Forum Replies Created
As has been noted above it is the purpose test that dictates the deductibility of the interest.
In saying this i would not be using your PPOR sole to fund the IP or indeed cross collateralising the 2 securities.
A mix and match of an equity loan and a standalone loan secured against the IP would be the way to go.
Once the IP increases in value a little bit of debt recycling to pay down the PPOR loan and you will eventually end up with a IP solely standalone.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Matt
The First Home Owners Grant is a Federally funded Grant adminstered by the individual States.
It is $7000 in all States however certain States provide an added bonus to compensate for you having to pay Stamp Duty (In states where there is No FTB Exemption) or to encourage construction.
You would not receive the Grant on a blocj of land alone.
If the property is under construction and you are buying it as a completed package then the Grant will be available on Settlement. Should you be constructing on the land then the Grant maybe available at the time of the first drawing.
As i say it is administered by each State so for absolute clarification check with the OSR in Vic.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
If you could make them individual purchase contracts although all conditional upon each other settling then you could still do standalone loans.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Angel you are braver than me.
I couldnt understand a word of the post and gave up after the first para.
If jelovea would like to repost it in a format most of us could understand i think she would get some additional responses.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
On the basis they are individually Titled and the Contracts allow for them to be sold individually I would look to use a couple of lenders and having each loan standalone.
If they are sold as non strata title block or on a single purchase contract you dont have much of a choice i hate to say.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Joy
Firstly welcome to the forum and i hope you enjoy your time with us.
I dont want to put a dampner on your investing dream but from a quick number crunch i cant see you having any chance of showing satisfactory serviceability for additional borrowing even given the potential rental income.
Obviously without being aware of the complete picture it is difficult to analyse fully but from the base numbers you have given you would not qualify.
Before you go the expenditure of setting up a Pty Ltd Company / DFT I would check your borrowing capacity first as it will save you a few dollars in set up fees.
On a separate note assuming serviceability is evident then yes you would try and access the deposit (10-20%) plus acqusition costs from your PPOR and take out a standalone loan on the new property. If you have cash savings these should be placed in an offset account linked to the non deductible debt.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Larry all depends.
By all means manage your own portfolio and save circa 8% but remember the tenants will be calling you at 8pm on a Sunday night when the stove wont start or the tap is dripping. You will also have to collect the rents advertise for new tenants at the end of each lease etc etc.
I started with a property manager after 1 property and now with a portfolio of 40 i employ 1 full time.
Yes i could do it all myself and save a couple of quid but in the big picture it is a deductible expense and parramount to my business model.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Zoe
I am assuming you are looking to refinance in order to release some equity.
Hate to say your Broker is incorrect and not every lender uses the same valuer.
Admitedly depending on where the security is located you might find the options limited however without more information it is difficult to comment.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Christina
Sure feel free to drop me an email and I can make some constructive suggestions.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
No you will be paying it on $50,000 less of course certain adjustments.
Doesnt matter what you do with the cash you still pay Tax on it.
Think you are getting confused when it comes to selling a going concern business.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Guys i hate to say i get approached at least weekly at the moment from people asking for me to Mentor them and I just cant take any more on at the moment.
Other parts of my business are so busy that there are just not enough hours in the week to do everything.
If time allows in the future i would be happy to take on more students.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Nicole
Hate to say in the current climate you wont finance a deal thru a traditional lending source on a no money down basis especially under NCPP.
FHOG Pty Ltd which is a specialist Vendor Finance Company and 1 i have been a Director of since 2000 had over 180 properties under wrap at our peak and is the largest provider of vendor finance in Qld. We no longer seek new business (although of course the demand is ever increasing) and merely manage our own portfolio of deals.
As Paul has pointed out the only options these days with the tightening of Credit are Instalment Contracts and LTO (License to Occupy in Qld) / Rent to Own.
The current climate the number of vendors prepared to offer such a product due to a combination of legislation and cash flow.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Maximum is 40 years but in saying that limited to a couple of lenders.
25-30 is the norm.
Although of course on an interest only term the length of the loan is imaterial.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Christina
If you sell the property now there are no Tax consequences as the property is your PPOR.
If you decide to sell it in 12 months time then:
1) Rent received will be added to your income for the period.
2) Interest, Council Rates, Insurance, and other cash and non cash expenses will be deducted from your income.
You will receive a Tax credit on the adjusted income.If you own another PPOR then you will pay CGT on the difference in price between the end sales price less adjustments and the value of the property the day it became available for rent less adjustments.
If you dont own another PPOR then you wont pay any CGT on the sales price.
As to which way is better it is like asking which piece of string you can see is longer you cannot answer without knowing more information about your personal circumstances.
Certainly if you feel the market in your area is flat then why not keep hold of it for a while and sell it of when market conditions improve.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sure you can still just about borrow using a Hybrid Trust (from memory there are 3/4 lenders with vary rates and terms) but in saying that whether that will be the case when you come back for a top up in 12 months is a different kettle of fish.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Massive difference between a Mortgage Broker and Mortgage Originator.
Crusty very true but ever tried to get a deal past Westpac Credit at the moment?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes Robbie you still qualify for the FHOG if you buy 10 IP's first and the 11th is your PPOR assuming you have never owned a PPOR.
Doesnt make any difference whether you have a Lease on your rental property or not the law requires you to occupy the property for 6 continous months commencing within the first 12 months. If the property is tenanted and it means you cant move in for 10 months then that is fine.
Only thing you need to bear in mind about buying an IP first is you will loose the Stamp Duty discount / exemption on most States.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yep we have so much luv to share round in PI.com
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Lora
Hope all is well in UAE.
Thanks Lora appreciate the referal.
Rather than get your friends to post their personal details on an open forum feel free as Jamie mentioned to get them to email me directly.
By the way just had my first deal this weel from an Australian lady living in Finland so Yes be suprised how many Ex pat clients i have especially in the Middle East.
Talk to you again soon.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Sorry Jamie cant be much help here.
In Brisbane NOBO's arent that popular.
In fact i lashed out this year and installed heating for all of the family………i bought them all a jumper and told them only to wear it on days if ever fell to below 16 degrees…….
Oh to live in Qld.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
