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won’t provide any advice…but a few things to note/think about.
1. are your redrawing from your PPOR to access the 20% deposit? if so-speak to your accountant as you may not be able to claim the interest on the 20% part you borrowed…
2. If done correctly you can essentially borrow 100-110% ( stamp duty) of the property value and claim the full interest.
3. split ownership sounds good …but what are your plans for the future – ie will your husband alwasy make more in the future? willl you guy be having or expecting child in the near future- maybe the income will be $0 and $80k by then….consider the pro and cons of a trust ( not right for everyone…and im def NOT recommending a trust structure) – keep your option open and plan ahead..
4. How negativity geared are you? with a $385 purchase and $350 p/w rent…depending on the area and property type + an 80% LVR loan….in some case you may be geared for the first 2-3 years only?
5. How much depreciation is left…what’s your expected tax return ( lost)
Plenty to think about..change accountant if you think she/he is not “” with it”
Regards
MichaelMick C | Shape Home Loans
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wiebke.cz wrote:what's your criteria to consider someone a bloody good conveyancer?– Answers and responds to calls/email in a timely manner
– Keeps me in the loop and regular update
– Honest and a straight shooter
– Experienced with a variety of clauses, sale contract, section s149, different type of title system and understanding of trust and legal ownershippersonally i dont expect my lawyer to give me advice on property investing ( would be good- but you may be searching for a while) ..as long as they execute their job well- ill leave the tax to the accountant and the property investing side of things to my own experience or my property mentor.
Mick C | Shape Home Loans
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QM wrote:Hi,
Not much that $100k can do considering we like northern beaches.I know replies will be dependant upon what our goals are but we are flexible. We are prepared to live here and invest to if potential is to be made….or vice versa.
.100k is plenty, as im presuming you be leveraging the rest from the bank ?
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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umm can i ask why you need your conveyancer to have personal IP experience???
wouldn’t you rather a conveyancer with plenty of experience in property transactions and legal paperwork ???End of the day, the conveyancer is not going to tell you if it’s a good buy or not…and what you can claim etc..
I can recommend you to a conveyancer who has 1 IP, he wouldn’t call himself an experienced investor…but his a bloody good conveyancer.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Just as a side note- you mentioned you have 5% savings….are you going to be capping the LMI ( borrowing) or do you have enough funds for the LMI as well?
95% Lend is not impossible as you only had 1 in the last 18 month….but also it wont be a walk in the park; and it will also depend on a numerous number of factors; so hard to say.
But if your going to go for 95% + LM = essentially ~97% then i would reconsider…
Regards
MichaelMick C | Shape Home Loans
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don’t know about buying with only a 3% deposit…
As Jamie mentioned it’s MAX 95% + LMI = ~97%But i have to be honest it’s not an easy loan to get approved!! your file needs to be water tight!
^^ pop Jamie above an email; great broker!
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Yes you will need strata before you can change the title from DP to SP or community title etc…
Cost- depends on what your unit has already…my parents applied for strata title on their block of 8 back in 2001 that was located in Cabramatta…costed them $150,000 as they had to get fire doors replaced in each unit, new drainage , lots of plumbing work, had to add carports ( 1 per unit), a in built laundry for each unit ( cupboard laundry).
So it depends on your council’s requirement and what your unit’s current attributes.
Mick C | Shape Home Loans
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They been speaking abt a 2nd airport for YEARS now!!! nothing new…+ i doubt they have the money to build it ..just look at what happened to the epping to Parra train line??? say they will build it to boost their votes in North west- once they get in ” sorry no funding for the budget…”
Regards
MichaelMick C | Shape Home Loans
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Processes in getting the loan approved and buying a commercial property is very simliar if not the same..
Mick C | Shape Home Loans
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Yes bank do look at it slightly differently – Lower LVR, depending on the property type the rental income can be discounted by 50% for serviceability + not all banks will accept the commercial security – ie diff bank have diff niche when it comes to commercial.
Example:
ING commercial hates hotels while ANZ has a niche for it and would offer a competitive rate + a great LVR.
Here a list of commercial type properties + business loan as a guild
http://www.shapehomeloans.com.au/commercial-loansI terms of responsibilities as a “land lord” i would say it’s the same…take care of your tenants and they would take care of your asset.
Regards
MichaelMick C | Shape Home Loans
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I think the solution lies deeper then just selling half the property; that also seems like a band-aid solution…
How can you afford to buy that 50% portion back with no income? how long can the $200k last you…also not sure which road your going to take but be-careful of all the cost to sell, Capital gain tax and buy cost and legal cost- this could eat up quite a bit for such a simple transaction.Have you consider selling the property outright and renting or seeking gov assistance…since it’s asset and mean tested selling “may or may not work”…
I would seek financial advice on your situation; there are places that are happy to provide free financial planning advice and help if required – ie salvation army financial services.
