The bank valuation should make sure you are no overpaying. I personally am not too worried about yield if there is potential for capital growth. Especially when getting vendor financing. Sounds like a good deal.

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You can get a trust deed for about $135 at http://www.cleardocs.com.au
You will also have to pay stamp duty on the deed, which varies from state to state, in NSW it is $200.

Trusts should cost virtually nothing to run. just a tax reutrn each year.

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I think you should ask your other questions to your solicitor. I would suspect that you could have up to the last minute to withdraw using the finance clause. You can try to negotiate an extension, but not always succeed. Banks often don’t give you an answer in time, so you have some tough decisions to make.

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I think you will find LMI will only be partially refunded if you sell within 6 to 12 months of the loan settling.

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Hi

I was at the weekend seminar too (and enjoyed it). But I have to agree with renos comments. When valuers are valuing residential property, they use comparable sales data. ie they look at what similar properties sold for in the same area. comparing position, number of bedrooms, improvements etc Rental yield would only be one small factor.

If you could put up the rent by converting a living room into a bedroom, then it would help as you are creating an improvement. But putting up the rent simply because you found a person willing to pay more would have very little effect on value. This is especially so for bank valuations, however it may help slightly if you are selling to an investor-especially a cashflow investor.

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There are lenders that will lend on commercial security based on the rent for serviceability. It is like a semi low doc, as long as the rent is above a certain yield – about 11% I think, then they will lend. Also, location has to be good etc.

But as the others have said, you will need a deposit of around 35% or use one of you other properties as additional security.

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Many lenders will accept a personal loan as deposit. You just have be able to service both loans.

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Of course, it is hard to do, but many people are doing this with stuff purchased off the plan. Property has gone up, so instead of settling, they just sell and take a profit.

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Patw

Could you please explain what you mean by ‘seasoned’?

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Remember try not to beleive everything an agent says. Negotiate hard, and don’t let them call the shots. beware 20 days is a quick settlement, and if you are using a major bank, they may not be able to settle in time.

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