Forum Replies Created
- Originally posted by Terryw:Originally posted by The Mortgage Adviser:
How can the ATO slug you for renovating your PPOR and selling before buying another if you live in each property while renovating?
Robert Bou-Hamdan
Mortgage AdviserIf they think you are doing it as a business, they can. It would depend on how many times you h ave done it and how quickly, and possibly the reasons you give.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]correct, you don’t want to get too carried away with claiming your PPOR exemptions. what is reasonable is the big question….
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
Bulls and Bears are not the same as Wishful thinkers and manic depressants
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
Originally posted by lei:Sorry forgot to mention calling the town planning department too. I found that say with Karratha the real estate agents are saying “THE TOWN IS BOOMING , SO MANY NEW PROJECTS ABOUT TO START”
When i called town planning they told me everything is still in early stages nothing had been passed and your looking at, at least two to three years before anything is passed if at all.k
what the?? have they looked out their window lately?
http://www.megainvestments.com.au
Extensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
the biggest problem with developing/ reno’s etc is cashflow. Typically people underestimate the time frames involved. When every problem has been ironed out, every consultant etc (except the REA) has been paid and assuming your head is still above water, THEN you can get paid (a month or so later allowing for settlement) – assuming you have made a profit that is!
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
real estate agenst love change in the market, just as stockbrokers do. They don’t care if prices are going up or down, so long as there is a deal. I would expect the mortgage broking business to be linked to these sales.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
I suggest you forget the arguments over the price of oil per gallon in the US vs chicken feet in China and focus on matters a little more micro. to address your points:
– likelihood of price correction: depends on which market you are in. In Perth I would say very unlikely as the market is still rising. I believe Sydney has dropped quite a bit, jury still out on where that is heading.Qld is still being promoted as a growth market but I really don’t know. SA you never hear about so maybe it’s the unturned stone.
– renting has always been historically cheaper than owning in this country, excluding the PPOR concession implications which is only relevant in a strong market.my opinon… if you are a disciplined saver (and you need to be very honest here) and you were in Sydney, I would continue to rent and save hard and pick somewhere up in a year or so. Don’t leave it too late as the bottom tends to come and go before you know it, but you should be able to sense the mood of the market. In this time you should become intimate with a couple of suburbs in which you wish to buy. Try some agressive offers and see how you go. In all these discussions about rising and falling markets you need to stay focussed on your particular deal, not the vague notion of median prices. If you can get somehting suitable that is below market value – go for it!
make sure you keep your tenancy flexible of course.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
are you lot still working up a lather? maybe we need a new forum – Statistics to Support Any Given Argument. Could be quite a database that is constructed.
Not sure what all the arguments are about – things really ARE different this time. the world economic situation is so dire and unmanageable (and I have the stats to prove this!) that property is finished with as an asset class [wink] I am interested in this concept of putting cash in the bank… any ideas on what sort of leverage I can get?
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
“Regarding the state of the economy, if the outlook is rosy, why did the RBA hold interest rates?”
fair crack F – if they raised rates every month the economy was looking good they would be at 100% by now.
The chain of events you have predicted above has an incredible amount of ‘ifs’ in it. Any piece of that could easily come unstuck e.g. change in trading currency for oil, attack on North Korea, continuing growth in productivity, significant change to immigration, collapse in commodities, boom in commodities. Interestingly, when the AUD was last in the doldrums there seemed to be a total discoonect between interest rates and the value of the dollar. The conclusion at the time was that the AUD is a lifestyle currency and is driven more by sentiment than real currency demand.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
This doesn’t surprise me at all. In any market where the price goes up and the quality goes down the volume of demand will ease. I think the problem will get worse as labour and material rates keep heading up.
as for the smaller investor… there has been talk for some time now that an undersupply of new apartments in the pipeline may result in problems down the track. Developers are gettting scared of reports of a glut of apartments, so why build when there is no one to buy your product and your construction costs are going through the roof? Simple answer – chop the development. The trouble is these projects are long term, the demand / supply imbalances are short term. Picking up a new apartment off of a distressed buyer could be a good addition to your portfolio.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
had a half hour chat with a lawyer the other day, got a bill for $2500. rang to ask what it was for and she said she had no idea. then i got a message later saying that she had got a bit carried away and would knock $600 off. makes me feel much better. I would hate to see a lawyer if they were being paid a lot!!
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
speak your mind Mike! [blink]
for the record, IMO I think preoperty will continue to inflate over the long term as I can’t see why it would be “any different this time” – but then again I don’t subscribe to this theory that the world never changes. So theoretically the develop and hold concept SHOULD work.It is just counter to the theory (Buffet I think said it?) that wealth is created by trade? I guess tax are created by trade too!
I am sure Michael will have an interesting reply….
