covid downturn led mortgage default-Save overseas investment property or pay rent

Discussion in 'Loans & Mortgage Brokers' started by Paws of Fury, 13th May, 2020.

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  1. Paws of Fury

    Paws of Fury Active Member

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    Not sure where to place this but since it relates to mortgage default I'll put it here. Happy for it to be moved to a more relevant section.

    We stopped receiving rent from ALL our investments overseas and in Australia with covid caused downturn. Applied for mortgage freeze in Australia but no such option with overseas lender. Overseas Lender threatening legal action, credit default and move to seize property if mortgages not paid there.

    We have recently made a move to Tassie and renting here. Landlord doesn't wanna discuss reduction(we are paying above market rate too). So we have begrudgingly listed ALL our Australian properties for fire sale hoping one would sell and will help ease the pressure. Financial suicide but couldn't think of other options.

    What would you do if you were in such unfortunate circumstances & could only manage to pay either your rent or your o/s mortgages?
    1. Continue paying o/s mortgages and save your overseas investment and credit while not paying rent in Tassie. Pay Tassie rent later when you can.
    2. Pay rent in Tassie and let o/s investments foreclose and ruin your credit and decade of hard work..
     
  2. snoopy

    snoopy Well-Known Member

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    sorry to hear of your challenging situation.

    - your tenants in Australia should be able to pay some rent - even those on job seeker are getting $550 per person per week. If they have stopped paying though the PM will need some time to sort it out.

    but as you say you have a repayment deferral in Australia that should ease that.


    - where is the overseas investment and how much equity do you have in that property?

    - in Tasmania you maybe entitled to some rent relief

    Residential tenancy - Changes to residential tenancies in Tasmania during COVID-19

    - try and avoid a fire sale if you can. Having multiple properties listed may not be a bad idea. If you get a good price on 1 of the properties you maybe able to liquidate that asset
     
  3. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    What is the intention with the OS properties. If you had to sell them would you make a loss? It seems quite quick that the OS lender is talking such drastic measures already, when did you start falling behind paying them?

    If you think this is going to be some short term pain, ie you can pick up some extra income with a second job etc then I would be severely tempted not to pay rent in Tassie and get into arrears here. However you do have to ensure that your situation is deemed plausible as COVID-19 hardship. I am unaware if you can use investment property lack of income if your normal income is not affected. Someone else may know the answer on that one.
     
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  4. TMNT

    TMNT Well-Known Member

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    you lost all your OS rent??? geez....thats bad (assuming its more than 1 x ip)
     
  5. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Country?