A contract is binding once exchanged. No backing out now unless the other party lets you.

Yes, it is too good to be true!These sorts of properties can have the following difficulties:- Difficult to finance- Hard to sell- Low or not captial growth (due to the above)- Restricted on selling agent and managing agent- Rental guarantee meaningless if company goes down- May be other costs that pop upHaving said that, some people buy more than…[Read more]

If you are going to sell, you would need a loan with low exit fees – this limits you to the major banks. You would also want an IO loan on the investment while you still have a loan on your own home. You wouldn't need an offset on the investment loan, but you should have one on your home loan.

Use equity to cover everything. Why use your own cash when this could be used to reduce non-deductible debt first?

Hi BradRemember you cannot actually borrow or access all the equity in your property – usually anyway. Most banks will only allow 90%-95% LVRs.Instead of selling your home, why not jsut consider renting it? This way you can claim all the deductions and also rent something cheaper. And under s188-145 of the tax act, you could keep it CGT free…[Read more]

Having a company or trust will not change anything from a borrowing point of view. The lender will be looking at you as they will be asking you to guarantee the loan. Trusts are good for other reasons such as asset protection and tax savings, not for borrowings. But since you have cash, you should qualify for No Doc loans easily.

I agreee with Richard. You have plenty of equity, so even if the postocode is restricted you could borrow the full amount on the owner occupied house and have the investment unencumbered.

Hi GiulioI just ran your numbers through a serviceability calculator and you should be able to pass serviceablity – unless you have large credit card limits, personal loans, car leases etc.Just try another bank.

There are plenty of private lenders around, but they charge high rates with high fees and they are ruthless when you default. Someone I know was evicted yesterday by a private lender as he defaulted on his loan.I have a few clients who borrow money from friendly family members at around 10-15% and then use this as deposits ofr property. Sounds…[Read more]

Hi HelenaSounds like you have a little problem. I would suggest you seek legal advice asap, try legal aid.Have you documented the money you put in with the brother in law? You could probably argue you have an equitable interest in the house, but that won't really help if the bank takes it. They will sell it, and any left over should be divided…[Read more]

Have a look at the tenants union website, http://www.tuq.org.au/.It is meant for tenants, listing their rights and proceedures for evitions etc, so it should give you an idea of what you can and can't do.

Hi MikeIt seems that this system will be hard to replicate yourself on a small scale. It is that company which provides the loan, and an asscoiate company acts as trustee (legal owner) for the property until it is transferred at the end. There is another company that manages the property. I have never actually seen a non recourse loan myself. I…[Read more]

Its hard to say.Probably the markets have changed signifcantly since those materials were produced. Its much hard to find cashflow positive properties now and the ones you can find may not be worth purchasing.Why don't you start looking at what you have, checking out the growth prospects on the area, seeing if you can add value, increase rents…[Read more]

Bernie has probably experienced massive capital growth over the last 5 years. Still cheap, but are you sure this is growth going to continue? What happens if the mine closes or doesn't even open?

The ideal is not necessarily to have cashflow positive property, but to make money. Maximising profits should be the goal. So what you have to do is work out if you think the property is going to increase in value over the short and long terms. If you sell, what are you going to do with the money?  If you are going to buy another property, then…[Read more]

These sorts of loans are generally high in exit fees and are all of these loans are mortgage insured which may restrict future borrowering.

Sounds more like a lifestyle choice.I would change both loans to IO anyway, and get a 100% offset account on one of them – the one you may live in.If you have lived in one previously, you could probably class this as your main residence and to avoid CGT while still renting yourself. But whether this is more beneficial than living in your own…[Read more]

If you really want to get into property, you might be able to buy using a 100% loan. Some of these are available for investments too. It would be good if you could get something, live in it for 6 months get the grants and exemptions of stamp duty and then go back to renting. You should be able to do it so the property is CGT free. Do it up a…[Read more]

Banks don''t really look at properties like that. What they do is what Adrian described and take a percentage of the rent received. These days there are a few lenders that will take into account negative gearing benefits by taken depreciation into account and also interest claimed on rental property loans – eg. ANZ, St G, Bankwest and others. So…[Read more]

What if the fire spread to neighbouring houses and someone died?I know of someone whose house mysteriously burnt down. For some unknown reason they had moved their important things out before the fire started. The police etc are now investigating it.