It may be possible to wrap, but the repayments would be much greater than the market rent on the place. But it can be done, and has been done in Sydney.

If it is on the market, you can offer the agents incentives to sell. eg, above $XX, they get an extra 2% commission etc.

Also, it is not clear from your post, what did you pay for it and what is it worth now – bank valuation. There is no use in selling at a great discount if you could simply borrow the extra equity and use that to invest in postive cashflow stuff.

Terryw
Discover Home Loans
North Sydney
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Sounds alright to me. I would much rather a good IP in Marrickville than in whoop whoop. The figures you quote, are they before tax, PI loan with extra payments? If you just change it to interest only and put all extra payments into a 100% offset account, this should ease cashflow.

You would have had good gains over the last few years and it would be asham to sell it, just to buy another property or 2. CGT is a killer. What about just borrowing against the equity and buying positively geared property or 2 which will help offset the loss – if there actually is one.

Terryw
Discover Home Loans
North Sydney
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ANZ is good with 95% loans (with the LMI added on top). They do multiple 95% loans, even on investment properties – I obtained 6 myself at 95%.

Terryw
Discover Home Loans
North Sydney
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great location in my opinion.

Terryw
Discover Home Loans
North Sydney
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Seems to be heavlily in their favour (of course). I think borrowing 105% will give them a 40% share of any capital gain.

Terryw
Discover Home Loans
North Sydney
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Hi there

I have done a few lease options like this and have come tot he conclusion that I shouldn’t have!

1) I think to make it worthwhile for yourself, you should base the rent on PI payments on the strike price less the option fee. ie about $393 per week. adjusted quarterly in line with the CPI. This does not always work for properties in areas of low rental yields.

2) yes, 2 to 3% would be good (for you)

3) I think 6 years is too long. But after the end of the lease, the tenant would have to either:
a) buy the property
b) move out and lose everything they have paid.
c) renew the lease, with a new rent and new stirke price based on market values at that time. Make sure you have the right to decide if you want to renew or not, and charge a new option fee.

4) yep if they back out, all option fees, extra rent etc are not refunded. unless you want to of course.

From what I have seen, giving up a potentially large capital gain for a small weekly profit is not worth it.

Terryw
Discover Home Loans
North Sydney
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I had an investment property where the sewer was put on in the town, and connecting was compulsory. From memory is was about $5000 to connect, with the pipes comming in very near the back fence. Just a few years before I had connected one of those biocycles whihc cost me about $8000!. But apparently having sewarage connected adds a lot of value to the area.

Terryw
Discover Home Loans
North Sydney
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You could sell tax free to your trust, this would release your money. Use this money to buy your new home, and the trust could borrow to buy the house from you making the trust loan much larger than your new home loan. You will have to pay stamp duty tho.

Another way, if owned jointly with spouse, sell you share or buy your spouses share. To do this you would increase borrowings and release funds like above, but not as much. But, there may be ways of avoiding stamp duty on this altogether.

Terryw
Discover Home Loans
North Sydney
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Hi

Doesn’t sound very attactive. You may make a bit of cashflow, and then 5% on the purchase price after 3 years. It could be worth 20% more by this stage. And when you take into acocunt your costs like stamp duty etc, you will make hardly anything. Most LOs have a 20% margin on the price and a 3% margin on the interest rate.

Terryw
Discover Home Loans
North Sydney
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Hi Asiababy

I don’t think you could claim this as your mainresidence as you have not lived in it. see CGT Determination Number 51
Capital Gains: What factors are taken into account in determining whether or not a dwelling is a taxpayer’s sole or principal residence?
http://law.ato.gov.au/atolaw/view.htm?locid='CGD/TD51/NAT/ATO‘

But since you have never rented it out, maybe you could. better talk to a good accountant.

Terryw
Discover Home Loans
North Sydney
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