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A Slight Change In Plans!

RubyRS4

By RubyRS4,
in South Australia

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RubyRS4 Grand Master

RubyRS4

Posted
Posted

Some of you guys might be aware I'm purchasing a property at the moment (paperwork is a nightmare) and building an extension onto it in the next few months. Well there's been a change in plans ...

I've extended the lending amount to about $580K to buy out the loan left on the GF place, and we're going to invest in the rental market. :P

Met with the broker last night and the Elders agent too, and discussed all our options with them and Tracy (GF). After nutting out the best options and thinking long and hard about it, we've got plans and contingency plans in place to make it work. Tracy is trusting me entirely with our finances and the management of our property portfolio. I'm a manager/bookkeeper of a $1M pa turnover business, so I think I've got skills in the money management area ;) The repayments will basically absorb my salary in the first 6-9 months. But if we can stick it out and live of the GF income then it would be the best retirement fund we could invest in. The Stag isn't going to get any lovin for a while.

Basically the way it works is my lender will buy out the current loan remaining on Tracy's property and extend that loan amount to include the purchase price of the new property, including an offset account with a nice sum in it for the extension. We move out of our current residence into the new place and rent out Tracy's place = income. We'll go variable with the interest rates for 6-9 months as the creep down and follow the RBA. When they settle at anything under 7.5% we'll go fixed for 3 years and start using the offset account for the extension. I know people in the trade and I'm a drafter also, so we'll save alot.

If there is any trouble with affording it all, such as the property is not tenanted for some time, I've allocated a limit of $5K from the offset account to help cover the loss portion of the repayments. That equates to about a 3.5 month buffer for things to go wrong, if they go wrong. If after 2 months the market is not working in our favour, we sell the rental place for a nice figure and refinance the loan for a lower total amount and new rate.

Its still daunting to think about :P

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Damo_R34 Grand Master

Damo_R34

Posted
Posted

Ruby your a thread whore :P

But sound very good, i have plans to also invest in the rental market, especially after the news of those sandgropers coming over to buy our land! Sounds like its all coming together nicely for you!!

RubyRS4 Grand Master

RubyRS4

Posted
  • Author
Posted

Its definitely do-able. But we'll be pressed for finances if something bad should happen, such as the lad needing dental work etc. I've always liked to live a lifestyle thats "comfortable" to my income. Whilst I won't exactly be 'squeezing every last penny' going down this path, I won't be living comfy either ... at least not for 6 months initially as we set up the property for rental, do all the paperwork, go thru settlement, blah blah blah

But I am kinda looking forward to it.

I got the biggest compliment from one of my bosses today. The big wig male boss and I get olong great. But my female boss and I lock horns from time to time, and don't see eye to eye on a few business things and business practices ... but even she said I've got great management skills and bookkeeping skills to make it work. I almost fainted hearing that :P So thats a big reassurance I could manage this investment portfolio just fine.

:P

RubyRS4 Grand Master

RubyRS4

Posted
  • Author
Posted (edited)
  GRIM_R32 said:
I'll give you 5k for the stagea if you get desperate roo! ba ha ha ha ha ha :P

I'll swap it for yours ... no cash! :P

Me thinks we'll be driving Tracy's Liana around alot ;)

Edited by RubyRS4
GRIM_R32 Community Regular

GRIM_R32

Posted
Posted
  RubyRS4 said:
Just you try to come after my S2 RS4 :starwars:

Seriously tho ... my two stags for your 260 :rofl:

Hmmm me thinks i could easily come after your S2 stag, then pass it smoking tires....lol!

Hmmm buy 3 more stags then ill swap all 5 for my 260, thats about equivalent value for what ive spent! :devil:

CRoNic... Grand Master

CRoNic...

Posted
Posted

I heard that if you purchased an investment property, and rented it out, the government would pay you x amount a week? Plus you'd get the income from the rent, therefore you'd be covered for the mortgage cost of the property?

