With outback properties, prices are generally rather flat. Not much capital growth occurs.

Without capital growth, there is not really any point in investing in a property. So you have to determine the potential growth prospects for the area you are looking to invest in.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

That’s a difficult question to answer. The best way forward may depend on a lot of things such as if your home in Sydney was purchased pre-captial gains = you could have a house up there as well CGT free. It would be best to sit down with your accountant. Do a few what if scenarios before hand and just go in there and get some…[Read more]

The trouble is some people equate being creative with doing things dishonest or illegal.

Maybe one way around you dilemma is to ask for vendor finance, or to try to borrow the deposit elsewhere.

Once settlement has taken place, you could then refinance or increase your loan.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Apostle. Is it really illegal, or do you just need some sort of licence?

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Michael has also written a recent summary here:
https://www.propertyinvesting.com/forum/topic/17535/4.html?sortfield=&sortorder=

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Bradles

Good reply. I agree that buying rural properties now could be a disaster. Some people are more concerned with whether the property is cashflow positive than the deal as a whole.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Banks are conservative.

One way around this would be to pay cash, settle on the property and then immediately refinance.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

I imagine it should be. You would be borrowing to invest with the intention of making money.

Check with your accountant before doing it.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

I am not an accountant, but….

eg. Mr X sets up The X Hrbrid trust with X Pty Ltd as Trustee.
A property is purchased by X Pty Ltd as Trustee for X Hybrid Trust.

Mr A then approaches a bank and asks for the loan to be in his personal name, with the loan being securred by the property.

An accounting entry is made to indicate Mr A is buying a…[Read more]

DD thanks, for reminding me to send my forms in. (I eventually did get my printer to work.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Lawboy,

Are you mixing up a few things there?

With an instalment contract, the title doesn’t change over until they make the final payment. Wraps (instalment sales) involve the repayment of a loan. Lease Options involved the repayment of rent – usually rent is not refunded if someone moves out.

In the case you cited, I can’t see how this…[Read more]

I blocked my number a while ago, but the other night a got a call which was a recording saying that I had won something, and giving me a number which I could call to retrieve it (cost of call $xx per min).

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Yes, it sounds confusing. If a property is costing you money, how does it help you pay off other debt? On the face of it, I can’t see how this could happen in the short term, unless the investment was sold at a profit and the proceeds paid into the home loan.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

The ATO put out a ruling a few years ago about buying a home thru a unit trust, see:

TR 2002-18 – “Income tax: home loan unit trust arrangement”
Available from:
http://law.ato.gov.au/pdf/tr02-018.pdf

Most people would want to use some sort of hybrid unit trust to enable negative gearing benefits.

Terryw
Discover Home Loans
North…[Read more]

I’ve purchased around 10 properties using buyer’s agents. All were in areas far from where I was living, so could not check on myself. All were good buys, except one.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

This topic comes up every now and again, so do a search and you may find some previous posts.

It may not be a good idea buying in a trust unless the home will be your temporary residence. As Don and Liz said, giving up the CGT exemption could be very costly.

The short term gains could be small when compared to this.

Terryw
Discover Home…[Read more]

One way to do it maybe to pay cash (using a LOC) and then get the loan. They could then base it on value since you would already own it. Of course, not many people could do this.

I know of one lender that could do it based on valuation – with a max LVR of 70%. But rates would be higher than normal.

And one more point. Are you sure your valuer…[Read more]

Be ware. You could be entering into a binding contract if the vendor accepts your offer. So don’t go over board.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

Thanks for the detailed summary Michael.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au

I agree that Rick is a very convincing speaker. Probably mainly because he practices what he preaches.

Terryw
Discover Home Loans
North Sydney
Terry@discoverhomeloans.com.au