

As part…[Read more]

Hi Jason,

A couple of things to take into account when investing in commercial property is that the leverage available isn’t as high and the interest rates on loans are higher. Vacancy risk is also higher.

My personal view on what you have said about the opportunity you are looking at, given the info availoable, is that you will be using up a…[Read more]

If you think you might swap the PPOR into an IP, the sooner you swap the loan to IO the better. The reason being, if you have a mortgage on your new PPOR, the interest after tax is going to cost you a lot more that the interest on the IP, the difference depending on your tax rate. If the money is in an offset you can use it for whatever you like,…[Read more]

Terry,

The product specifications say they will only go to $500K, but there is always flexibility in this, particularly for a strong borrower. I do agree that a 95% would be better.

Regards
Alistair Perry

Sorry for the delay Marco, but hear goes.

10 year growth in Median prices:

Brunswick
Houses 11.0%, Unit/Apartments 12.2%

Coburg
Houses 11.5%, Unit/Apartments 12.5%

I agree with Michael re his preference for Brunswick, depite the slightly lower historical growth rate.

Regards
Alistair Perry

Hi Gilltraps,

Surveyers process subdivisions, you should find yourself a good surveyor as your first point of call. If you’re in Vic I can give you some names.

Regards
Alistair Perry

Hi Pelzer,

You don’t need a 20% deposit, you can get quite good rates for a 100% loan, which would be far preferable to a wrap. If you really want to purchase through a wrap contract though give me an email address or other contact and i will pass it on to someone who can assist you.

Regards
Alistair Perry

Hi,

All the strategies you mentioned are sound. A smaller IP will likely give you better cashflow now, but buying the larger house now and moving in later may save you more money over the 6-8 years, assuming prices appreciate over this time.

One thing you should most certainly do though is to make sure the loan on your current property is…[Read more]

Hi Rexilla,

The rental income seems high if it is for 6 months. For the second scenario have you taken into account possible tax deductions?

Regards
Alistair Perry

Hi Marco,

I’ll post the average growth in median price over 10 years for you tomorrow. I have the info just no with me. I suspect that they have outperformed the average and expect they will continue to do so.

Regards
Alistair Perry

Hi Jack,

You have more flexibility with a 100% offset account than a LOC, you can organise for it to be interest only and then put all your money in it, not just rent. The debt stays the same, but the interest charges will be reduced. If you are paying interest only then there is no need to redraw anything, you just use the money building up in…[Read more]

Hi Lil,

As long as you move in in the first 12 months you should be able to get the FHOG and stamp dute exemption. With regard to CGT, check with an accountant, but I believe that as long as you don’t claim interest on tax you will be able to get a full exemption. At worst you would only be liable to CGT on a portion of the capital gain when you…[Read more]

Hi Benderfile,

Another option would be to sell the IP’s into a trust, if you operate your businesses through a trust already, this might be a tax effective structure for you.

Regards
Alistair Perry

Have you had a look in the Bayside suburbs. You won’t get a house for $300K, but you could get a townhouse or large unit, somewhere between Cheltenham and Mordialloc, if you are prepared to buy something that needs improvement. Its actually quite quick to get to the city from there too, because there are express trains from…[Read more]

Hi hb,

I never said that people can’t start businesses and be successful, such as the people you listed. Hell, I am a small business operator myself. This does not change the fact that the majority of people are employees.

I think you will find that the excessive use of credit is mostly to do with consumer credit. How many small business owners…[Read more]

Hi hb,

Your post is very interesting and certainly shows there is more than one way to build wealth. However, most people do not operate their own businesses, and if they do few are as successful as you obviously have been. For the majority using their cashflows to invest is a sensible way of building wealth. Paying cash as you did for IP’s is…[Read more]

Hi Doncossack,

Good luck with Russia. I have a friend whose parents were kidnapped and ransomed by the Russian mafia (they got out unharmed) and another who used to export food there and owned a few supermarkets. He no longer deals there, has lost all of his investment and has been promised a grewsome death if he ever steps foot back in the…[Read more]

Hi Marisakim,

As Richard stated, being self employed does not mean you cannot get a loan. Even though you have been in business for less than a year it may be possible to get a high leverage full doc loan.

Regards
Alistair Perry

Hi Tony,

If all you are after is sample advertisements, have a look in the trading post there are always lots of wrappers adveretising in there.

Regards
Alistair Perry

Hi stuck-at-two,

From what you have said it seems that the two properties were cross-collaterised and the bank has now told you that you can uncross them. This is good as it means you have additional equity, and if you sell the IP you won’t have to pay down the loan on the PPOR, although if there is one this would be the best use for it. If you…[Read more]