The information you need to determine what you can do can all be found by searching for the property at http://www.townplanning.com.au. This will give you a map showing zoning and any overlays for free, as well as the section of the planning scheme that relates to your property. To check for easements and potentially other things that could effect the particular property you need a copy of the title, you can also get this from the same web site. Hope this helps.

Unless you think that Government and bureaucrats know how to spend your money better than you do then there is no choice but the party that promotes the least economic interference. Out of these options the Liberal Democrats are clearly the only rational choice.

You absolutely should get some legal advice re the settlement and see if you can optimize your ownership and loan structure.

Hi Hemi,

I haven’t looked at a scenario like this for a while so I’d have to refer the question to one of my brokers who is at the coalface. While I am sure you can fund a deal like this still, there are a few issues you may come up against. Most lenders don’t like the idea of you not putting in any money and some won’t agree to the vendor financier securing their interest behind you, particularly if you are looking at a deal like this because you don’t have any savings. For a property to be worth only $100K it must be in a small country town where there is very little in the way of settlements, this means you are likely to come across post code restrictions and also issues with getting the property valued if there are no real comparable sales.

Without knowing anything about the deal, it seems like it would be a lot of work and management with a lot of forward risk without the likelihood of very high returns. Having said this I’ve experienced plenty of examples of virtually worthless land suddenly becoming very valuable. so what do I know!

Regards

Great post Benny,

I wouldn’t be too concerned about having the properties in personal names, most people start out this way. It would be worthwhile making a full appraisal of your structure and work out a strategy for future purchases and also what to do with any money crystalized from the sale of any of the exiting properties. All investors should do this periodically, as your situation is always going to be fluid.

Regards

Hi Frances and Attila,

I would encourage you to look at what you need the most. That is, if you already have an income but not a lot of capital behind you, then you should really look at improving your capital position as a first point of call. A more active strategy such as renovating, revaluing and accessing the manufactured equity for further purchases is a good example of a strategy many investors have employed successfully. Cashflow is obviously important, but it isn’t the only thing you need to concentrate on. Not knowing your personal position I couldn’t really comment on your current plans, they might be very suitable, this is just some food for thought.

Regards

Stamp Duty is an absolutely horrible form of taxation, it makes entering the market extremely difficult and inhibits mobility which has both a social and economic impact. The fact that its removal would increase the number of speculators is not necessarily a bad thing, speculators and traders would increase the liquidity of the market, as they do in the share market, and as such make it easier and quicker for others to transact. The introduction of a land tax on all real estate, as a replacement, would have the effect of forcing people to use property more efficiently eg there would be fewer single people in large houses.

Having said all of this, I would have an issue with the current system being reformed in isolation to the rest of the tax system. Land Tax is a very efficient tax as it can’t be dodged, The Federal Government, if it could work with the States, could conceivably offer major personal tax cuts as an offset against the introduction of a broad land tax, with both themselves and tax payers being better off. It’s an interesting argument regardless.

Regards

Hi Dana,

Nobody has a crystal ball. You seem to have thought through your options pretty thoroughly so you should be happy that whatever decision you ultimately make, it has been an informed one. Only the future will tell if your decision is the best one or not.

Regards

Hi Elizabeth,

Your current lender would be determining your accessible equity using the valuation they have on file, which may or may not be old, depending on when the loan was set up. If it was a while ago, you may have more, the same or less equity available, depending on the market you are in. It would be well worth your while engaging a broker to look at your current situation, so they can advise you on structuring, and also get them to order a bank valuation so you know for certain what is available to you.

Regards

Hi Dana,

The only answer you will get to that question is in hind sight. Sometimes units perform better, other times houses, depending on the time frame you are looking at and the demographics of the market. In the very long term land does not lose value while buildings degrade, which would suggest something with land content should be a better investment but you are looking at very long time frames there. If you already have an investment in Newcastle, it would seem sensible to make the next one in Sydney, from the point of view of having exposure to both the markets you may want to live in. In your position I wouldn’t be too concerned about the type of property, more the location.

I hope this helps.

Regards