Me and my wife are in our late 40's ,we will have paid off our own house in about 3 months time, with 40k redraw capacity. We have a block of land doing nothing that is also paid off. I'm a shift worker full time and have alot of spare time during the day and my wife works part time as well so we have good repayment potential and banks are happy to lend to us. I used to be a carpenter so I am extremely skilled up in that area however my back is not what it use to be so heavy building work is not my goal, rather maybe renovations/mainanence instead.
We are thinking at selling the block to have about 150-200k capital to play with, rather than building as I dont think Im up to it these days.
From reading through alot of stuff over the past week its not as straight forward as it seems with protection Trusts, LLC's, taxation, negative gearing, positive gearing….etc.etc. Im a bit overwhelmed….i just read Steve McKnight's 2nd book as well..I dont think I want to build up a hugh portfolio of houses at this stage but that might change as I get more knowledageable.
I was thinking with the 150-200k I could possibley buy 3 investment properties with 50k deposits and a bit for reno's…and maybe rent them out…Am I being unrealistic? I thought a good place to start would be get some advice as well from an accountant who specialises i this area…I did a search and someone recommended Mark Koral, EFC Group in Adelaide…are there any others that someone can recomend?
Your thoughts and advice would be greatly apreciated…..
HI- yes there are a lot of talks lately about trust etc..but it’s not for everyone; i know of many investors who just buy under their own personal name.- speak to an accountant for this one.
With $150k, depending where you buy and what the average price is…yes you could buy 2-3 property. Note: you still need to pay for stamp duty, legal etc …so your $50k each.. becomes more like 35k each – but a 90-95% LVR lending could help, SO choosing lenders that will give you a discount for your LMI is beneficially.
Buy a place that’s slightly worn out- nothing major and since you have time on your hands you guys can do it up- paint etc…
Also given your age, how much you have in your super will become important at one stage in the lending process.
Regards
MichaelMick C | Shape Home Loans
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If the block is already paid off, what is the demand as a raw block of land? Are they rare in the area? is it well located? Would it have more attraction to a buyer as a home rather than a project?
Do your numbers and determine whether it will be better to build (use a project home builder & slightly upspec to suit the market) or to sell as is. If you sell now, you will be paying exit costs (agent/marketing etc) as well as stamp duty etc on the new purchases (you'll still pay all of these if you develop but the pain will be a little less).
Remember, if you have the construction skills & background use it for good (not for hard work).
Thanks Michael..looks like I'm on the right track……Im going to look for positively geared properties or neutralish ones if possible and try and balance out the tax advantage with renos …its a fine juggle by the look of things
TBH I realy dont have the headspace for building anymore…Yes the block would definatley make more money with a house on it, however its not a straight forward block or build. ie it has a 10meter diameter x 3.6m high concrete tank on it (old town water suply) and the dream was to convert the tank into a round house as I had done before for a client in my building days.
Weve had it for about 10 years and now I dont have the energy for such a complicated build anymore…I bought it at a bargin price and I think its probably better to use the money to buy a quick paint and patch type investment.
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