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Q: My brother, mother, and I want to purchase an investment property, but we were thinking to only take out the loan in mine and my brothers’ name. The plan was to occupy the property for 6 months so that we will be eligible for the first homebuyers grant (Mum would not be eligible as she has purchased property before). Can all three of our names still be on the deed for the property, if only 2 of our names are on the mortgage?
A: Hi Jared,
These are questions we get quite regularly and would be best to discuss more of the detail around your decisions. Including multiple parties can be quite complex, and you need to consider more than just the transaction you're entering into, but also what impact that will have on future borrowing.
I'm based in Lane Cove and would be more than happy to assist you and go over the detail and how to best structure your lending solution.
Feel free to give me a call to discuss.
Scott Juda
Finance Broker
0412 092 107
Scott@AccrueEquity.com.au
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Q: I run a small business with 3 staff and the business is going ok apart from staff issues. Their work is great but after 5 years I feel I would be making more money for my family if I chose to operate on my own. With super, taxes, paperwork and their personal issues.. it is wearing me down and I’d like to get some advice from other business owners who may have or have been through a similar experience. I do feel obligated to support them but at what cost, thanks in advance?
A: Hi Sally,
I would invest time in analysing your current processes. Are you doing things because that's how they've always been done or are there improvements (outsourcing or automation and systems) that can reduce the cost and workload, in turn, increase profits? There could also be other opportunities to smooth out cashflow etc.
Letting people go and feeling obligated to support them means you care about your staff. But if it's going to cost you your business, you won't be able to support them or yourself anyway. Sometimes you just have to make the hard calls.
But first, see what you can do to better utilise your resources (people, systems, customers, cash) to improve your business.
You could turn to a good accountant or business adviser, but shop around first to gauge their experience in your business field and if they have any experience in business management and dealing with these issues. I'm not having a dig at accountants, but like doctors, some specialise in certain things.
That's my two cents. I wish you the best of luck.
Scott Juda
Finance Broker
Accrue Equity
www.accrueequity.com.au
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Q: Hi, we took some bad advice a number of years ago which affected our super. We have a business that is going well and we pay ourselves quite well ($125,000 each) and we own our own home. Given the hit to our super should we look to reduce our salaries and put the difference into our super. We are in our mid 50’s and would like to know the tax implications of this strategy?
A: Hi Bec,
I can understand that completely. Being in finance for over a decade now, I have met a lot of great professionals, and some not so great as well.
From my experience, business owners that have great accountants that really know the rules of the tax system and provide great business and tax advice are one of the most critical people to have on your team. They will also be able to either connect your with some other planners that have a similar view or professional scope or be able to question/review the advice you receive to vet it too.
It is definitely hard to find the diamonds in the rough in all professions these days (builders, plumbers, doctors, lawyers, brokers, accountants etc) and no industry is exempt. I would just shop around, do your research, get feedback from people and professionals you know and ask lots of questions.
Good luck in your quest.
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Q: Hi,
My business partner and I have had a printing business for 9 years…. We both now want different things and I have agreed to buy him out within the next 6 months. Are there finance options to help me buy his shares?
A: Hi Raj,
I agree with both Brendan and Todd here.
There are many options and also legal requirements to consider.
I understand why you wouldn't want to put your home up as security, but the lenders also want to make sure you have some skin in the game. Many lenders will prefer to take some 'bricks and mortar' security as it's a more stable security that they can sell up quickly to get their money back in the event of defaulting on your loans. Although this is a general desire, there are also lots of lenders that lend against the business and it's assets, depending on the strength of the business, your contribution, and potential future earnings. When it comes to business lending, there is no standard one-way approach and we take your business and personal circumstances into account when assessing.
Scott Juda
Finance Broker
0412 092 107
Scott@AccrueEquity.com.au
www.AccrueEquity.com.au
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Q: Hi, we took some bad advice a number of years ago which affected our super. We have a business that is going well and we pay ourselves quite well ($125,000 each) and we own our own home. Given the hit to our super should we look to reduce our salaries and put the difference into our super. We are in our mid 50’s and would like to know the tax implications of this strategy?