Can anyone confirm this?

Nene260RS Experienced

Nene260RS

Posted
Posted

Roo have you spoken to one of the financial advisers at work???

Thats a huge step! why don't you chat to one of the wealth planners i deal with ?? Even if its just for more advice and a second opinion??

RubyRS4 Grand Master

RubyRS4

Posted
  • Author
Posted
  Nene_RS4 said:
Roo have you spoken to one of the financial advisers at work???

Thats a huge step! why don't you chat to one of the wealth planners i deal with ?? Even if its just for more advice and a second opinion??

I've spoken to my financial advisor Nene ... and 'no' its not Tracy :devil: I did the numbers before I sought the advice and they just confirmed what I'd worked out anyway.

Its a big step but its definitely do-able as long as the money is managed properly. Something I'm good at.

We'll get you and Ben over for dinner again one night and fill you both in on the move.

:starwars:

JulzR32 Collaborator

JulzR32

Posted
Posted

clap clap clap

reading about your finances was the biggest waste of my time lol

at 1st i was like wtf why the hell would i wanna know, but i guess some ppl are interested..

sorry... boring day at uni

RubyRS4 Grand Master

RubyRS4

Posted
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Posted (edited)
  JulzR32 said:
clap clap clap

reading about your finances was the biggest waste of my time lol

at 1st i was like wtf why the hell would i wanna know, but i guess some ppl are interested..

sorry... boring day at uni

Yeah uni is like that :down:

I've met quite a few members here and openly discussed the house buying thing to them. I guess its as simple as if you don't wanna know don't read about it. Those who are interested in entering the market, might just want to speak to someone who's recently done it. I've made a few contacts over the time.

In any case, I'm f**king excited ... so I'm sharing :)

p.s. now I gotta get that pool up well and truly before summer, so preggers Pokie can have a swim :(

Edited by RubyRS4
craig R33 Grand Master

craig R33

Posted
Posted

sounds like a similar story to me and my missus, we just recently re-furbed our unit, as an investment property

and recently moved back with her mum to rent it out...

mortage has gone up like a mofo

and we overspent on the renovations,

hence the reason the 33 might have to go to make way for the next property.....

well, thats what our broker says, i just give him evil looks everytime he brings my car into it :P

good luck with it ruby!

pkblade Experienced

pkblade

Posted
Posted

Well done on taking the plunge into property investment :P, I bought a nice Melb apartment at the begining of this year and it certaintly helps with your cash flow if you have partner or two to go into it with.

If your land agent hasn't already suggested you might want to look into getting a qualified surveyor *cough*BMT & Assoc* to do a 'Capital allowance & Tax depreciation report for ya. It enables ya to claim the special building write-off + more plant & equipment to depreciate than you otherwise normally would. So ultimately come tax time & being a negatively geared property it further helps you get a higher refund till you sell it/ move in. But, in turn the capital allowance deductions will reduce the cost base when it comes to working out the Capital Gain (or Loss but hopefully not, lol).

Good luck managing it :P

GRIM_R32 Community Regular

GRIM_R32

Posted
Posted
  pkblade said:
Well done on taking the plunge into property investment :), I bought a nice Melb apartment at the begining of this year and it certaintly helps with your cash flow if you have partner or two to go into it with.

If your land agent hasn't already suggested you might want to look into getting a surveyor *cough*BMT & Assoc* to do a 'Capital allowance & Tax depreciation report for ya. It enables ya to claim the special building write-off + more plant & equipment to depreciate than you otherwise normally would. Ultimately, with negatively geared properties it further helps if you both want higher tax refunds till you sell it/ move in. But, in turn the capital allowance deductions will reduce the cost base when it comes to working out the Capital Gain (or Loss but hopefully not, lol).

Good luck managing it :P

Hey Patrick! long time no see! But next time you post can you do it in english...lmao :P

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