Hi There
I have 2 properties both with good equity…The problem is I’m getting to the point that I just cant keep up mortgage repayments..
I’ve kind of resolved to the fact I’ll have to sell… but I really don’t want to sell a property as both properties are good performers and making good capital gain..
And I also don’t want to keep digging into equity just to pay off the properties………., just wondering if anyone has any ideas
thanks
You need to increase your cashflow somehow. You can do this by increasing the income and/or decreasing expenses.
Some ways to increase income are:
– get a higher paying job,
– get an extra job
– increase rent
– sell an option on your property
– consider selling via an installment contract.Some extra ways to decrease expenses are:
– change all loans to interest only if you haven't already done so
– use a 100% offset account
– get a lower interest rate
– reduce property management expenses
– make sure you are claiming depreciation in full
– apply for a tax variation to reduce your tax weekly instead of waiting for the end of the year
–Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
You may find the services of a quantity surveyor may be useful to work out the full depreciation mentioned by Terry.
Where are the properties located? What type of properties are they (house, unit)?
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Terry,
How does one go about submitting a variation such that less tax is paid each week (rather than waiting until year end to claim it all back in the tax return)?
I assume there is a certain type of form to fill in?
Cheers,
.
hi Adam
Yes there is a form to fill in. I can't remember the name now, but your accountant can usually help you submit it. Tax installment variation form maybe???
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
It's easy enough to do yourself – accountant might charge you a fair bit to organise it. It's called a PAYG income tax withholding variation (ITWV). Scope out the ATO website for info on how to submit.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Sunny
To get your financial situation back into shape I'd be tempted to go with one of Terry's suggestions above, i.e. sell one of the properties with an Instalment Contract (IC). This type of sale would get you an upfront deposit, fixed positive monthly cash flow of at least $500 per month (after all expenses) and fixed capital gain.
With all expenses covered on the place you sell with the IC, you'll still have at least $500 per month to support the second property.
With the above accomplished, I'd aim towards another positive cash flow property, i.e. buy and on sell with an IC, followed by a long term buy & hold. Then repeat
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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