Hi Foundation

If you are actually looking for holes in your theory, here is one that you may want to watch out for. Over the long term the median priced house you bought 10 years ago may now be in the bottom quartile. This may happen for example where new houses cost more to build than existing ones did. For the technical minded this is called a fallacy of composition ie what is true for a group as a whole may not be true for any individual member of that group.

Just for the record I’m mostly with Dazzling on this. If you are in a motor boat the main factor that affects where you end up is NOT the tide.

Cheers[biggrin]
PS
JTW I enjoyed and learned from your contribution- I for one won’t be trying to tear it apart.

Hi Ron

Here’s a queensland company that does it. Lots of hints and useful info too eg there may be a useful extra $ in just buying a small local block and relocating the home. Costs suggested by Drake are about half the house cost eg if you found a home at the site like yours and the price was $100,000
it would probably cost around $50,000 to move it and attach services etc so your all up cost would be Land plus $50,000.

http://www.drakehomes.com.au/

If this is too small a deal for you I may be interested in working something out, if it is near Brisbane.

Cheers

Hi Lumwood

I have used a time budget for many years with sometimes excellent and sometimes just worthwhile results. I have a full time job and only budget for core focussed activity that I want to achieve in excess of this eg time budgeting allowed me to complete my accounting degree on a full time basis whilst working in a demanding full time job. My current budgeted time is 12 hours per week and is very tightly focussed in 1 hour segments – I use a cooking timer for the 1 hour and totally concentrate on the subject of the session- this also means I can coast at other times knowing some essential things are taken care of.

Cheers
[biggrin]

Hi Steve

Here’s my three

1) Tips and suggestions on sourcing and assessing a team and the skills to acquire to effectively focus them.

2) Best ways of achieving worthwhile returns and building wealth in a steady or falling market where affordability is a big issue

3) Where’s the best place to buy cashflow positive properties?[biggrin]Just kidding

Real 3)Breaking the comfort barrier

I enjoy your newsletters for the content and the occassional bargains.

Cheers

Hi Wallace

IMHO ( which i’m hoping means ” in my humble opinion”) there are good deals everywhere – what you need is the education to see them and the time and effort to look.
EG1 the $45K deal mentioned by plp property
EG2 a few months ago I looked at a straightforward residential cash flow neutral property investment for $65K within about an hour from Brisbane CBD Rent $130pw( but high body corporate fees)
EG3 a serrviced apartment was recently offered in Chermside in the northern suburbs of Brisbane for $85K
EG4 There is a studio apartment currently for sale in East Brisbane only a few kilometres from the CBD for $89K. Rents at $125pw

Cheers[biggrin]

Hi Darren and Kerri

Though I agree with Dazzling there are two techniques that might help besides actually learning how to do it yourself.
1) Ask for references i.e. two landlords and two tenants who you can talk with about the PM – and then talk with them.
2) Sit in a real estate office of a candidate manager and listen- you can look at pictures of houses or read brochures or whatever but there is a good chance you will hear a PM on the phone and you will get some idea of how they deal with situations.

Info on being a landlord can be found at
http://www.reiq.com.au/
And you may care to give astorb a look at
http://www.astorb.com.au/advice.html

Cheers
[grin]
PS I’d also think seriously about getting Landlord insurance.

Hi JD

I’ve been studying some property things for a while and here is one I think may assist your situation.
The basic idea is to turn a negative cash flow property into a positive cash flow property.
The strategy is called Lease/ Option and there are people in Australia who specialize in it.

Here’s how I think it may work for you
Your property is currently valued at $240, 000.
Add 20% for your share of the portion of possible future growth $48,000.
So you need to find a buyer for whom the following deal is attractive.

They pay $8,640 for the right but not the obligation to buy your property for $288,000 at any time within the next 25 years. Until they exercise that option they lease the property from you at a rate that would pay off $279,360 over 25 years. ($279,360 is $288,000 less the option fee of $8,640). If you used a rate of 8.7%pa variable (i.e. 2% above standard market rates.) the lease payments would be $2,287.26 per month. You would also have to be prepared to reduce the balance owing if the option was exercised by the “principal” paid off by the lease payments. I imagine there would be plenty of people who would be almost certain that Inner Brisbane prices will go up by more than 20% in the next 25 years and this would be their chance to make a profit on that growth. They would also pay rates, maintenance and body corporate fees so you would need to be sure they could comfortably pay around $650 per week.

You would then have cash flow in of $2287.60 per month and cash flow out of around $1,500 giving you a positive cash flow of $750 per month to invest a little more wisely.

I have just outlined this strategy – you would need to set it up properly and get good professional advice however if you can pull it off it would certainly turn your situation around.

I also think you deserve congratulations for having a go.

Cheers

Thanks Redwing – very useful

I like the Region selection in advanced too

Cheers

Hi Kit Kat

You would also have to declare the rent as income and be prepared to defend an accusation that the whole arrangement was not contrived just to gain a deduction- which it does appear to be.
As for the FHOG itself, if your parents provided financial assistance you need to be very careful about disqualifying arrangements.
As the Mortgage Advisor says, I would suggest you seek advice from the FHOG experts. I think you need that for the tax as well- might work out, but only if you are VERY careful about how you do it.
Cheers

Just to add a bit to what the Mortgage Advisor has said.

The continuous 6months has to commence within 12 months of completion.

From the QLD OSR website:-
All applicants who enter into an eligible transaction on or after 1 January 2004 must occupy the home as their principal place of residence within 1 year of completion of the eligible transaction and remain in continuous occupation for a period of at least 6 months

And it may pay to be aware of the exact “completed” definition i.e.”entitled to possession”, not necessarily contract date or settlement date,in the definitions schedule to the act.

The legislation
http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/F/FirstHomOwnA00.pdf

The State revenue site in QLD
http://www.osr.qld.gov.au/gas/fhog/index.htm

Cheers