Forum Replies Created
Is the ANZ Loan able to be transferred to another property. I have heard of loans being “portable”……. this may avoid the $700 sting??
Live, Learn and GrowLifexperience
Get a few valuations (RE Agents can do it in writing)now and then when it comes to sell, you can choose whichever method allowable at that time by the ATO to give you the minimum payable CGT.
More options…
Good Luck
Live, Learn and GrowLifexperience
Mum,
Well, there you go. I suppose anything is possible.
By offering finance and deposit bonds at the one place, you have probably overcome the headache that I experienced sourcing a deposit bond from somewhere separate to the lender. I had to make many frantic phonecalls and pull a few strings to get it done in under 14 days (Even though I had preapproval). I think Auctions are usually less than 7 days to come up with deposit.
The delay was in the speed that documents were processed at the Bank. A pre-approval is not a full approval (not including valuation and COS) until the appropriate documents are stamped by various people at the Bank…cheers
Live, Learn and GrowLifexperience
Great Question Misty. In the past I’ve always paid the RE Agent the deposit and they’ve held it until settlement without a second thought. I never thought about the legal requirement and the money earned from interest. I suppose because I usually negotiate a very low deposit amount.
But if I had a long settlement on a hefty deposit, this could easily add up to thousands.
If your solicitor and RE Agent can’t convince you, then I can offer my bank account as a safe place to hold it for you (he he he)
Live, Learn and GrowLifexperience
hi misty[biggrin]
You will have to ask the auctioneer before the Auction if the Vendor would accept a deposit bond.
My guess is that they would not, as auctions by nature are aimed at people who can 100% commit with a 10% cash/cheque deposit then and there.
I don’t like auctions myself. I prefer flexible terms from Vendor.[cool4]
Deposit Power are another mob that do deposit bonds within 24hours 1800 115 222.
They wan’t help if you buy using a trust and are real pains in the keesh if you buy using a company structure! I got caught out before.
Deposit bonds are handy when buying “private sale” but does weaken your offer as vendors prefer cash deposit. You will need to do some fast talking to get it over the line.
Use cash if you have it available, and you will nearly always be able to get the same property cheaper!
You also need full approval for the Loan before the deposit bond can be issued. Banks can take their time giving you full approval, up to 30 days. So it is nearly impossible to buy at auction with a deposit bond.
In fact I would love to hear from anyone that has ever done it?
Be careful, I have been caught in the middle of a “oh no, we can’t actually give you a deposit bond even though we told you before that we would” dilemma before, it’s not much fun.
Live, Learn and GrowLifexperience
Terry,
WRT – with respect toI am real, just very careful how much personal info I expose on the net for security reasons.
will contact you by email
Live, Learn and GrowLifexperience
SK2
Take out a loan with an offset account for your investment property.
Pay all your living expenses out of a separate credit card (55 days interest free)
Put your pay straight into the offset account.
once a month (or before 55 days is up) simply pay the credit card down with funds from offset account.
Maintains complete tax deductibility of loan.
Reduces interest by having all available wages offsetting loan interest.
55 interest free period further helps to offset loan interest.
No interest apportioning for accountants.
Like a Viridian Line of Credit, this needs a VERY HIGH level of financial discipline and budgeting to be effective.
only difference is that you have to manually clear your credit card once a month instead of it being automatic. But if you are watching your finances as closely as is needed, then this is only minor inconvenience.
As an investor, it took me a while to wrap my head around the tax concept of deductible debt and non-deductible debt. Some investors never do, and get caught $1000’s out of pocket because they payed down an IP loan before they paid down their own house. Or a host of other scenarios that cancel the tax deductibility of loan just because they shuffled money around in the wrong way.
What the loaned money is spent on is what the ATO look at, regardless of what security is used to get the loan.,..
….does this make sense?
Live, Learn and GrowLifexperience
Terry,
That’s why I can’t get in touch with him.Would I be able to contact you WRT changing a loan PG initially set up for me at Discover??…..
cheers
Live, Learn and GrowLifexperience
Look up “Valuers-Real Estate” in phone book to find a local one.
Don’t pay too much more than about $250 for the valuation.
Choose one that you get along well with on the phone and is sympathetic to your need for a generous valuation in order to minimise CGT in the future.
I always try to meet the valuer in person and strike up some chit chat.
Emphathise that it is for CGT only and IS NOT going to be used to get a mortgage or any other finance. This may ease their conscience in being generous with Valuation as they will not have to answer to any lenders.
Or you could simply get a free evaluation of what a real estate agent thinks your property is worth in the current market in writing. They like to give pie in the sky values that are well above realistic market values……
cheers
Live, Learn and GrowLifexperience
I always prefer property that has the potential to develop. So I would choose a potential reno with land content over a new townhouse anyday.
But if you have no intention of ever improving the property and want a simple buy and hold, with dep’n and low maintainance costs then buy the townhouse.
