Women eh! Awesome post HB. Like the 35 vs 55 comparison but at the rate which the govt is going, I’ll be lucky to get it out at 65! Thats like another life time for me. So I don’t really focus on super right now (although the tax breaks are great). Is that an incorrect way to look at it? Touch wood but I may not even be here in 5 years time so wouldn’t mind enjoying as much profits as possible. Any financial planners out there with advice for someone who doens’t believe or rather trust in what the govts doing to our super. Offshore accounts, investments…? Nothing illegal off course…

If they are selling OTP new homes, I can’t see how you are only paying duty on the land. Are you settling the land first and then choosing your own builder or do you have to use Mirvacs? I would’ve thought there would be 3rd line forcing issues at play here but might be wrong. I digress. If you buy OTP, the developer has to factor in the cost of GST which is included in their sale price so you ultimately pay for the tradies and construction GST component. Similarly if you built a home yourself, you’d be paying GST on the construction material plus labour..etc.. which is considerably more than paying stamp duty on an established home. Plus you can’t claim the input tax credits for the GST paid.

Hence I’m not quite sure where the passing on of savings comes from. Perhaps I have analysed incorrectly all this building stuff.

As long as you haven’t lodged an ITWV Form. I think if you sold a property and will come into a large capital gain, might have to resubmit a a new form. I figure the ATO might not look too fondly on you having to pay back a large chunk in April 07 irrespective of the chunk arising from a capital gain rather than an ambitious “mis-calculation” of your deductions. I guess may just have to argue the change in circumstances occurred too late in the FY. I mean, does anyone voluntarily provide tax instalments to the ATO if not specifically requested from them?

The old trading adage – let the profits run and stop your losses. Would you have sold Nasdaq at 3500 when it was on its way up to 5000?

WA is still relatively affordable. Until I get to a point where I can sell 2 WA properties to buy one house in Syd, then its a sign to me that we’re sort of getting to some kind of equilibrium. Why would I pay $450K+ for a 30-40 year old 2bed room unit in Syd when I can pay $350K for a 4×2 in Mandurah with better yields, depreciation benefits and potential capital growth?

If you have a look at median wages, all the capital cities don’t vary by much – $4K max but the disproportionate house prices??

BTW Shwing, don’t be so quick to come back to Syd. You’ll need very deep pockets to buy IPs over here still. Vendors aren’t discounting their properties by 10-20% so not many bargains around. We’re in for the long haul before the next cycle. Just keep picking off the undervalued suburbs cos its that much harder in this cycle to just buy ordinary and ride the wave.

I guess young people are doing it now cos they simply can’t afford to buy a house in the cities. Simple as that. If I could afford a PPOR inner city, I would. Instead we have to buy in outer suburbs or interstate when historically the best performers are in the cities. Its nice that the market is flat to negative in the cities in the East. Investor demands are pushing prices in the regionals.

But make sure you have a clear exit strategy. When the cities start moving again, you want to be in the game. Our parents have traditionally done very very well from buying and holding PPORs CGT free. Food for thought…

The shortage in coastal WA is so dire that they are now acting as buyer’s agents. Yep, buyers pay their fee to entice vendors to sell. Couldn’t one do the door knocking themselves….? The RE agents are reaping it in. The principals must be laughing all the way to the bank. Not a bad way to make a quid considering the amount of value add they provide to society. Lets not get me started on how much our teachers, nurses and social workers get paid..

Hi Michael, thanks for your reply. Appreciate your comments seeing you’re probably one of the very few in this forum who has seen AND been involved in a few cycles in Oz. I gather buying pre-cycle boom and buy under market value is a strategy which you employ. And something which you can add value. Easier said than donw I’m afraid in this environment. Nevertheless, thanks for your comments.

Pipeline builder wrote:

I strongly belive I will be retired by 30, this was reinforced this week by meeting someone that is 45 has 2 kids and earns as much income in their job as me, boy was it a wake up call.

If anyone can show me a faster way to earn 40K passive income in under 12 months than what I did please contact me, my email is [email protected] or pm, i am welcome to hear how.

Sorry pipeline builder but how may I ask do you intend to retire by 30? I couldn’t really find a post with the $40K passive income strategy you were talking about. Are you referring to your FT job?

Before everyone jumps on to these deals, remember that its minimum 30% deposit & you’re paying around 7.5% interest and 15 year P&I type loans. You could probably get 5 year Interest only but not sure if you need to jump serviceability or other credit hurdles. Any broker who would like to enlighten will be much appreciated.

Also for that kind of $, I don’t think it will be that big a piece of dirt you’re picking up (perhaps thats why Dazz is happy to let us fight over the scraps)?

Do your research, its not without its risk. I have a building – 2 shop fronts with 2 x 3 bedroom units upstairs. Net of 9.5% including agents comm with resi upstairs so pretty good deal but just found out last week that one shop is intending to close its business. Just unfortunate for the business – perhaps I didn’t do my research enough but can still service loan without that rent. Lease on that shop was sewn up for 3×3 with 2 year to go. We’ll see what happens, agent says should be able to find new tenant to assign lease or tenant pays the difference – fingers crossed. Welcome to the world of CPs.

Hey Carlin, I’m thinking Redwings saying the same thing. Accessing equity is through getting a Top-up on the existing loan/property.

And it will be too late when you wait for the market to plateau. It could be 10-20% more than today. All the experts don’t think you’ll get the 20%+ returns again in WA in 06 but at least high single digits which is way better than negative or flat in Syd and Melb. Happy hunting!