It can be dangerous buying with someone else. You should get a solicitor to draw up an agreement. eg. http://www.lawcentral.com.au has a joint property purchase agreement which you may want to look at.

Also you will need to jointly take out the loan, so you will be responsible for the whole repayments if he can or won’t pay – and vice versa.

Terryw
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Depends where and what sort of property. generally in Sydney yields are around 3-4%, so anything over this is good.

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Kylie, no need to repeat yourself 3 times!

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I think you should at least have a pre-approval in place before making an offer. You can make the offer subject to finance and having the preapproval will speed things up. need around 5 days for the full approval as the valuations need to be done etc.

I think that if you have a subject to clause, then the cooling off period doesn’t apply until the condition has been met – eg finance approved. But I could be wrong, so check with your solicitor before signing anything.

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I agree that IO with an offset is the way to go. Mainly for tax reasons. Maybe an example with explain it better.

e.g.
You have a $100,000 loan. after several years of paying PI the balance is now $50,000. You want to buy a $50,000 ticket to travel around the world. So you withdraw $50,000 from your home loan, bringing the balance to $100,000. But this new borrowing is not for business, but for personal use. So only the interest on $50,000 is deductible.

Or

You get a $100,000 IO with an offset. Instead of paying PI, you pay the same amount into the offset account. the interest is direct debited from this account monthly leaving a growing balance. After several years this gets to $50,000. Since you have $50,000 in the offset you are only paying interest on the balance of $50,000.

Up to this point these two scenarios would be the same in terms of interest charged.

Now you go and buy your $50,000 ticket (must be first class) and you take the money from the offset. Your interest payments will then go up again. Since you have not borrowed any additional money and have not paid down the loan or withdrawn any money from the loan the deductiblility of interest would not change. So you can now claim the interest on the full $100,000 as a deduction. You have effectively had a tax deduction for borrowing to have a trip around the world.

Sorry, that was a bit of a long example!

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I think you have missed the boat by about 4 years! A friend of mine purchased a +ve cashflow unit is central Shanghai and it doubled in value within 2 years.

Beijing seems to be booming also because of the olympics, but there are probably still smaller cities out there that may have some bargins.

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You just have to weigh up the charges of transferring money overseas. I know ANZ charges $22 to send overseas from Australia, plus they make a bit on the exchange rate too. Could be costly to bring it back too often.

What about just leaving it there and paying down the loan?

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There are some lenders that will lend based on end value of the project, even on Low Docs.

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double posting
see https://www.propertyinvesting.com/forum/topic/26500.html

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Nathan, are you giving away the kit or selling it? Your headings says ‘give away’!

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