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Hi, For borrowing in the vicinity of 900k for a commercial property, with a major lender, what sort of interest rate would be competitive in the current climate? 900k loan, 60% LVR, IO, is 5% realistically a possibility? Cheers Jon2378

So i spoke with a mortgage broker from Westpac today. He told me that I didn't have sufficient income to service the loan I proposed. I even offered to secure it against sufficient equity to make it 50% LVR, and he said it didn't matter - post global financial crisis, if u don't have enough...

Well, how are big investors avoiding paying land tax? In SA, land tax is 3.7% once you reach 1mil+ of land value. That means a property has to be returning at least 5%(interest rate)+2%(costs)+3.7% (land tax) = 10.7% annually, just to be neutrally geared! How could investors have 10+...

I think land tax is important, as it acts as a deterant from people buying up large quantites of land for future development potential. However in the case of a heritage listed property, where no development potential exists, however it has a substantial land holding, I don't think it's...

So i'm currently considering purchasing a heritage listed property on a large block of land, which can't be subdivided. The numbers look good however I discovered that land tax would be approx $11,000 per year. I would like to buy it as an IP, leasing to a family member. Tax deductability is...

This is a bit misleading. China would not earn 5.4% interest on his 'cash'. He is a medico, so we can assume confidently he is in the top tax bracket, and therefore paying 45% tax on personal income. Since the entire 2.1mil of debt is tax deductible, for any debt that he offsets using his...

house is smaller than most appartments, but 60-70k more expensive. Land value is approx 240k. It will be notably CF- if renting as an apartment, but overpriced if using it as land. It's sortof in no man's land. If the house was 3 bed, or at least 80/90 square metres, it would be a very good deal.

Why can't 3rd party deduct interest paid? If they take out a mortgage and onlend the money through a commercial loan, why isn't it tax deductible?

I'm talking about a 3rd party onlending to make a tax deductable loss. I.e. 3rd party borrowing at 5% and onlending at say 4%. It would be done as a commercial transaction. The 3rd party would be required to pay interest of 5% to the bank they mortgaged their property with, and the investor...

There is if the 3rd party took out a loan, secured against their property, in order to lend money to the investor. The 3rd party still have to pay interest on the amount borrowed against their property, while the third party pays no interest.

The loan could be interest free (or even below CPI)? Then you could use it to effectively shift tax deductability from the investor to the 3rd party (who could be in a higher tax bracket), which may be beneficial in certain family situations..

Terry, could you elaborate a bit more on the tax implications of the above? For case 1: Is it correct that the interest on the loan would be 100% tax deductible for the investor (providing it's use to buy an IP), and the 3rd party would receive no tax implications? In the case of part...

Thanks for the responses so far. The cashflow is very negative intentionally. It would be purchased as a temporary liability, but with conversion from commercial to residential in the next 2 years, I think there's a lot of potential for capital growth. The breakdown is roughly: 35k/yr...

Hey guys, I'm looking to go in with 2 other parties on a commercial property, but I don't know how to structure the loan. I don't have the resources to go it alone, neither do the other parties. Normally a family trust would be the way to go, but the property is negatively geared by...

My uncle has paid off his debt on 3 properties he bought around 25 years ago, including his PPOR, a block of land and an IP. The properties are worth ~$2.5m. 2 of the 3 properties have mortgages on them, cross-collateralised, with about $20k owing on the IP. The IP generates around...

I tried that a few days after i exercised the cooling off, through the agent, and the vendor said they no longer wanted to sell. I couldn't get more information than that out of the agent. If the property is off the market, then surely the vendor can sell it privately? Perhaps a certain...

Yes, it is zoned 'City Zone' which allows resi and commercial use. Are you saying that because the zoning allows both, even though the 'current approved use' is commercial, that alone shouldn't be prohibitive to purchasing it from a lending perspective? My bank lender had concerns over it. I...

I would use it as residential. I thought it was perfectly reasonable to request the contract be made subject to council approval, given that it was advertised as a residential property only, and the agent had told me on multiple occasions, despite my doubts, that it was approved for...

It isn't commercially zoned. It's a very unique property located in the CBD, with a mixed zoning that allows for commercial/residential/retail etc. use. I guess a further question is how difficult is it to get the approved use changed from commercial to residential? The zoning allows...

Hi Guys, Sorry in advance for the long story! A a couple months ago I was looking at this property up for auction. In my head I had valued it about 750k, it went to auction (which I didn't attend) highest bid was 550k and it was passed it. Following the auction I approached the agent and...