[juggle]
Live, Learn and GrowLifexperience
I’d guess that if anyone could get you the loan you want, TerryW would be able to!!!! Try him.[thumbsup2]
Terry,
I see you are at discover home loans, does PropertyGuru still work there?Cheers
Live, Learn and GrowLifexperience
Yep, some lenders will only lend up to 70% on properties with a large land area. Say 20 acres or more.
We had to hunt around but did find a broker who could get an 80% lend at the standard interest rate without LMI.
Live, Learn and GrowLifexperience
As an electrician I advise that the cheapo motion detectors are very difficult to adjust. You will get lots of nuisance tripping (geckos/cats/rats/possums/wind/rain/fog etc)no matter how much you play with settings. Get a good quality one installed and set up by an electrician….. or spend endless hours adjusting it yourself!
penguin chick, there should be sensitivity adjustment screws on your motion detectors. Adjust these so that you only detect human sized forms….. unless the geckos are climbing over the lens themselves……hmmmm…….maybe a guard over lens if this is so.
cheers
Live, Learn and GrowLifexperience
You could have had both your names on the title, and simply got the loan in your partners.
Good luck
Live, Learn and GrowLifexperience
Have a lawyer write up a contract as part of the sale. You could place a caveat over the title similar to a wrap scenario. Maybe ask for the 10% to be repaid in 2 years. You could word the contract so that it is paid out of a redraw on the equity that has grown in property. or have regular repayments of P+I like a personal loan.
If possible, I would try to keep title in your name until the final payment is received from the buyer AKA a wrap.
This is a lot of mucking around, so you should charge extra for this.
A lot of finance companies will lend the buyers up to 105% of the property these days. This would be better for you in terms of time and energy. Just refer potential buyers to good broker (many on this forum!)
Can I ask why you want to throw in 10% vendor finance?
Live, Learn and GrowLifexperience
I used a broker who found me insurance for a share house I was living in and renting out rooms. It was about $15,000 pa. (no misprint) $15,000!. To do it 100% by the book.
In the end I took out normal investment property insurance with one company and took out home owners building insurance with another.
If it had of come to the crunch, I was hoping to argue that because the number of tenancies in the house were less than the local councils “prescribed accomodation” min. number, that it was only a normal rental.
Also check your local states Tenancy Guidelines for the minimum number of tenancies to be actually deemed to be running shared accomodation.Maybe drop a tenant or two.
Or if you know the people, simply charge them board as friends. And insure as a owner occupied home. (I think this is ok)
I would suggest that whichever path you choose is within legal guidelines, because if the Insurance companies can find a reason not to pay you in the event of a fire, guess what!
And a warning to anyone else that is running a share house without full insurance, Have you considered what public liability you would have to personally pay if one of your tenants were killed in a fire??????
It’s not just the loss of a building you may cop!
Live, Learn and GrowLifexperience
Andrew
The Local Tenant Authority usually restrict the amount you can increase rent each time. In Vic I thought it was 5% per year, (correct me if I’m wrong?).
For me, the properties I mentioned above are located in an area with a higher yield than usual, but also with a tenant base that has a lot of ratbags, and seasonal periods of long vacancies. It is a scenario I’m happy with.
Horses for courses though, If there is high demand for rental vacancies, then you should get good tenants and a premium rental price.
Talk to your PM and even ring other R.E. Agents in town and have a chat about the rental market to get a full picture.
There is no hard and fast answer, it is relative to the market, and also to the condition and rental appeal of your property.
NOTE, Good tenants won’t leave because
of a rent increase. The cost and headache of moving usually outweighs a “reasonable” price increase.In my opinion, I think that good tenants do have a value too that should have some weight in making your decision.
Live, Learn and GrowLifexperience
If It is a nice place, then good tenants may actually be better if they have less wear and tear on the place than bad tenants.
Personally, I’d take lower rent “Good” Tenants over higher paying scoundrels anyday!.
In fact my whole portfolio has a good tenant base paying cheaper prices , when last year I had lotsa a trouble squeezing extra bucks out of ratbags.!.
Raise the rent to a fair compromise, and enjoy good times.
cheers
Live, Learn and GrowLifexperience
hi Chris,
I have found my investing portfolio accelerates dramatically if you keep your living expenses as low as possible (tolerable) and put as much extra cash into the portfolio as possible.I still rent as it is heaps cheaper. Remember 7.5% interest on $350,000 means that over $500 PER WEEK will fly off to the banks vaults. This is not deductible and has no income (rent).
If you fall into the mind-trap of wanting to own and enjoy and show-off your own home and revel in all the luxuries you can possibly buy BEFORE investing then you will walk a much slower path to wealth.
Rent or buy a cheap home, and this little sacrifice (combined with a disciplined budget) will pay off ten-fold later on.[biggrin]
Live, Learn and GrowLifexperience
thanks for advice mikala and coasty mike.
I hope to sort it out this week.
The drama has probably been a blessing in disguise as it has really shown up a communication problem between my partners and accountants involved that needs to be resolved.
I’ll keep you posted.
Live, Learn and GrowLifexperience
