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First time investor (be kind)... have I forgotten anything?

Discussion in 'General Property Chat' started by Ms Reno, 15th Jan, 2016.

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  1. Ms Reno

    Ms Reno Member

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    Hi all, whilst this should be in intro page (my first post!!), I have been reading for past 18 months and can finally, FINALLY contribute as I am now an IP owner.

    There are many of you who have helped immensely and you don't even know it. I'm seeking some specific advice now and you are all so knowledgable so I put myself out there for your free opinion. We only have a mortgage broker, no financial adviser, do we need one?

    The last 12-18 months:
    * PPOR lived in House 1
    * Renovated entire House 1
    * Bought block of land (for house 2)
    * Started to build House 2 - completed within 7 months
    * Built House 3 (Granny Flat) behind House 1 - Owner Builder - thanks BRAZEN, I stole a lot of your free advice here on CDC/AH SEPP and WE DID IT!!!

    Yesterday: Moved in to House 2

    Now we have House 1 and GF behind House 1 - both to be rentals.

    My question.... before they are rented - Just signed up with an agent (thanks for all free advice on HOW to choose an agent), picked a great one and negotiated to 5% for both properties (House 1 and GF behind, done through NSW AH SEPP/CDC - 2 separate leases).
    * Insurance - TS - Landlord and Building
    * Quantity Surveyor to go through as House 1 new reno and GF all brand new
    * Should I get bank to do valuation before tenants move in as I *may* want equity for IP #2... you guys are inspiring - would never have done all this without this forum and the previous SS Forums

    THANK YOU :)
     
    Last edited: 15th Jan, 2016
  2. KayTea

    KayTea Well-Known Member

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    I can't offer any advice @Ms Reno (nothing obvious glaring at me in terms of anything you've missed), however congratulations on such a massive effort (and success) in such a short space of time. Well done. :)
     
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  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I would get a val done for sure. Even if you don't release equity is nice knowing how much value your hard work created.
     
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  4. MTR

    MTR Well-Known Member Premium Member

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    I would personally get it valued prior to tenant moving in.

    Congratulations.
    On another note, now that you have used this strategy, shop the builds of g/f, this is where can save significant $.

    MTR:)
     
  5. datto

    datto Well-Known Member

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    Might have to consider loan structure (if any) so maximum tax deductions are achieved.
     
  6. Ms Reno

    Ms Reno Member

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    This is where I ask for kindness (I am very new to this but extremely interested)... my loan is IO for this but it sits at 62% LVR (BEFORE our completed valuation, I got a half way construction valuation which was pretty impressive Sydney property, very lucky) - any tips on how to increase the LVR. Ideally I'd love to 'move' the equity to my new PPOR. Is only way to apply for equity release, to increase the IO loan for a new/further IP?
    If I get a completed val I assume it may go to maybe 58% LVR.
    With 2 x tenants it is extremely + geared, which will hurt at tax time.
    Any tips? My full time job is something so far from this industry but I'm very keen to learn

    Need a translation, no idea what this means, 'shop the builds'?
     
  7. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Well done @Ms Reno!
    I think you are right here... moving equity to a PPOR will kill the tax deductibility.
    Note i'm not a tax expert...
     
  8. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Get some more quotes. Shop around.
     
  9. datto

    datto Well-Known Member

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    @Ms Reno . You may need to speak to professionals about increasing LVR and maximising tax deductions.

    There is plenty of info on this site about these matters.

    Me personally, when I borrow money I use the money for income producing purposes and not private expenditure.

    That way I can claim 100% of the interest as a tax deduction.
     
  10. Ms Reno

    Ms Reno Member

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    We can afford out PPOR at it's current repayment/LVR so might just leave that be - although we should probably change it to P&I - it was IO construction loan during the 7 month construction, finished 2 weeks ago so bank yet to consolidate it with land loan etc.

    So only way to increase LVR on House 1 (the title with front house and GF) is to borrow out for next IP - how exciting. Secretly hoping this would be the best/only way. BTW the GF is almost finished, no need to shop around, we did it as Owner Builder - got one of those $12,000 kit ones, it turned out amazing. Will post some photos if anyone is interested.

    Do most banks only lend out to 80% LVR generally? Sorry if terminology is basic, I warned I was a newbie.
     
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  11. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Wow. $12k? Yep.. I'm interested. :)
     
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  12. Ms Reno

    Ms Reno Member

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    Hi Gockie, yep, we did the GF as Owner Builders. We have renovated 2 prior properties and had just started building the house on a different site so no issues understanding BCA, CDC AHSEPP (NSW), storm water issues (always!!).

    I sourced my own Private Certifier and surveyor, got all approvals, Sydney Water, Complying Development through Certifier. We used www.bestsheds.com.au for the GF and they did all the design drawings to submit to certifier (we gave them the survey etc), a few to and fro's and we got approval. Best Sheds recommended a concretor and builder to erect the frame who we used. We did the internals and hired various trades (plumber, plasterer) and we did a whole lot ourselves.

    $12,000 was for the fully customed kit - delivered. We had to pay certifier, survey, slab, builder and all other local trades to get to completion. Trades and REA we have had have all commented on top quality, size, design and how it has been customised to the site which, to me, was invaluable.

    Are people interested in this? I could start a new GF NSW post somewhere else with pics and more detail.
     
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  13. SK Investments

    SK Investments Well-Known Member

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    Well done! I'd be interested in a granny flat post with pics :)
     
  14. Special order

    Special order Well-Known Member

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    What was total cost in the end for the build ?
     
  15. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    @Ms Reno regarding upping your LVR, you can do this for sure, but best for an IP rather than PPOR, as it won't be deductible if you use it for a PPOR.

    Using it for an IP is an excellent way to leverage further into investments with none of your own cash.
     
  16. Gingin

    Gingin Well-Known Member

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    Well done
     
  17. ZachAnsel

    ZachAnsel Well-Known Member

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    @Ms Reno dont kid your self, infact I need to learn from you. Please kindly share about granny flat as detail as possible. Thanks
     
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  18. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Share please! We can all learn from you! :)
     
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  19. MTR

    MTR Well-Known Member Premium Member

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    Means if you are looking at using this strategy of building g/flats you can save money by sourcing other suppliers, or subtracting the work out yourself. This is what I would do, of course its your call

    MTR:)
     
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  20. dabbler

    dabbler Well-Known Member

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    You do not have to own IPs to contribute, just know what your talking about, could be past experience etc etc

    Re valuation...... seeing you lived in it, it would be wise to get a valuation done by someone you hire (not by using one of the banks free ones that people seem to abuse) and tell them what your doing and have done.



    How can making money hurt ? if your paying tax, your making money, and that would be the goal really, if your buying more, that extra cash will dissapear quick enough, then you may be wishing again for the previous "tax problem" :)
     
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