澳洲Australia property Beginner question re financing renovation


在澳大利亚 I am interested to find other peoples ideas on my present situation regarding a renewal of a lease for our PPOR in Cairns. The house has been continually leased, through a PM, to the same tenants while we have been living overseas. The lease is this a dumb strategy? Buy 20+ or as many properties in average+ areas which are cashflow neutral or just positive with low to average vacancy rates, or as many as i can afford Save as much $$$ for a buffer Wait 10 years, then on the assum


Hey guys, so quick rundown. In June bought a renovated 3 bedroom house off the housing commission with the intention of using as IP down the track. I borrowed 95% so I have a loan of 178k. With 60k in an offset. I'm currently living in home as you have to for 6 months.
I want to put air con, heating and possibly a car port as I will stay in it till match next year I think.
I've had a bank valuation come in at 240k.
Am I better off using cash from offset for renos (approx 10k worth ) or financing with equity somehow?

And If refinancing, what should I do ?

Thanks guys!  

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Don't refinance, just get a loan increase and credit back your LMI. Given your loan increase would be only 10k it might not be worth it as your LMI credit may be more than the LMI you would be charged.  

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Finance over cash any day of the week because you may need the cash tomorrow and they may not give you finance tomorrow.

Who is the lender because some lenders will have LVR restrictions on how high you can go?

Also is it an owner build or do you have building contracts, etc?  

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TheFinanceShop said: ↑
Finance over cash any day of the week because you may need the cash tomorrow and they may not give you finance tomorrow.Click to expand...
Gold !

ta
rolf  

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So I'm with CBA at the moment. How would I go about procuring the finance? What exactly am I asking for? Is it a line of credit, a loan increase. I'm lost :(

I only need 10k tops. I have no contacts. But I'm getting pretty basic stuff. A carport and air conditioning.  

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You will not have any issues with CBA accepting the GF.

1. Work with your banker or broker to ensure that you can ascertain the maximum valuation on build
2. Order an upfront valuation
3. If val comes back good then submit the application but make sure that the application is structured correctly.  

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Sorry to hijack thread, but I've a similar question.

We plan on buying next year some time, with an (unfortunate) LVR of probably 90-93% (if even possible, have to sit down with an advisor). We're looking at something around the 300k mark, though we'd like to get as cheap as possible within our requirements.

We want to buy a house in bad condition and renovate it (we've both had some experience) over 12 months while we live it in to claim the reduced Stamp Duty rates as first home owners (which I don't even think is much of a saving for existing homes?).

I've been reading Somersoft and API for a while but still can't understand how we can afford to renovate. We'll have no cash spare (exc. savings), and will probably spend somewhere under 45k (still doing spreadsheets) depending on condition.

How would we be able to finance 45k off the bat without a personal loan? I understand that we won't be able to increase the loan until we have some equity, but that might take time? We'd like to renovate and either sell/rent after 12-14 months depending on the market.

Is the only option to use equity or a personal loan? (Is it possible to increase from 300k to 345k or something?)

I'm a beginner, sorry for the silly questions.  

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If your renovation will add value you can get a construction loan for the renovation but most times it won't stack up with a bank valuation.  

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Aaron_C said: ↑
If your renovation will add value you can get a construction loan for the renovation but most times it won't stack up with a bank valuation.Click to expand...
That requires permits and builders contracts etc. regardless, correct? We're hoping to do most of the work ourselves (will hire builders/sparkies etc when required) and not much structural modification. I'm pretty sure permits for new fences and that sort of stuff won't valuate to much.

I get 45k is a lot for a reno hence the implied suggestion that we might be using a builder - but we're just looking for something that just needs to be ripped out inside, not really modified.

There's Commbanks 'Renovation Loan' which I'm pretty sure is just a rebranded personal loan - though I can't find any details. It seems like unless we can qualify for a construction loan (means more money for a builder, less involvement for us - which is not preferred) a personal loan is the only way to finance it.

We might have to find a sweeter spot with a smaller renovation cost.  

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If you havent got borrowable equity in the property, and you dont want to engage a builder, then you have to arrange finance other than a home loan.

This could be a personal loan, a credit card, or a loan from family friends etc. The idea being after the reno, the valuer will agree the place is worth more, the assessor agrees you can borrow more, and you can pay back the personal loan, credit card, dad etc with an increase of your home loan.

In reality people underestimate the cost, and over estimate the value add.
They get stuck with a half finished reno, or a finished one, that doesnt add anything to the value of the property.
This is why banks want a fixed price contract.  

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tobe said: ↑
If you havent got borrowable equity in the property, and you dont want to engage a builder, then you have to arrange finance other than a home loan.

This could be a personal loan, a credit card, or a loan from family friends etc. The idea being after the reno, the valuer will agree the place is worth more, the assessor agrees you can borrow more, and you can pay back the personal loan, credit card, dad etc with an increase of your home loan.

In reality people underestimate the cost, and over estimate the value add.
They get stuck with a half finished reno, or a finished one, that doesnt add anything to the value of the property.
This is why banks want a fixed price contract.Click to expand...
Thanks for the info guys. A personal loan for 30k (as an example) is only an extra ~$820 a month (fixed, four years) - which if enough equity is built up to use to pay off most of the loan, we'd save a fair chunk in interest. If not, it's still within our means and serviceable.

If we go IO, there's always the option to use the cashflow to pay back the personal loan too (though both loans at the time would be non deductible as it's a PPOR, but after 12 months...). I still have to look into IO/P&I, or at the very least talk to someone about it.

We're very conscious of overcapitalising - I'm trying to do as much research and analysis as possible in order to prevent it. But the best way to not overcapitalise is experience, I suppose.  

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