Yes, good question. Just bear in mind that you can structure lease option is so many ways, so it is hard to know how they are doing this.

Probably the property would only rent for $200 pw normally. So they want to charge an extra $190 in rent, of which they will give you back $130 IF (note big IF), you buy the property off them. With LOs I think…[Read more]

Hi Piper

Tenants usually do not have any equity, if they chose to go ahead then they often get discounts, but they don’t own or have any rights to this if they do not proceed – usually.

If you are looking for a LO as a tenant, have a look in your local paper, and/or sites like this.

It seems that LOs occur more often on the cheaper type of…[Read more]

Delboy

It would depend how you structured the LO.

eg one way, you could have a 2 year option, when they wish to renow after 2 years, the value would have risen so you could determine a new strike price and you could increase you loan to this amount (subject to serviceability).

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

Andrew

I think that buying out your partner is a good way of increasing your deductions for a small cost, but if this is your PPOR I assume you are renting it out to claim the deductions.

From what I have learned:
-You must live in the house first to claim it as your PPOR, and
– You can only have one PPOR at one time (except for 6 months…[Read more]

Pelican

Yep. Good point. LMI will restrict you, but I think it is better to ‘get it while you can’.

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

If you can find wrap finance at 95%, then I think it is generally better to go for a high LVR to use less of your money. It allows you to go further, but does cost more in LMI.

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

Hi Delboy

I have made a few posts on this before.

I prefer LOs for a number of reasons such as
– easier to get finance
– less problems with equity ownership (ie it is all yours)
– you can access the increased equity
– Can be shorter, say 2 years per option, allowing you to be more certain. ie wraps could drag on for 30…[Read more]

Hi

I have heard one lender say they just gave a 30 year loan to an 89 year old!

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

I would be very wary of the postive cashflow strategy now. When Steve did it, it was a totally different market. He was getting good cashflow in major regional towns and these had loads of potential for good capital growth – which is what happened.

These days it seems that the only postive cashflow proerty you can get is in the small outer outer…[Read more]

You could possibly have your contract rescinded and get the end purchaser to enter into another contract directly with the original seller. But watchout as you could be cut out, so check things carefully with your solicitor.

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

I agree with Derek, but if you have ever lived in your home, you may be able to claim this as your PPOR instead of the unit – depending which one has grown in value more.

I think GEO means, that if you are classed as a proeprty trader, then there is no CGT. But there is income tax and you do not get the 50% discount on the gain. So it would…[Read more]

KP

I pay 7% to my PM in Vic, he also charges a statement fee of $2.5 per month plus there is also GST on these. It is a bit annoying to be charged a separate fee for the statement, but I have never challenged it as he is the best property manager I have ever had. (Located in Ballarat). I don’t pay any other fees. Once he even took a tenant to the…[Read more]

I would be VERY wary of anything like this.

These are generally hard to resell and this limits their price, they are also hard to get good finance for. And you would be limited with what you could do with them – ie rent them out yourself, management etc.

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

Pursefattener

Yes you can creat a pty ltd company at http://www.cleardocs.com/ for about $937.

And you would be surprised that many accountants do not understand trusts.

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

The Royal Institute of Gyneacologists (RIG) has also determined that mortgage borkers are aloowed to perofrm minor operations as well.[blink]

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

You can negatively gear using a trust (eg Hybrid Discretionary Trust) and this will also help you reduce CGT when you sell as well.

Trusts do not pay tax, but merely distribute all income and CG to the beneficiaries. If you have many beneificaries (or even some) on low incomes, these taxes can be reduced dramitically!!!!

Terryw
Discover Home…[Read more]

In Vic, I beleive that is correct. I have wrapped in Vic and the wrappee did not need to pay stamp duty until they cashed me out- ie when titles transferred into their names.

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

I have set up a few trusts online at
http://www.lawcentral.com.au
the cost for a discretionary trust deed is about $275.

A friend of mine has recently setup one using the deed from:
http://www.cleardocs.com.au
and this only cost $135 approx.

There are not much to trusts, you may need a bit of advice, but then could probably just set up one by yourself to save…[Read more]

I think it is pointless to purchase a property if there is not likelyhood of capital growth.

Getting a few dollars per week, even $50 per week, is not much money in the long run. (And you will have to pay tax on this). This is eating into your borrowing capacity as well. I would be especially wary of buying in small country towns at the…[Read more]

X

It is up to the wrapper. It is better to get them to pay for it themselves I think. either way, I guess it means less deposit to the wrapper.

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