[DeanCollinsParticipant@deancollinsJoin Date: 2015Post Count: 376]

June 3, 2016 - 6:17 am

I can if I want to pay a break fee on the fixed loans……

The whole point of the Portfolio Loans was to get the advantage of the equity from each property when purchasing the next.

Luckily we have one property variable with $200k available so depending on what happens on Monday we’ll basically start shopping in a week or so for another bank and just use that $200k as “the deposit”.

The irony is that we are practically neutrally geared and the next property would have cost us $5-10k pa……as we managed to pay down $A110k in the last 12 months…..I think the risk to the bank is negligible.

What is at risk is that in August 2020 when our last property comes off “fixed” that we walk the entire portfolio off to someone else quick smart.

[DeanCollinsParticipant@deancollinsJoin Date: 2015Post Count: 376]

June 3, 2016 - 12:11 am

Richard Taylor wrote:

Hi Dean
Not quite correct.
SGB have limited the lvr to 70% on a purchase and a few currency restrictions but still doable as an expat.

Hi Richard, we know about the 70%LVR for expats, this has always been the case and isn’t the issue here (we are currently 54%LVR and more or less neutrally geared) the issue as I’ve been told is NO FURTHER PORTFOLIO LOANS for expats.

Exact quote
“I’ve also received confirmation we can no longer offer the portfolio line of Credit to non-residents. Even if I could give you the level of funding you need, I would have to do so under a standard 30 year loan contract.”

I’ve been told “its being sent upstairs for review” but like you said my main concern is if I cant access the equity from the last 12 months……what was the point of signing up and paying for St George Portfolio Loan over the past 4 years :(

All in all its a very first world problem, and we don’t have any issues in refinancing through another bank/lender, just a PITA especially as we cant move all of our loans over to another bank however as soon as August 2020 rolls around i’ll be writing a nice fat check to St George and saying see ya.

Lol the irony is we just refinanced our primary residence here in New York and could have easily drawn down up to $1m in equity here and used it for our next Sydney investment property no problems (and that’s still an option but not sure I can get 3.5% 30 year fixed as rates have moved since Yellen started jaw boning a few months ago).

• This reply was modified 7 years, 11 months ago by  DeanCollins.

[DeanCollinsParticipant@deancollinsJoin Date: 2015Post Count: 376]

June 1, 2016 - 10:33 pm

BTW don’t get me wrong this isn’t a china only thing, there is an apartment building just up the road from me in Brooklyn Heights NY that is on a short term land lease.

http://streeteasy.com/talk/discussion/24318-building-at-100-remsen-street

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June 1, 2016 - 10:27 pm

As for the breakdown of assets, no idea how that’s going to go down, my advice is to wait….you’re probably going to need that 200k to buy out your wife and as you seem to have your head screwed on right you wont want to be selling property you’ve already paid stamp duty on in order to do so……

Stick it into an offset to help you save outgoing interest payments and try to “move forward with amicable settlement asap”

This being said once you get back on your feet…..yep read points 6&7 if you try buying 3 properties with $50k deposit each like you wanted serviceability becomes the issue, do it like suggested in 6&7 AND make additional payments each month for 12 months then you demonstrate to the bank you can take on an additional place every 12 months and let inflation do all the heavy lifting for you.

Its not sexy…..but you get there in the end.

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June 1, 2016 - 10:22 pm

Wow about the AVO and losing your job with armaguard because of the need to be carrying….. interesting conundrum.

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June 1, 2016 - 5:59 am

Firstly….use a condom or be prepared to pay…..minimizing income so you don’t have to pay child support…..you sound like a dick.

This being said….and in the interest of helping you get more income so you can afford to pay child support I have a few questions.

1/ where are you living now? and do you have any equity in that property as you mention 2 x IP’s and rent….but nothing about your current primary residence.

2/ If you only have $266k mortgage @4.5% then you only have outgoing IP mortgage of around $12k a year.

3/ Your current rental income $750pw = $39k a year, allowing for expenses of approx 12k a year and interest of $12k a year then you should have $15k a year free cash flow, more than enough to be able to go to the bank for a 3rd investment property…..

4/ Why are they knocking you back? I think something must be wrong with the figures you’ve provided, you should be able to walk in drop $100k on a 20% deposit of $500,000 for IP number 3 and then have the next $400pw property (20k pa) pay for itself more or less eg $400k around $18k @4.5%

5/ Stick the 100k in an offset account “for bad times” and the interest reduction should cover costs for the next 12 months.

6/ June 2017 you’ll have 12 months growth on $530k+$440k+500k or around $70k capital growth which you can draw down on for IP number 4

7/ June 2018…..do the same, rinse and repeat.

So is there something wrong with this cash flow neutral plan OR is there something else we are missing out on?

[DeanCollinsParticipant@deancollinsJoin Date: 2015Post Count: 376]

May 22, 2016 - 1:33 am

Terryw wrote:

The clock only sets to zero if it was the main residence at death.

Interesting because in the USA cost base is zero as of death date….though we have inheritance tax if sum is large enough.

Heres the relevant ATO inheritance and capital gains page

https://www.ato.gov.au/General/Capital-gains-tax/In-detail/Gifts,-inheritances-and-deceased-estates/Inheriting-a-dwelling/?page=3

Its ridiculous though….how would someone inheriting a property be able to determine TCB…..

especially this section

Example

Continuing main residence status

Aldo bought a house in March 1995 and lived in it. He moved into a nursing home in December 2010 and left the house vacant. He chose to treat the house as his main residence after he ceased living in it, under the continuing main residence status after dwelling ceases to be your main residence rule.

