Forum Replies Created
@terryw would a claim for Adverse Possession be possible in this situation? The full rates have been paid by the owner claiming adverse possession. The deregistered company has never paid any of the rates or has had any involvement with the property.
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auThanks @terryw. I should have also mentioned that the owner is a private company that was deregistered in 1995.
Can they be sued for all the fees and taxes already paid?
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auHi TFE
Why not keep the current unit and keep drawing on the equity to purchase more IPs?
And once you move into the new unit move all the funds from the offset account of the current unit to the offset account of the new unit (since it will be your PPOR). No need to pay down the mortgage of the new PPOR. This way you will always have access to the funds but at the same time lower your interest.
Andrew
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auFor 1x PPR and 1x IP a Trust/Company is overkill. As you get more properties you can consider a trust for tax reasons as Corey mentioned.
It also depends on your profession and whether there is a high chance for you to get sued.
Andrew
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auI think you should hire a real estate agent who will you with guidance about investing in the property.
Yeah maybe this is not the best advice on here… why don’t you let a car sales man fix your car at the same time?
The only person you can trust in any business transaction is yourself and someone who makes money if you make money (that is someone who gets a cut from your profit after you have been paid).
You said that you are new to property investing. In that case I would spend at least 6 months educating myself using books, going to events, participating in forums like this one (Not just asking questions but also reading questions and answers from other forum members. There is a lot you can learn from that.). This will make you more comfortable and get you used to the terms used in property.
I’m sure not many of the property experts on here got to where they are by paying 1000’s of dollars for these courses.
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auOther than the financial benefits, another issue to keep in mind would be CGT.
If it is your PPOR then you are CGT exempt. However, if you rent it out then you will have to pay CGT when/if you do sell it.
Andrew
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auAny help would be greatly appreciated. I can’t explain the anxiety of not feeling 100% prepared in terms of knowledge and the idea of saying no to a potentially really awesome deal because I simply didn’t no better.
Sometimes saying no to a potentially awesome deal is better than saying yes to a potentially bad deal.
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auIf your son is working full time couldn’t he just take out the loan himself and have you as guarantors?
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auI want to buy a house or unit which is best?
Depending on your budget and location but generally:
1. House
2. Townhouse
3. UnitCheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auAre you still working in Russia and when are you moving to Australia?
You could have purchased the property before coming to Australia and could have easily obtained a loan at 80%. You just need to show proof of your Russian salary.
Turns out all Chinese buyers buy without any mortgage in Australia! WOW!
I have many Asian friends, I helped purchase Australian properties. None of them used more than 20% of their funds. They could easily borrow 80% of the properties value. As long as you can proof that you have a salary.
Will you have a temp or perm visa when you come to Australia? This will determine what kind of property you can purchase?
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auKeep in mind that this is in a building with many apartments and many different owners. It is quite unlikely that at the end of the contract, every owner will vote to not renew the contract. Be careful in assuming the use of the property will become normal residential at the end of the contract. Many a person has been stung by this assumption.
Do all the owners need to agree not to renew the contract? I guess you would need to read the contract in detail.
Given the current yield of the property I don’t see it that unlikely that they wouldn’t vote to renew it.
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auSorry I didn’t get the contract part.
Investors have difficulty estimating the value of a property today but you want to estimate it 7 years into the future. Any answer you come up with will be heavily reliant on your assumptions.
If your strategy is to buy this property with the contract at a discounted price and then sell it when the contract expires then you can:
1. Figure out the value of the property today without the contract using comparable sales.
2. Estimate an average capital growth rate for the next 7 years. (Here you can’t just take an average capital growth rate that includes houses, townhouse and apartments. It should be specific to the property type and number of beds)
3. Apply the cap rate to the value of the property without the contract.Then you can use that value, the purchase price and holding costs to estimate the ROI.
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auSo you are asking what the price could be in 2022 with 0% capital gain? The answer is the same as today.
Regarding ROI: The property is running a loss of $3070 p.a. and assuming 0% capital growth, the ROI will be -ve.
This is a negatively geared property and you would solely rely on capital growth for returns.
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auNet Yield + Capital Growth = Return. Both are important but not equally probable.
You could get a 10% return in either of the following scenarios:
1. Yield: 5% and Cap: 5%
2. Yield: 6% and Cap: 4%
3. Yield: 4% and Cap: 6%
4. Yield: 8% and Cap: 2%
5. Yield: 2% and Cap: 8%
6. Yield: 10% and Cap: 0%
7. Yield: 0% and Cap: 10%One thing we know for sure from day one is the Net Yield of the property (not exactly but close enough).
Capital growth on the other hand is just an estimation. Could be 10%, 7%, 0% and even in some cases -5%. Most of us like to think that our property will grow annually by at least 7% if not more. That’s normal. We are only human. We expect +7% capital growth and disregard the fact that it could end up being 0%, when we should be hoping for +7% but be prepared for 0%.
However it would be common sense to focus on what we know and what we can control to maximize our return and minimize our risk. We have limited knowledge and most importantly no control whatsoever over capital growth (renovations/improvements/additions can result in an instant boost of equity but they stop there and don’t continue annually and require more funding to begin with) so why place all our eggs in that basket.
REGARDING BANKS AND LENDING
A bank’s job is to manage risk and they are good at it (excluding US banks… :) maybe they got better now). Banks are better at managing risk than us. So if they don’t want to lend you money that kind of tells you that you are too risky for them, based on their lending policies. Of course you can go to another lender with less stricter lending policies, and increase your risk, but at a certain point that strategy will stop.REGARDING LONG TERM INVESTORS LIKE STEVE
Investors like Steve accumulated dozens of properties, within a few years, 20 years ago when the property market was different. Now competition among investors is higher (who follow those strategies) and the economy and government policies are different. Those strategies won’t get you the same number of properties in today’s market.Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auLets say Property value is $180,000 and Deposit you have is $18,000… You still come up with all the savings for Establishment cost such as Stampt duty, Pest and Building Inspec, Real Estate Agent fees, Conveyancing and Borrowing cost.
Why are you paying RE fees?
Given the above example how can you tackle on going cost????????
What do you mean by “tackle”?
You need to calculate all you cash outflows and inflows like you did above. If outflows are greater then inflows then it will come out of your pocket. Not sure what you mean by tackle?
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.au@mushirkhan have a look at https://property-analyser.com.au.
It does all the calcs and shows you all the cash flows. You can vary between Interest Only and Principal and Interest and see how it affects your cash flow. It also take into account your tax rate given your income level.
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auSo you borrowed 100% for your PPOR?
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auI was also very keen to learn the process of buying and negotiating for future investments. Everyone seems to say you need to do it yourself to learn.
You kinda need to try out things yourself to learn them. That is, if you want to learn and do this in the long term.
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auIt depends how much work you want to do. If you don’t have time but have the money…why not? But if you want to learn and understand the process yourself then you’ll have to do it yourself.
There is usually no market rate for buyer agents but $9k – 10k seems to be common. Legally they could charge as much as real estate agents.
Cheers
AndrewsuperAndrew | Property Analyser and Finder Tool
https://property-analyser.com.auI’m interested to hear why you are both suggesting staying away from vendor finance? Because you’d ultimately be giving up a cash cow?
I wouldn’t want to become a bank. Not worth the hassle.
superAndrew | Property Analyser and Finder Tool
https://property-analyser.com.au