A: Hi Bec,
I'm not a financial planner and can't give advice but it sounds like you need to see a good/reputable financial planner and accountant to give you some personal advice suited your particular situation, that also understands business operations and exit strategies as well etc.
I personally wouldn't be relying on information from forums.
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Q: I’m about to buy an investment property and will have to pay mortgage insurance to get the loan. Is the entire amount tax deductible and when can I claim it?
A: Hi Tim,
You will need to get some tax advice from an Accountant as there will be other things to consider with your tax deduction and you would want to make sure you're making the most of every available item.
I have had clients in the past claim (generally) the full amount of the Lenders Mortgage Insurance over a four year period (25% per year), although I'm not sure if that is still accurate. Find an experienced accountant who is also up to date with all the depreciation changes as well.
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Q: We run an I.T business and do quite a bit of contracting work with various government bodies. The terms are usually 30 days and most of the time things are ok but we are keen to accelerate our growth plans and would like to investigate business finance options such as debtor finance. Will lenders look at an I.T business for finance?
A: Hi Christo,
There are lots of circumstances to look at, not just the type of business. The strength of the business is also a key factor. Whenever you look at borrowing, every loan or deal is done on a case by case basis.
There could be a number of different solutions for you, but will just depend on the lender and their terms and whether is makes commercial sense for you to proceed.
Regards
Scott
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Q: About to start renovating the kitchen, bathroom and do some landscaping. We’re managing the project but because we have different tradies and suppliers coming through the house do we need to do anything with our insurance. What do we need to do to make sure we’re protected if the tradies get injured?
A: Hi David,
I can't advise on the insurance side of things, but on the finance side, it's important to make sure you have enough funds to complete the renovations while buffering for variations as well.
I'm obviously not sure how you're funding the renovations, although, if you run out of money part way through the project and needed to borrow from a bank, having no kitchen or bathroom (for example) can impact the security value as most lenders would deem it 'uninhabitable'. This would make borrowing the funds much more difficult.
Regards,
Scott
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Q: I’d like to ask if there a limit to the number of units on the one title lenders will look at? If it was 10 units would it be considered a residential or commercial loan? Thank you
A: Hi Charles,
Each lender will have different 'acceptable security' requirements.
Generally, any single title with more than 4 units on it would be deemed a specialised or commercial security by most lenders.
In saying that, most of the commercial lenders are still quite competitive when it comes to rates. The main issue my clients have had with this type of security in the past has been the lower LVR requirements.
I hope this helps.
Scott.
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Q: I'm currently exposed on the stock market, of which 60% is equity and 40% is a margin loan. Is 5.2% a reasonable rate or are there better rates out there?
A: Hi Jerry,
Erik has a point with his previous statement about borrowing against property will generally get you a lower interest rate.
I would recommend talking to a financial planner that is well versed in these structures and types of lending. Margin lending definitely has its pros and cons and you will generally pay a premium because of the added risk and potential volatility of the security and income stream.
As you may be able to get a lower rate with residential security, you will also be chewing up equity that could be used for other investments or purposes. On the flip side, you may be able to avoid margin calls.
I would recommend speaking to a financial planner (and probably your accountant) and obtaining professional, personal advice specific to your circumstances.
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Q: How can I look at a broad range of home loans to work out which is best for me? I really want to compare more than just the interest rate ?
A: Hi Rob,
One of the best ways to do this is to speak to a Finance Broker. It beats going from bank to bank and doing the run around yourself.
A Finance Broker will assess your current and future needs and find the right loan structure to suit you.
I think you're on the right track by not just comparing the interest rates. Things like service levels, product features, Internet banking functionality and linked products can make a serious difference to how well your banking can work for you. It all depends on what's important to you.
