Forum Replies Created
Hi Reneeshen
Firstly Happy New Year and wlecome to the forum.
To answer your question CAN we still rent that property out to tenants if we are being financed by the vendor?? The answer is it depends on the Terms of the Installment Contract.
Having done well over 200 wraps in Qld I can tell you our standard installment contract did not allow the property to be rent out with our consent as the reasons for this are obvious when it comes to possession. In saying this if the cirumstances were right We may have agreed to it so it is a case by case situation.
Richard Taylor | Australia's leading private lender
Hi Mooni
One thing i would say is make sure that your loans are structured correctly before you do anything else.
Not being aware of the interest rates you are being charged on your personal debts (but i will assume they are typical nasty unsecured interest rates) you can always look at rolling these into your home loan or to transfer the debt to an interest free period credit card as Garry has mentioned.
I can hear a gasp from here from other forum members !!!
If you do this what you should do is retain your repayment level at it was prior to refinancing meaning that the only difference is the interest rate. If this saves you 10% + then it would be well worth it.
Anything over 80% LVR will normally incur LMI however remember this is a tax deductible expense and should not deter you from moving forward. Treat it as an opportunity expense of doing business.
Richard Taylor | Australia's leading private lender
ohhh pushed the Post button too soon.
Most Accountants disclose commissions and certainly here in Qld Real Estate agents are required to advise the buyer if they receive a referral fee. Not sure about other States.
Richard Taylor | Australia's leading private lender
ohhh pushed the Post button too soon.
Most Accountants disclose commissions and certainly here in Qld Real Estate agents are required to advise the buyer if they receive a referral fee. Not sure about other States.
Richard Taylor | Australia's leading private lender
Cu
Totally agree with you on that point.
Most
Richard Taylor | Australia's leading private lender
Cu
Disclosure of finance broking commission and in fact Financial Planning remuneration is required by legislation.
I have never had an issue with it.
Richard Taylor | Australia's leading private lender
Pleasure mate.
Happy New Year.
Richard Taylor | Australia's leading private lender
On a separate thread be careful not to offer more than 10% of the purchase price by way of deposit to make the deal sound more appealing to the Vendor.
Doing this triggers problems if the settlement does not take place on the due date as the Vendor can consider the Contract an Installment Contract.
Richard Taylor | Australia's leading private lender
Hi 9ball
If you are wanting to stay in your current PPOR and wish to draw on the available equity then a LOC is the way to go.
If you utilise the offset account and then use these funds for your deposit and acqusition costs then you are using your own funds and not the lenders thus reducing your tax deductible interest.
Richard Taylor | Australia's leading private lender
Hi Shaun
You can get in the queue behind me.
PP you are right they are very good yields especially when you do the transaction in your SMSF so only pay 15% tax on the profit.
They are out there it is just a matter of looking and looking.
Richard Taylor | Australia's leading private lender
Hi James
Firstly Happy New Year to you and welcome to the forum.
It is a question i get asked by clients all the time and there are several correct answers.
In most cases clients prefer to still buy in joint names as the spouse likes to feel involved so we normally structure the Title as Tenants in Common with 99% of the shares being allocated to you and 1% to your wife.
This way you would claim 99% of the deductions and her 1%.
The correct structure will however be dependant on whether you have children and whether the property is negative / neutral / positvely geared together with factors in relation to your occupation and the liability of being sued.
More imformation would be required to give you a proper answer so feel free to shout if you would like further advice.
Richard Taylor | Australia's leading private lender
I agree with Terry.
If the asset purchased today is held for another 80 years I will let my kids worry about the legal issues because i doubt i will be here to get involved.
Richard Taylor | Australia's leading private lender
Similar to Terry i purchased a place for $32,000 Nov 2007 (Yes i now what you are going to say) and now get $388 / week on a fixed 10 year lease with lease renewals every 3 years.
Richard Taylor | Australia's leading private lender
Gladys
Firstly welcome to the Forum and Happy New year.
I am unsure as to what State you are in but just make sure that you comply with State legislation when it comes to receiving a fee for a deal and whether you need to be licensed to do so.
Richard Taylor | Australia's leading private lender
Hi Leach
We normally recommend Depro / Depreciator to out clients.
They can be found on http://www.depro.com.au/ http://www.depreciator.com.au
I have no affiliation with either but now both myself and my clients have been very happy with their service.
Richard Taylor | Australia's leading private lender
9ball
If you intend to stay in the property long term then sure pay down the PPOR and establish a new LOC which you can use for deposits and acquisition costs for new IP's.
However if you feel that you may sell the property and wish to keep it and rent it out purchasing a new PPOR then utilise an interest only loan with a 100% offset account.
Richard Taylor | Australia's leading private lender
Are you happy to use an Property Manager.
If yes try Tania at Mayfair in Clayfield who can be contacted on 07 3262 4533.
They have a number of Commercial properties they manage.
Tell her i referred you and she will look after you.
Richard Taylor | Australia's leading private lender
Taken straight from the new legislation:
Limited Recourse Finance – the funds are advanced on a limited recourse basis. This means the only amount you stand to lose is your original deposit, therefore protecting your other assets from creditors. Due to the increased risk to the lender, the Loan to Value ratio (calculate by dividing the loan amount by the property value) will be lower.
- Commercial Maximum LVR is 70%.
- Residential Maximum LVR is 80%.
Richard Taylor | Australia's leading private lender
Phil
I thought the new legislation limited the gearing under a SMSF utilisjng Debt Instalment Trust to 70% for Commercial property ?
I have done one for my own SMSF but the was under the impression the recent SIS amendment lowered the LVR for Commercial securities. I appreciate however it is 80% for residential property.
Richard Taylor | Australia's leading private lender
PosE
Would need more information to answer that one.
Depends on what the split between the 2 would be.
Unlikely to get more than 50% of the business value without other security and assuming it is not an accepted franchise.
Richard Taylor | Australia's leading private lender
