Forum Replies Created
Sorry to bring this topic up again, but I’m a little confused. From the sounds of it, most of these reply are centered around buying the serviced apartment from the construction company I take it – or from the outset anyway (One post talks about a furniture package).
I was looking at one (in Melb CBD) where the agreement has been in place for some time now (not sure how long) but I presume it is in it’s second lease term (just started). The stated return on the current lease is approx 7% nett, with 3% annual increases, until 2011. Does this constitute a rental guarantee? I haven’t seen the lease yet, but from my experience with leases (admittedly I only have dealings with shopping centre leases), the rental is fixed for the term of the lease. Also, it states that has a further 3 five year options, is this when the rent can go backwards? What happens if the options are not taken up? Does it still have to be a serviced apartment, or can it be converted?
From my calcs, if it was done interest only for the first 3 years, even at 105% lend (deposit would have to be secured against our exsisting residence I suppose) it would be positive, and then after that we could do principle plus interest and still have cash left over, assuming there is no massive hike in interest rates. Even if the property did go down a little, if we kept it long term it would eventually be paid off, with earnings, so effectively we’ve got an asset which we’ve paid nothing for.
What do people think? Sorry to re open this debate, but the answers given previously don’t seem to cover these circumstances…..
Yeah, I looked into this. Apparently the reason for the restriction is that you don’t need a full building permit/property inspection by the council. I contacted the subdivision board, and they say it is one parcel of land, yet the council rate each property seperately, but wont allow the block to be classed as a dual dwelling block. (Don’t you just love councils – they get their cake, and eat it too!) They are also about to introduce a law that doesn’t allow blocks to be subdivided under 2,000m2, so chances are it can’t be subdivided. I’m at a loss as to what to do next… any ideas? Does anyone know any good solicitors in Vic which I could contact? I don’t want to let this one go just yet…….
Cheers guys,
Apparently in this council, this is quite common – they allow a second dwelling, but only for specific purposes. I know this because my sister recently looked at another place, for that exact circumstance. The owners of that property were told that unless they sold to someone in similar circumstances (ie: elderly dependant), the second dwelling had to be removed before the house could be sold. I’m not sure with this property, but I will follow up with the council what the restrictions are and how they plan to enforce them. Also, we were hoping to finance 100%, but have a LOC, so can borrow only 80%…
I’ll keep you posted on any development this week.
Thanks
Ash
Originally posted by hb:Hi pipelinebender
2 k and property investment…forget it.
think outside the box?
I agree
30 years ago at 22, i bought my first IP 15K, interest only loan.
3 years on i sold it for 20k, and after subtracting costs it worked out i made 2k.
my thoughts about the property investment game….. “its a mugs game”.
i took that 2k and bought a business that was going down.
first couple of years where hard work..very hard work 24/7
its growth was fantastic, but to much growth was causing problems as well.
TAXES far to high (third year in a personal tax bill 120k)in todays money over 250k
that created an urgent requirement to understand what “profit and loss” and “balance sheets” and “tax planning” was?
26 years down the track…was it worth it?
That business is still operating today, it employees 6 people most of who are on a profit share bases.
The business has been a great vehicle to building wealth (both in IP’s and personal income)
So what’s my first IP worth on todays market..350k
the business…1m
and if i had kept the IP, what would i have made over 30 years of income 140*52*30…220k
over 26 years the business profit 10m
i didn’t retire by 30, nor 40 (private education and an expensive wife made sure of that)
but at 50, i am semi retired, and have a very comfortable passive income.
Now i have time, and cash, to explore IP investments.looking outside the box?
worked for me
might not for you.harry
Well, whilst I agree property isnt the only way, during the 30 years, were your working in the business? If you only had property, how hard would you be working? My father owneda business for near on 30 years, and although it provided him with great income (enough to support 5 children, and still live fairly comfortabley) he died whilst still in the business, and although the calc’s will show the business is worth $1m+ (based on earnings, etc), it is not as easy to find someone who will pay that for a business. I think property is a much better way…..