Regards
MichaelMick C | Shape Home Loans
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with that sort of income x 2 …5% shouldn’t take too long.
Unless you have some friends /family that’s willing to lend you the 5% you could go for a Non genuine savings loan.Regards
MichaelMick C | Shape Home Loans
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As Richard mentioned, hard to give you a definite rate without knowing a few more details….
There are tier 2 commercial lenders who are offering 6.90- 7.35% fixed for 1-3 years for commercial property at LVR of 65% for the right client , conditions and security type.
I suggest you contact Richard above with a bit more details and he should be able to provide you with a few options.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Call David from D and L partners – http://www.dandlpartners.com.au/ – they specialize in property tax and any trust set up including SMSF.
– 0432 766 766
– [email protected]Let them know Michael Chan From Shape Home Loans reffed you and they will look after you.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Good work!
Would love to see the pics – could you email it too [email protected]
Cheers!
Mick C | Shape Home Loans
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Ill list the pro/con of each structure – hopefully it provides a solid answer to your questions…
The trust i be focusing here is the common FAMILY trust only + with a personal trustee ( compared to corporate) – another trust and structures works differently and have their associated pros and cons.Buying under personal—-
**Pro**
– Land tax threshold
– Negative gearing benefits
– Capital gain discounting/ waived
– Deprecation
– Any lost can be carried forward to your personal income assessment
– No maintenance cost / set up** Con**
– Profit taxed at personal full rate, so if your a high income earner then it’s >40%
– Income split and tax benefits are set as per sale contract
– Personally liable for the property/mortgage— Buying under Trust with Personal trustee—
**Pro**
– Not personally liable, the trust is – which is a separate entity
-Ability to split the income as you wish to the nominated beneficiaries
– Being a separate entity the land tax threshold starts at the bottom again ( only a pro for investors with over 1.5M in property under their personal)**Con**
– Any lost can NOT be carried forward towards your personal income assessment
– Maintenance and set up cost (low)
– Capital gain tax at full rate—-
Regarding what your accountant is saying- it’s hard to comment as your accountant is the professional + he knows your personal circumstance. But taking a punt – > If the property is NOT positive geared enough then you will NOT see any benefit using the trust BESIDE the asset protection benefit.
Example: ( average cost/ sample only)
Rent received – $300 per week = $15,600 PA
Depreciation benefits = $4000 PA
Interest repayment = $11,000 PA ( 6.55% -80%LV)
Bank fee and charges – $300 PA
Maintenance issues/strata/ repairs/ Agent fee- $2500 PA
Insurance- $500 PACash flow = $2,700- ( Negative)
You will get $0 from the trust, as this lost can not not carried to your personal income.
It will take a while before your rental catches up to become positive.Your accountant saying $70,000 is a bit “open”…he should have told you and given you a figure for the rental yield.
Because i can can have $70k income in rental btw 2-3 properties and still make a lost, but with 2-3 properties it will be much quicker for the rental to catch up.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Richard will be able to point you in the right direction.
But as Jamie mentioned, don’t over stretch yourself ….
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
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Jamie is right.
Emerald and Gladstones are two of the fav hot spots for positive geared investors! but it comes with it;s associated problems
1. Not easy to get 95% funding for these areas especially with tight serviceability
2. Valuation is alwasy a hassle and takes a while to come back for both these ares + seems to fall short 75% of the time due to the fact the property price are driven by the rental yield and stability of these rent.Hopefully you haven’t signed the contract yet..
Regards
MichaelMick C | Shape Home Loans
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So it’s a block of units 3 x1 bedroom?
if it is a block of units then the sale price will be based on rental yield, conditions and development/renovations potential …generally speaking.Block of 3-4 are a investors dream market, especially if it’s located in a good location, and if it’s bring rental yield of 6.5%+ then i wouldn’t low ball too much.
Before making a offer, make sure you gotten your finance in place and the lender/bank understands what sort of property type your buying; as it may not be suitable for some lenders and LVR may be restricted.
http://www.shapehomeloans.com.au/finance-for-multiple-unitsRegards
MichaelMick C | Shape Home Loans
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Hard to say without knowing the area, property and demand of the area…but for me personal; if i see a property with the above range, i would offer $460,000 the offer is not that much outside from the “targeted” range + it’s still a serious offer ( didn’t low ball too much ) – Also dont be put off by the advertised range- i seen plenty of property go over !! and on some odd occasion under.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
