i guess if you had a LOC with say 20k you could use that to fund the reno, holding costs etc and then revalue the property when the reno is done and pay the LOC off
I guess I should have known better
- Thread starter Angel13
- Start date
i guess if you had a LOC with say 20k you could use that to fund the reno, holding costs etc and then revalue the property when the reno is done and pay the LOC off
I think so. There will probably be updates on their FB page - http://www.facebook.com/groups/236871996398420/
Cheers
Jamie
So really, what you meant to say was "depending on your circumstances, prepaying interest can be a good way of bringing forward deductible expenses"
Personally, for me as a regular wage-earner, I can't see prepaying interest as being of any benefit - yet!
If you sold an IP with a big capital gain pre-paying interest would definitely yield a large benefit even if you are PAYG...
too true.
" Knowledge increases in proportion to it's use- that is, the more we teach, the more we learn." Don't know the author of this quote but I like it.
So really, what you meant to say was "depending on your circumstances, prepaying interest can be a good way of bringing forward deductible expenses"
Personally, for me as a regular wage-earner, I can't see prepaying interest as being of any benefit - yet!
well obviously depending on circumstances
like everything we do depends on your circumstances
yes prepaying interest wont help you if you arent going to get taxed heaps
basically to sum it up prepaying interest is good if you will be taxed alot of money in that financial year be it PAYG tax or CGT
I'm always a bit sceptical about claims that people regularly buy properties at 20% under market value just like that! After all, if something isn't selling, and your offer is accepted then (by definition) that's its value.
If you are getting something on the cheap, then either it's going to be a forced sale (e.g. due to death, divorce or debt), or the property will have problems with it.
Nathan often appears to bag bargains, but a lot of these appear to fall into the problem category. Take a look at some of his posts for ideas.
I wonder if a better tactic might be to look for overlooked potential. A poor house in a good location, or a tight, tricky site that could be built on.
I'm always a bit sceptical about claims that people regularly buy properties at 20% under market value just like that! After all, if something isn't selling, and your offer is accepted then (by definition) that's its value.
If you are getting something on the cheap, then either it's going to be a forced sale (e.g. due to death, divorce or debt), or the property will have problems with it.
Nathan often appears to bag bargains, but a lot of these appear to fall into the problem category. Take a look at some of his posts for ideas.
I wonder if a better tactic might be to look for overlooked potential. A poor house in a good location, or a tight, tricky site that could be built on.
Hiya
Not saying targetting problematic props is good or bad, because it depends on one's capacity to solve the problem, thence turn a dollar.
In life and business generally I have found one gets paid for solving challenges
Its different to organic growth investing..................
ta
rolf
Talk to a Accountant that knows and controls property for over 30 years seen the up and down sides in several markets and talks from experience and they will tell you different,15% add on face value might be a way bit on the high side..
Firstly need to define things as buying under 'value' rather than 'market value' as there will be those who define what you paid as the true market value, including valuers mostly!I'm always a bit sceptical about claims that people regularly buy properties at 20% under market value just like that! After all, if something isn't selling, and your offer is accepted then (by definition) that's its value.
If you are getting something on the cheap, then either it's going to be a forced sale (e.g. due to death, divorce or debt), or the property will have problems with it.
Nathan often appears to bag bargains, but a lot of these appear to fall into the problem category. Take a look at some of his posts for ideas.
I wonder if a better tactic might be to look for overlooked potential. A poor house in a good location, or a tight, tricky site that could be built on.
A problem property or property with a twist for higher potential are two good places to look, most properties aren't sold at the top price, even if it's just getting someone to mow the lawn and tidy up the house. I see properties every week that would get an extra 1-2% minimum or at least sell much faster if they were marketed properly (get the messy tenants out and home stage your 600k asset Mr & Mrs vendor.. not that difficult), doesn't make for enough profit on a trading basis with the huge transaction costs of buying and selling but every little bit helps.
I think every property we bought came with a challenge, except for a couple.
11 unit family building-took us almost 8 months to get financing, due to we couldn't get LMI, and the previous owner's tax returns showed a declining income...and we were very new landlords.
house- we bargained the price down too far, and the lender didn't lend that low. We had to increase our offer to qualify..so asked the vendor to throw in some goodies.
house- zoned commercial.Not all lenders like that. They valued it lower, and we had to make up the difference. It also had an easement and ROW on the property
huge house- we needed to have it rezoned. Had to go thru a DA.Complete rewiring and replumbed, and turned into bachelor suites.
house + 4 mobiles- Lender wouldn't allow the mobiles on the mortgage.When the vendor realised how valuable the property could be, he tried to reneige.We threatened with legal action. We made the deadline with 90 minutes to spare.
mobile on own land- Owners from USA. Only dealt thru emails and phone.Ugly property but structurally sound. A real bargain..and no body else wanted it.
mobile- it needed to be converted from oil heat to electric, jacked up level on the lot pad, and painted on the exterior. We had good working relationship with the mobile park owners, and they agreed to allow us to keep it oil (insurance concerns).
Usually the properties with the most difficulties are the ones to buy.
Nobody wants them...vendors want to get rid of them.
As someone else said..if it was easy, everyone would be doing it.
11 unit family building-took us almost 8 months to get financing, due to we couldn't get LMI, and the previous owner's tax returns showed a declining income...and we were very new landlords.
house- we bargained the price down too far, and the lender didn't lend that low. We had to increase our offer to qualify..so asked the vendor to throw in some goodies.
house- zoned commercial.Not all lenders like that. They valued it lower, and we had to make up the difference. It also had an easement and ROW on the property
huge house- we needed to have it rezoned. Had to go thru a DA.Complete rewiring and replumbed, and turned into bachelor suites.
house + 4 mobiles- Lender wouldn't allow the mobiles on the mortgage.When the vendor realised how valuable the property could be, he tried to reneige.We threatened with legal action. We made the deadline with 90 minutes to spare.
mobile on own land- Owners from USA. Only dealt thru emails and phone.Ugly property but structurally sound. A real bargain..and no body else wanted it.
mobile- it needed to be converted from oil heat to electric, jacked up level on the lot pad, and painted on the exterior. We had good working relationship with the mobile park owners, and they agreed to allow us to keep it oil (insurance concerns).
Usually the properties with the most difficulties are the ones to buy.
Nobody wants them...vendors want to get rid of them.
As someone else said..if it was easy, everyone would be doing it.
What? That sounds so crazy! They made you pay more? I hope it wasn't a lot more.
$1500 more.
The house was advertised at $55k.
We had it accepted at $48.5K
Our lender said their minimum mortgage is $50k.
They were located in a big city, and figured anything lower than that must be a dump. They had no idea that rural properties do have value.
So we went back, explained the situation, that we were still not going to pay more, but since the property needed a new stove anyways, we negotiated for a new one, fill up the oil tank, and chest deep freezer.That came to $1500.
Everyone was still happy.Of course within 6 months, the tenant burned down half the house.
We rebuilt, increased the value, and rent..all good.