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
I should qualify that last post – if you hold the property for the very long term I think the strategy would work. You just need tobe confident that you have the wil power and the belief that property will contnue to inflate as it has done in recent decades. (specifically the effect of the boomers on the property market)
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
If you have $93k of expenses and only $50k to call your own you are bankrupt!
The point being made is you can take $50k as cash, or leave it there as $93k cash and a debt of $93k secured against the property. The cashflow from subsequent developments funds the slight negative gearing on the earlier properties. My problem with this whole scenario is that a new building will drop down significantly in value (like a new car) once it has been lived in as you are dealing with a retail product, so you need to consider whether that $93k asset is really worth $93k, or if on the second hand market it will be worth $50k, in which case you may as well pay the tax and run with the cash.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
I would advise not rushing into another mistake… the biggest cost of property is getting into and out of it, now that you have paid to get in you may be better off holding for a good period of time and just following a standard negative geared investment pattern. If you really need the cashflow, perhaps find a property to offset it.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
not having been to the class, can you explain why a problem with a property would give it a higher yield? I understand that the capital value would be lower because it has a problem, but wouldn’t this reflect in the rent? and if you do a reno won’t your yield become nil whilst you do it? then when you find a new tenant it will just be like any other property.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
yeh but most of us don’t mind a drop of the ol’ vino so we can’t really lecture them about that one! plus one drink won’t addict you, unlike say nicotine which I read is more addicitve than heroin?
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
they are a little dearer to develop as you have to run the drive right down to the back and put the drains in etc and they are a bit more awkward for the builder, but a $40k discount on the blcok sounds like you may be looking at something good. here’s so,e sales evidence for you to look thru:
Address Sale $ Date sqm
15 EMDEN LINK PORT KENNEDY ROC 120,000 2/02/2005 579 M
9 GRADO L PORT KENNEDY ROCKING 99,750 29/11/2004 351 M
61 MONTORO DRV PORT KENNEDY RO 68,265 19/11/2004 533 M
50 WITTECARRA CR PORT KENNEDY 95,000 8/11/2004 510 M
46 ENDEAVOUR DRV PORT KENNEDY 108,000 21/12/2004 546 M
3 CARPENTARIA DRV PORT KENNEDY 98,000 5/12/2004 583 M
44 WITTECARRA CR PORT KENNEDY 98,000 6/11/2004 510 M
115 SAN SEBASTIAN BVD PORT KEN 106,000 24/11/2004 590 M
26 WITTECARRA CR PORT KENNEDY 105,000 6/12/2004 510 M
31 CHINCHILLA PWY PORT KENNEDY 105,000 14/01/2005 600 M
5 LIMOGES ELB PORT KENNEDY ROC 70,000 7/12/2004 495 M
52 ENDEAVOUR DRV PORT KENNEDY 103,000 12/11/2004 507 M
3 PASTRANA CR PORT KENNEDY ROC 103,000 9/01/2005 592 M
2 LANGSTON CL PORT KENNEDY ROC 107,000 4/12/2004 518 M
68 ACHIEVER AV PORT KENNEDY RO 108,000 6/02/2005 533 M
4 BOGUE WY PORT KENNEDY ROCKIN 117,000 8/01/2005 581 M
54 ENDEAVOUR DRV PORT KENNEDY 103,000 12/11/2004 512 M
5 MONTELIMAR ELB PORT KENNEDY 107,500 18/11/2004 576 M
11 BAYONNE GDNS PORT KENNEDY R 85,000 21/01/2005 518 M
70 ACHIEVER AV PORT KENNEDY RO 107,000 17/12/2004 543 M
8 VERIN L PORT KENNEDY ROCKING 98,400 15/01/2005 354 M
24 MONTORO DRV PORT KENNEDY RO 105,000 1/12/2004 600 M
43 PIMENTO CIR PORT KENNEDY RO 110,000 26/01/2005 520 M
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
you definitely need to do your own research as sales reps are just people with opinions at the end of the day. they could well be right that townhouses aren’t right for the area… some areas don’t lend themselves to the resale values that you need to get to justify the extra expense and construction for going to 2 storey. half of the public is too old to walk up the stairs anyway so they sure won’t be paying more for the privilege of 2 storey! some development sites are better off being sold as is than developed. why?? because a lot of the genreal public believes development is easy and they forget to factor in many costs, so their development feasibility allows them to pay more for the land. I have seen some developments go ahead where I reckon they would be lucky to be making less than 10% gross for all their trouble and risk.
http://www.megainvestments.com.au
Extensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
“I have been wondering how you would go about fighting BGC to finish a house”
good point!
given that a lot of the shortages were originally for bricks it may have helped, but brickies are in equally short supply. as are roof tilers, steel and just about every other tradesman and material, so perhaps it wouldn’t be helping.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
yes it is very common. you just buy the land as usual… put down the required deposit of say $1,000. then when you on-sell it you set the settlement date to be simultaneous with your purchase. you will have to pay the stamp duty so factor that into your calculations for your re-sell price.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
