If it's 90% complete you might be able to obtain a formal approval – it will come down to the valuation (which I'd have your broker order upfront if he/she can).

Just had a deal approved for a forum client purchasing an OTP property in Melbourne that's at about the same stage as yours in terms of completion.

Cheers

Jamie

iccd wrote:
can anyone recommend a good property lawyer who is good value rather than being overpriced? I have heard some lawyers charging $500 for conveyancing services, but I got charged more than double for the conveyancing.

$500 – that sounds extremely cheap to me. Even at double it's still quite reasonable.

Cheers

Jamie

Hi Rick

Deductibility is determined by purpose.

At present, only the $496k would be deductible.

If you increased the loan to $640k – what would the additional $144k be used for? If it's used for a PPOR purchase – then it wouldn't be deductible. If it was used for IP purposes, it would be.

Cheers

Jamie

Lalibella wrote:
Mining.  NSW

OK, that explains it. They can be quite volatile – in both yield and property values.

Is the PM confident that they can secure another tenant if this one decides to walk? 

Cheers

Jamie

I've never heard of such a big drop in rent. What's the vacancy rate like?

Cheers

Jamie

OK – sounds like a bit of a mess. First thing I'd do is split the loan out so you can distinguish the original loan (the 67% LVR) and the new loan that you've set up (the equity release) which has been used for personal expenses. 

I'm not an accountant but at this point it seems to me that you really need to be able to identify what's deductible…[Read more]

Hi Dennis

Just so I've got this right in my head – are you saying that you paid a loan down to an LVR of 67% and then carried out a refinance to access additional equity – and the equity that you've accessed you've parked in an offset account and have used for personal expenses?

Cheers

Jamie

If the current agent isn't performing than I wouldn't have an issue with switching up.

Have you raised the issue with them?

Cheers

Jamie

That's right – forgot about that little detail.

An offset account will only be provided by a normal lender.

Cheers

Jamie

No worries.

The main thing they want to see is that you can service the debt, have a deposit, don't have a heap of bad debt and no defaults on your credit file.

Your overall asset/liability position relative to your age comes into play – particularly for credit scoring. However, I haven't had too many issues in the past where I'm arranging…[Read more]

Hi Kali

No worries at all – I'm glad you found it useful

Yep, ideally the loan should be set up as interest only (do you don't pay off any of the principle) with an offset account linked to it. Instead of paying down the principle each repayment – you simply place that money into your offset. The more money you have in the offset, the less…[Read more]

Hi Jon

Given that your current PPOR is going to become an IP – I wouldn't pay down any of the debt. I'd continue to do what you're currently doing – park money in the offset – and then move these funds onto your next PPOR when it's time to purchase.

Equity is calculated by taking the value of your property and multiplying it by the lenders max…[Read more]

Hi Kali

I wouldn't pay off your IP debt if you're planning on buying a PPOR in the future.

Instead,  park money in your IP offset account now – and then move these funds onto your PPOR loan when you purchase it.

That way, you're bolstering your tax deductible debt back up whilst lowering your non deductible PPOR debt.

This article I wrote for…[Read more]

Hi and welcome aboard.

If I had to choose either, I'd go for an apartment in a smaller complex over the larger one. With large complexes, you can find yourself competing for tenants and potential buyers if you decide to sell up. A few quick fire sales in the big complex can also cause the value of your property to decline.

Cheers

Jamie

They will do a search on the companies ABN but they won't delve into its financials if you're a PAYG employee.

Like Richard said – if there's a probabation period and LMI involved then you'll just need to be a little careful in who this deal is placed with.

Cheers

Jamie

My thoughts are that cashflow is great – if a property is putting more money in your pocket than it's taking, that's fantastic. However, if the property isn't likely to go up in value – then it can be difficult to reach your goals.

Unless your investing in a mining area with high yeilds (but come with their own risk) or properties that are…[Read more]

Agree with Terry. I can understand the need to balance your negative cashflow but without any growth, it's hard to get ahead in property investing. 

Cheers

Jamie

pagey_1 wrote:
Hi Rick,

Im in the same mind, great idea but a bad investment. money could be used better elsewhere but you have got to have a bit of fun and relaxation. Especially if the place is cheap and can still gain you equity. Ive been talking myself into the idea for months!

Cheers
Pagey

If you can afford it – then why not. Sometimes…[Read more]

pagey_1 wrote:
Oh ok i didn't realize they varied i thought they would all have a postcode restriction if one had one. Thanks!!

Lenders like CBA and Homeside who have a DUA with Genworth will look at deals in any location up to 95% – but the valuations still need to stack up and it can be hard to get comparable sales in certain…[Read more]

Hi Nathan

Your plan of attack sounds pretty good – looks like you've done your research into correct structuring. My only comment is to leave enough of the loan variable so as you're not in a position where you have a surplus of funds that could be offsetting the loan sitting somewhere else.

Cheers

Jamie