Creating instant equity....using your rates notice

[natedog]

Hi All,

This scenario may not occurr too often but just wanted to let everyone know of an option available to use what may appear to be a negative and use it in a positive way.

We bought a property which settled 4 months ago for what i thought was a bargain at $435k.....10% deposit put in and LMI P
paid.

We then got all our dreaded new 2012 valuation rates notices a couple months back.

The rates valuation on the property we just bought came in at.....$593k!!!!!

I thought "that's ridiculous....there is no way it's worth that much!!

Anyway then I thought....would a lender accept that valuation to refinance with and gain access to the "equity".

Long story short, found a lender who did, big thanks to Aaron C for his knowledge and help with this!!!

we have now refinanced at 80% of council valuation and effectively pulled out all the equity we initially put in as initial deposit and stamp duty....and then more!

Just another way of using finance to our advantage!

Woo hoo!!

Nath

 

[westminster]

That is fantastic!
Well done to you and Aaron.

 

[Peter_Tersteeg]

That's great news!

Normally though, it's the other way around - the rates notice is well below the value of the property.

On the odd occasion where a lender has valued a property below the rateable value, the owner has even used that valuation to get a reduction on the rates payable to council.

 

[natedog]

That's great news!

Normally though, it's the other way around - the rates notice is well below the value of the property.

On the odd occasion where a lender has valued a property below the rateable value, the owner has even used that valuation to get a reduction on the rates payable to council.

Just think if you could do both....

 

[Elstupido]

Well done OP.

Just a quick question please. In NSW, does the rateable value equal to the value of the land? Or is it the value of the land plus building?

Thanks.

 

[Peter_Tersteeg]

Can't think of the last time I saw a NSW rates notice, but in Vic there's two figures:

* Rateable valuation - land value.
* Capital improved value - land plus building value.

 

[wylie]

Ascertaining land value is easier (in my opinion) than guessing a value of the building on it. I wonder how they work that out (with any level of accuracy)?

 

[natedog]

Ascertaining land value is easier (in my opinion) than guessing a value of the building on it. I wonder how they work that out (with any level of accuracy)?

When I called the council regarding the valuation, the council valuer called me back and gave me examples of comparable sales, he was comparing size of dwelling, age of construction, size of land, proximity to beach, shops etc to justify what I thought was too high a valuation.

The guy knew his council area pretty well though, so I didn't push the point and decided to use it to my advantage

 

[S.T]

Thats a fantastic result considering that the rates valuation would have been 10-11 months old too. Well done!

 

[jingo]

Hi All,
we have now refinanced at 80% of council valuation and effectively pulled out all the equity we initially put in as initial deposit and stamp duty....and then more!

Just another way of using finance to our advantage!

Woo hoo!!

Nath

Congratulations, Nathan.

Are you planning to use the equity you have drawn out to buy again, or to add to your buffers? Either way, it's a fantastic result and demonstrates how those with knowledge, skill and persistence continue to make money in the current property market.

Regards Jason.

 

[natedog]

Thats a fantastic result considering that the rates valuation would have been 10-11 months old too. Well done!

Totally agree!

A kerbside val would have been nowhere near that figure...I don't think anyway.

A bit of an abnormal circumstance, but shows with the help from people with specific knowledge of lenders criteria, you can use it to your advantage

 

[natedog]

Congratulations, Nathan.

Are you planning to use the equity you have drawn out to buy again, or to add to your buffers? Either way, it's a fantastic result and demonstrates how those with knowledge, skill and persistence continue to make money in the current property market.

Regards Jason.

Cheers,

The conservative side of me says sit on it, keep the breathing space.....but that historically hasnt been the side of me that wins in the end

Always looking in my prefferred locations, so who knows...if something presents as a good deal, why not...

the wife has other ideas about some "home improvements"....i knew there was a reason i shouldnt have mentioned the access to more money to her...

 

[brisbane 04]

Hi Natedog,
For interest sake I just added up the bank valuations against the council valuations and the councils were +$63,000. Some food for thought.

 

[BMan]

yeah the missus done that, i guess if the bank wouldnt then you could always show the council the bank val.

have you tried getting a reduction on hte rates now? and get the best of both worlds

 

[natedog]

yeah the missus done that, i guess if the bank wouldnt then you could always show the council the bank val.

have you tried getting a reduction on hte rates now? and get the best of both worlds

Yep.....done

 

[starter]

In Victoria the s 32 contain the rates notice and the council valuation, is this information available in the sale contract in other states as well?

 

[Aaron_C]

In Victoria the s 32 contain the rates notice and the council valuation, is this information available in the sale contract in other states as well?

Each State does it differently. In Victoria and South Australia we get the land value and the CIV as indicated. In NSW only the land value is given. In WA only the 'rental value' is provided which is an estimate on the rental return on the property, which is not really helpful for providing an indication of value.

 

[Aaron Sice]

thats a cracker! well done!