Forum Replies Created
Just need to get something straight – do you intend using funds which are in an offset or other account to pay off your hecs debt (perfectly fine) or increase your debt on an ip to pay off the hecs debt (which would still remain non-deductible no matter how you package it)?
banks don’t have money of their own, it comes from various sources like deposits, shares sold/equity raising & borrowings from the money markets.
If a bank has a margin of 1% that would mean 25% or so above the 5% that the reserve bank has set as their rate.
try to avoid cross-collateralising the properties as you should have adequate equity to have a loc. Also establish a 100% offset account to reduce your interest and allow redraw freedom.
if you get a building or pest inspection, they are generally precluded from carrying out the work due to a conflict of interest. Using a builder to inspect & quote may not provide you the peace of mind for the pest/building inspection but only guide you on cost. There is no obligation to use any builder.
you could be lucky enough not to suffer a tax audit but then again you could. Is a spell for fraud seriously worth the risk?
Sorry, I misread the size of the build (2 townhouses not 2 x 2 townhouses). Sounds a bit rich for my liking (you're not going to make money if each t/h is going to cost $500k + land.
Get the consultant to reengineer the price down to below $300k each (or some other figure which would work for you).
Unfortunately your HECS debt is not tax deductible nor classed as an investment for the purpose of increasing the debt on your IP. If you roll your HECS debt into your IP loan, the interest on this portion will remain as unclaimable. The HECS debt is adjusted by CPI which is alot less than your rate of interest (moreso depending upon your marginal rate of tax).
My data (survey Aust. Property Institute) gives Melbourne sitting at 9.00 for April 2010 and only 10.00 for 2011 and 11.00 for 2012. So by its reckoning, there is at least another 2 -3 years growth however you'd be looking to get out by mid/late 2011 so you don't get stuck in a turning market.
FYI read some of the litigation against various banks in the 1990's which did this – borrowed at very low rates, then the dollar dropped through the floor. Borrowers were stung in a big way because the banks did not inform them of the additional risks due to the source of funds being subject to currency fluctuations.
DWolfe wrote:LOL*Blamed*
Nice blog Scott No Mates.
D
More like my rant for the week.
Hi Sri,
I am aware of some reasonably good investments down that way (in one of the areas nominated). Are you limited to this budget or can it be stretched? Will you cross state borders for the right deal?
Generally, a BA is paid by the buyer hence ‘buyer’s agent’. A BA must be a licensed agent.
PM me for details.
Why would the vendor (seller) have sought an extension to the cooling off period – it is not in their interest to have the house still 'hot'. The cooling off period is for the buyer not the seller, the seller has to agree to extend or have the buyer withdraw.
The contracts have been exchanged, this triggers the cooling off period.
Any offer received during the cooling off period cannot be accepted until after the contract is recinded.
you’re talking $1000/m2 & that’s just the building area.
Now that’s $250k/dwelling, add your extras & land value & deduct from sales price. Does the gross profit meet your requirements?
If it is not a project home, it sounds reasonable but check it against a QS website like bmt etc who have a free online construction priceguide or get your consultant’s feedback whether it represents value.
I'll add to my previous diatribe (thanks to the later posters):
10: Blame the renters – they expect too much!
11: Blame the investors – who, because they cannot buy where they want to live, will rent where they want to live & buy investment property elsewhere locking others out of the market. (http://smh.domain.com.au/blogs/talking-property/a-renters-dilemma/20101101-17a7w.html)
12: Blame the government – if it wasn't for their policies of increasing population & densities we wouldn't have all this additional competition for the existing housing stock.
13: Blame the government – just not enough places at Uni to make everybody a doctor or lawyer so that we can all afford to live in a McMansion
14: Blame (your preferred deity) – why are there only 67 true beachfront houses on Sydney Harbour
15: Blame somebody else, afterall it is never your own fault that you are unable to achieve your dream!You wouldn't necessarily put it straight back on the loan but might consider putting in in a 100% offset against your home.
You can’t go to market without a contract. So the searches won’t go to waste.
good to hear.
paulie, there are plenty of different software available eg posh, property manager pro, rentmaster etc, they’ll set you back around $150 so not a big expense.
Tips for young players: the managing Agent is not entitled to commission unless you have signed a management agreement!
For the sake of the exercise, get the agent to carry out the condition report & sign the tenant to a new lease – possibly forego an increase. Have the agent fill in the transfer of bond form. Then terminate the agent.
Get yourself a copy of the rental guidelines from Fair Trading.
If the tenant pays cash/cheque, you will need to issue receipts, eft doesn’t need receipts.
You are creating a new block.
What are your compliance issues? Are the two dwellings fire separated? Does each property comply with the BCA? How is the house currently wired? How can you achieve separation of services eg power (will require 2 lots of meters & separation of power to each unit), water – (may need to replumb large sections of the house to separate supplies), gas (need to have separation of gas lines to each house). Each of those suppliers will only bring one of each service brought onto the property then split to each house.
Council approval – how long is a piece of string, if you provide them will all of the information required, pay all fees, get in with plenty of time before the matter would go to a council meeting (if required) or delegated authority – less than 2 months. If you have to reply to each of the council's questions individually 40-60 days (+ the time it takes for a letter from the council & a response from yourself addressing each of the issues raised).
