Yes, they generally only want to take into account a low yield for rental income. You may find somethign giving you a 10% yield, but the lender may only take a 4% yield into account (and then only 80% of this). Bastards

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

Hi. The last time I looked at HSBC, they would only lend to an LVR of 70% for investment properties. They also are wanting to take a charge over the company (if the borrower is a company). Other than that, their serviceability model is not bad.

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

I owuold think it would become your PPOR from the date you moved in, but would pay CGT on the gain during the years it was rented.

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

Rooney

That is correct, they do not take into account negative gearing (like centrelink).

I think they have to do this as it would be easy for people to shrink their income down to $0 and avoid paying any support. I don’t know if using a trust/company is a way around it, but cenrelink want to treat assets owned by your trust as being your own if…[Read more]

Redwing

Good point. I have read that if you are planning on becoming bankrupt and transfer your assets knowing this, then the bankruptcy court can overturn these transactions as the purose was to defeat creditors. But I think if you are just purchasing assets on behalf of the trust, then they are generally out of reach.

Terryw
Discover Home…[Read more]

Also be aware that you will not get your profit until the place settles – which is often a while.

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

Some banks will allow second mortgages (Adelaide, Bankwest are two).

Don’t forget you have to show you can service the payments on the second mortgage as well as the first (or teh payments on a personal loan). Or you could use a credit card – some people do!

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

Hi Wrappack.

I am just guessing, but imagine a LVR of around 65% would be possible. You could possibly do it without any cash, but I have yet to find a lender that will not ask for personal guarrantees.

Also be aware that valuations on expensive properties can vary a lot.

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

The second mortgage is just like the first mortgage, but can only come after the first. ie if you go belly up, the first mortgage gets first go and your security property and then the second mortgagor can have their turn. it is more risky for this reason (= higher rates).

I beleive the bank would have to give their permission for a second…[Read more]

No.

If the debt is $1mil, you would only get 80% of this = $800,000 less your current loan of $300,000. So that would be $500,000.

There are also many factors that the lender will want to take into account such as your income (you will have be be able to afford the repayemnts on $800,000) and what you want the money for.

Terryw
Discover Home…[Read more]

You could transfer equity by increasing your existing loan and paying down your new loan, but the extra interest payments would not be tax deductible as the purpose was private nature rahter than business.

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

Without considering other security, it may be possible to get 80% on a commercial property if it is a good deal in a good location. But generally 605 to 75% LVR.

Valuations would be done using comparable sales (if available) and would incorporate other things such as leased amount, length of lease left, any options to renew etc. Much more…[Read more]

It would be difficult to get finance at a high LVR for soemthing like this in the country. Before you make an offer you would need to get a valuation done to make sure your not paying too much.

you will definetly have to establish that you ohave other income to service the loan.

I wouldn’t beleive everything written in a book, especially one…[Read more]

One way would be for the Trust to be shareholder in the new company (the business). If anything goes wrong, the shareholders could not be held to be liable. Dividends would then flow on into the trust.

It is not good for the trust to run a business as if anything goes wrong all the assets of the trust could be at risk.

Better check with an…[Read more]

I owuld never go for a serviced apartment, especially one of that size. Finance is difficult and resale is very difficult and this will affect capital gains.

The one near the uni sounds alright, but just check the sunset clause. The developer may be able to just cancell the contract by a certian date if the construction is not complete. Some…[Read more]

Shushar

Yes it is true. I had a unit myself off the plan and tried to onsell it beofre completion. No agent was interested in it. I ended ended up just rescinding the contract and walked away from the deal because of delays and lack of growth. (No penalty for me as I legally got out of the contract as it went over the sunset…[Read more]

I owuld think that if you later sold your old investment property after living in it, then the CGT would only be applicable on the gain during the time it was rented out. It may pay to get a valuation done when you move in for this purpose.

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

$0

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

Orion

I am not qualified to give advise, but from my knowledge:

1) You can give the house to the trust, but stamp duty must be paid on market value.

2) You would probably be required to pay CGT on the 7 years that your property was rented.

3) Not sure. But there is a tax ruling on renting from your Unit Trust. see TR 2002/18 Income tax: home…[Read more]

It is a personal choice really.

However, if you currently have a loan on your home, why not divert extra payaments into this rather than paying off a investment property.

BTW would it be wise to purchase such a property?

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