Aldo died in February 2015 and the house passed to his beneficiary, Con, who uses the house as a rental property.

As the house was Aldo’s main residence immediately before his death and was not being used to produce income at that time, Con can obtain a full exemption for the period Aldo owned it.

If Con rents out the house and sells it more than two years after Aldo’s death, the capital gain for the period from the date of Aldo’s death until Con sells it is taxable.

If Con sells the house within two years of Aldo’s death, he can ignore the main residence days and total days between Aldo’s death and him selling it, which would give him exemption for this period.

If Aldo had rented out the house after he stopped living in it he could still have chosen to treat it as his main residence under the ‘continuing main residence status after dwelling ceases to be your main residence’ rule. The house would be considered to have been his main residence until his death because he would have rented it out for less than six years.

If this choice had been made, Con would get an exemption for the period Aldo owned the house.

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May 19, 2016 - 12:57 am

To be honest I’m surprised it doesn’t happen more often…..

I’m assuming would need to be an option to “not go through with purchase ” right in order to pass ATO requirements of true risk (but what the heck do I know) but I’m sure a vendor would be happy with a 10% down “option to purchase with no refund if sale didn’t actually happen after the 1st of July”.

Would such a contract need to even be provided to ATO etc eg could just be shredded after regular sales contract actually gets signed on the 1st of July.

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May 19, 2016 - 12:25 am

I’ve asked before but is there something that you can do to move a contract date…..eg if you write “an option to purchase on XYZ date” is this enough to move the date?

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May 19, 2016 - 12:23 am

Can you afford to buy a 2br(3br?) in glebe and rent out the other room(s)? when you finish your master you can keep it as an investment property and rent it out as an IP.

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May 17, 2016 - 3:17 am

get an appraisal on Sydney property and rent on the GC for a year or 3, you’ve got 6 before it becomes a real issue……

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May 12, 2016 - 5:01 am

Corey Batt wrote:

What’s the saying about price and quality though?

Probably the same people who have no qualms about paying through the nose for BMW badge instead of a Toyota…..me….I ride the subway :)

Best $2.75 you can spend and can get you anywhere in NYC in 30 mins and faster than any car or cab.

My point being is if you don’t care about 2% ROI…..then feel free to keep paying.

[DeanCollinsParticipant@deancollinsJoin Date: 2015Post Count: 376]

May 11, 2016 - 11:32 am

Thanks for confirming Benny.

Is there any way to “delay” a “contract date” eg if you did want to “delay” a sale into the July financial year can you sign “an option to purchase” in the current financial year which is then “executed” with a contract signing once the 1st of July rolls around? obviously this would then be followed by a settlement 42 days later eg the 2nd week of August?

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May 11, 2016 - 10:27 am

@jamie, I think you misread the post.

This isn’t the 1 weeks rent+gst for “finding the tenant” this is a new fee that I saw an agent trying to introduce for 1 weeks rent for “renewing” the lease + the $33 lease prep fee.

So basically for “coming up with the renewal price” and 20-40mins spent calling the tenant asking them to resign a new lease…..this agent is wanting to charge 1 weeks rent.

Basically 2% of your rent every year even if they did nothing but spend 20-40 minutes resigning the existing tenant……

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May 11, 2016 - 9:57 am

As far as the ATO is concerned the date of purchase then becomes the first date of the deposit right? eg they don’t consider the date of the 10% deposit to be the purchase date (eg if you make an small holding deposit pending finance approval)

Wondering how this is seen by the ATO if you have a long pending approval period

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May 11, 2016 - 9:46 am

@dt….a few bob? that’s around 2% annual ROI difference…..

@jaime, I guess I’m just lucky, none of my PM’s are charging me this and to be honest I’d pull IP’s from any that did try to do this. I think the PM’s do just fine on the 5% weekly cut based on what they do for it.

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May 8, 2016 - 12:53 am

Article along similar lines here dealing with The Fed – http://www.focus262.com/blog/2016/05/fed-thinks-i-should-be-spending-more-so-why-am-i-saving/

I’m doing fie with rents covering interest at the moment but am concerned that rents wont cover any upside over the next few years that will come eventually well before I can pay down enough to make up for the higher asking prices being driven by low rates and careless competition from other buyers.

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May 3, 2016 - 11:33 pm

lol just to be honest with the forum……was sure that the RBA wasn’t going to drop yesterday and shifted some USA cash to Australia about 12 hours before the announcement….lol a currency trader i’ll never be.

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April 27, 2016 - 11:07 pm

Benny wrote:

Check the situation for yourself – here:-http://www.sro.vic.gov.au/node/1873
Benny

Thanks for posting this.

Interesting that “you must self register” eg no way for govt to track if you don’t register…..

I find it very curious when govts expect you to know the rules but make no effort to reach out to you and say hey….we understand you own this and please pay xyz etc.

How is an offshore investor even supposed to know about this change if the govt doesn’t reach out to let them know?

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April 27, 2016 - 8:22 am

D.T. wrote:

DeanCollins wrote:

what the heck is an ‘absentee owners’

People who live in a different place to the property they own (ie investors)

Thanks DT….is that seriously how the Vic government describes investors… as “Absentee”.

Doesn’t sound very investor friendly to me……