Hi Daniel

I agree with Josh on this – the best person to seek advice from is your solicitor. Unfortunately most OTP contracts are water tight and very difficult to get out of – hopefully they can discover a way.

Cheers

Jamie

Josh Atherton wrote:
Nathan, 

it was done a lot in the mining towns where this difference was huge, buyers can see through it pretty easily by analysing the current rentals on the market and comparing them to what the property is receiving. if theres a difference, they will factor that in to their negotiations. 
 

Yep – it was. A lot of…[Read more]

1. Yes, it's possible and happens quite a lot. I just helped a first home buyer purchase her parents home for $100k less than market value. It's called a "favorable purchase" and the bank will go off the valuation of the property (rather than the purchase price) to determine the Loan to Value Ratio (LVR). So for the person that I just wrote a loan…[Read more]

Hi there

It won't effect the valuation. However, the valuer will declare what they believe the market rent for the property should be which could come into play if it seems that the rent you're receiving is way over market.

Cheers

Jamie

Contents insurance can be handy. I had to make a claim recently on an IP where the tenant didn't hook up the washing machine correctly and caused a fair bit of damage to some carpet. The insurance company paid out – the tenant reimbursed for the excess. 

Cheers

Jamie

You might be able to apportion the fee since there's also a PPOR loan in the mix. Mention it to your accountant and see what they say.

Cheers

Jamie

Hiya

There's no set formula for how much a property needs to be discounted by before it represents good value.

I wouldn't even focus on trying to get a specific discount – doing so may cause you to disregard other important facets of the deal.

If you find a property that suits your criteria – your due diligence will help you ascertain whether…[Read more]

PLC wrote:
Hi Lak,

You also need to take into account costs such as stamp duty, etc which will eat into the deposit. Also in Vic as of 1st July, the government has abolished FHOG for established properties and it only now applies to new properties, so it were counting on that, you would need to re-assess.

Cheers

Tom

Yeah it's a bummer. I…[Read more]

Hi Se7en

Valuations don't have anything to do with serviceability. 

Serviceability is demonstrating to the lender that you can afford to make the repayments based on your income/liability situation.

What is it your friend is trying to build?

Cheers

Jamie

Servicing sounds very tight – and just because a bank will provide the money doesn't necessarily mean you can afford it.

Look at your household budget and list all your expenses down to the dollar – from there, you can work out how much you can put aside for mortgage repayments.

When calculating your mortgage repayments – use a higher rate (say…[Read more]

+1 for Darryl.

Cheers

Jamie

Hi Donna

Only you can make the final decision. Sounds like you've done your due diligence – and for what it's worth, that kind of body corp fee isn't unusual.

However, if you're having doubts and/or will struggle to sleep at night then don't jump into it. It won't be the last property to go up for sale.

Cheers

Jamie

Ahhh geeze – my knowledge of tenancy laws and terminology only stretches so far. Best to give them a buzz and ask for confirmation.

All the best and enjoy your time in Canberra – it's fresh this time of year!

Cheers

Jamie

pagey_1 wrote:
This may be a stupid question but on the note of equity. If i have a mortgage of say 100k and borrow an additional 40k (from equity) do my repayments increase to cover the 140k debt or do they remain as the same as if i had 100k debt?

Cheers
Pagey

A bigger loan means bigger repayments

Cheers

Jamie

ING's offset works well – I use one personally.

Give them a buzz and ask about the option of switching to a product with a linked offset. 

Cheers

Jamie

Hi Sparnar

Sorry – are you living and investing in Australia or are you living and investing in South Africa?

I read the post as if you were a South African who's living and wanting to invest in Australia. 

If the latter- disregard what I've said – I don't know the finer details of South African property financing. The Aus market keeps me busy…[Read more]

The good old Walkie – it's been about 10 years since I've been in one of those! I still have good friends in Durban and Cape Town from my London days.

If you've got a mortgage on a main residence in Australia then I'd be inclined to not pay down your investment property debt.

The main reason is because investment property debt is tax deductible…[Read more]

Hi Trent

The structure doesn't sound too good.

Redrawing from the now IP loan to purchase the new PPOR could have tax deductibility ramifications.

Basically, the only funds that would be deductible is the original loan securing your now IP before you redrew those funds.

By redrawing those funds you've mixed up deductible and non deductible…[Read more]

Hi Sparnar

Welcome aboard.

Are you currently renting or do you own a home? If owning – does it have a mortgage?

If renting, do you plan on purchasing your own home in Australia one day?

These are important questions that will help you decide whether or not paying down your investment property debt is a good idea or not.

Cheers

Jamie

I don't know if it's because I'm from Canberra where everything is expensive but $2k doesn't seem too unreasonable for that amount of work – looks like there was a fair bit of painting involved. I received a quote from a local painter for a relatively small area of a Canberra IP and it was more than $2k for that job…[Read more]