Hi PBP,
Sounds good, but a bit of clarification please…

I feel the property would appeal more to a buyer of rooming houses (rooms upstairs and downstairs with own kitchen and bathroom).

Does each ROOM have these, or does each area (upstairs and downstairs) have separate kitchen and bathroom? If the former is true, this sounds like it is set up for MHO and should be a great cashflow possibility.

Tell me more….

Benny

Hi PG,
$160k sounds low to me for a townhouse. What’s its condition, ‘cos a quick look at Woodridge’s median values over 5 years tell me it should be fetching more today. Add to that, Bne’s prices have languished these last few years while Mel and Syd screamed up. Bne missed out – is it yet to run up a bit as everyone gets priced out of Mel and Syd? Could be.

Meanwhile, it sounds like this should be cf positive, so not too hard to hold – is that true? Is it worth taking a hit on its capital value to allow a better purchase somewhere else? Could it be a candidate for a different letting style with better returns? Or is it in need of a reno? What if Bne were to grow 20% in the next three years – would that have you wanting to hold on, or do you just want it gone anyway? Tell me more…..

Benny

Hi Cal,
There’s quite a bit to it – I suggest you get in front of a qualified adviser before going ahead with this. In a nutshell, there might be better ways…..

I’ve estimated that expenses relating to the investment are roughly $15K annually (inc. loan interest payments). Does this mean that $15K is taken off my tax bill?

The short answer to your question above is NO – expenses are not deducted from your tax bill. But expenses can become deductions; they are then subtracted from Income and less Tax is paid because of that lower Income. Of course, rent is added and that increases your Income too. Tax will be paid at your Marginal Rate after Income and Expenses have been applied to arrive at your Taxable Income.

A simple example for your understanding:-
You have a rental house – you receive rent of $10,000 a year, but have expenses of $15,000. Thus a $5,000 loss. This loss is subtracted from your other Income (presuming house is in your personal name) – e.g. you earn $80,000 as a PAYG worker. So taxable Income is now $75,000 and you pay less Tax because of the lower Income. Marginal Tax Rate is 32.5% (not including Medicare of 2%) so you get a Tax Refund of 5000 x 32.5% = $1625

You might be better off to sell and keep the whole equity gain to yourself (assuming this is your own home, so no Capital Gains Tax would be liable on sale). Then all of the profits are yours to keep, to use elsewhere.

Note, I am not a qualified adviser, so seek advice from those who are. Who knows – maybe someone else replying will be qualified and can add more value here,

Benny

Hi Henry,

Hi I saw your post that you want someone to take over the course that you are currently learning, I would like to do that, but before I do I would like to know what is the price of this course, also when does it start. thank you I await you reply.

You seem to be referring to Jack19’s post. Let me help there – Jack had requested anyone who was interested to PM him – that means “Send him a Private Message”.

To do that, simply scroll up till you see “Jack19” then click on that name. On the new page that opens, select “Private Message” and follow the bouncing ball from there.

Hope that helps,
Benny

Hi Flynn,

i cant seem to find your STEPS program. is it a course that i can purchase or is it just a forum? if you could please send me the link that would be great!

I am hoping this might help:-

https://www.propertyinvesting.com/topic/5055124-investment-detective-replacement-software/#post-5055133

Benny

Hi Traca,
Before going with this group (they may be OK or they may not be – I don’t know them) do use the checklist in the following link to appraise their operation.

https://www.propertyinvesting.com/topic/5023872-property-investment-firms-advice-needed-please/#post-5023875

The post linked above goes into depth re “How you can tell if the group looking to advise you re property should be believed”. Does this group tick the right boxes in your eyes? If not, run a mile.

Benny

Hi Chamb00,
You said:

Another confusing issue I have is to buy my first home/apartment or an investment property first.

That is a good question. It is not one any of us can answer for you, however we can “point the way” for you to arrive at your own conclusions. Tom already mentioned that answers depend on where you are now, and where you want to end up (your goals). Your answers will vary from other folk, because of differing circumstances and goals. However we CAN point you to some thoughts – here’s one topic re “Which type of property do I buy first”:-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/#post-4697967

Just looking for some advice to get me started on the right track, I don’t think it is fair to come on here and expect step by step help but more in the direction of what to do and where to start. It can be confusing and scary and many of you would know.

True – any new thing we try can be quite scarey. First you need to learn what might work best for you. As Tom said, you appear to be well situated to start your journey as an investor. Some other thoughts (and subjects) are discussed in that same link – just scroll back to the first post and read through the Index of subjects – I’m sure you will find some of interest.

And then, the Training Centre (see the Home page) has a wealth of subjects written by Steve and others that will add to your knowledge. Meanwhile, Tom has provided you with a really good path to follow for now. Do come back to ask more as you strike problems,

Benny

Hi Sako,
“But what now ? Time to buy or is there something bigger that’s getting cooked in the background which we don’t know about ?”

Sako, the RBA has only the one gun to fire – some actually say it is a “blunt instrument”, so maybe it’s Thor’s hammer, rather than a gun. As was said on the news yesterday – “It is up to a Govt to make other changes that might be needed to stimulate the economy” (read fixing Tax bracket creep – they are voting on this right now).

But let’s look at an overall picture of the recent economy in dot points:-
o Wages growth has been near stagnant for years
o Inflation is through the floor (the RBA tries to keep it in a band between 2% and 3% – we are currently around 1%)
o Power pricing is strangling many – businesses both large and small as well as the “Mums and Dads” in the family homes. So money is tight.
o Thus, employment is less buoyant, so less people with “money to spend”.
o Factions are actively demonstrating against burning coal – which could kill one of Australia’s most important exports (worth around $60b per year?) stone dead.
o Yes, house prices have dropped, but that follows years of gains in Syd and Mel, so they likely would have further to fall than other cities as the economy stumbles along.
o Not too long ago, APRA and Banks were instrumental in tightening lending which forced a drop in house prices (but also further encouraged folks to “keep their hands in their pockets rather than spending”)
o Recent moves from the Govt pushed away overseas investors too, further diminishing the pool of buyers of property.
o A recent election might have led to Capital Gains Tax increases, AND other Tax increases from a Labor Govt (remember franking credits being at risk too?) That certainly had many voters on edge. How UN-stimulating that would have been to the economy had Labor been elected?
o Housing and the associated ancillary trades and retail outlets used to lead Australia out of recessionary times. But if the housing market remains depressed, where does the stimulus come from?

o All of the above promote signs of “wait and see” rather than “spending up large”…. but where are we now since the election? Has it changed that much yet? We are breathing a sigh of relief now, and maybe that has led to a SMALL uplift in auction results. But for mine, we are still walking a tightrope.

Sure, good deals will be out there, especially where some can’t wait for the good times to come and they MUST sell. But then, can YOU get finance? That is the other side of the coin. Maybe check that part out so you may be ready to move. Maybe it is still harder than previous…. but then, that is one for the brokers out there. Check one or two out, Sako, to see what they can do.

In answer to your question about “something bigger”, I guess that remains in the lap of the gods – any major world event will always impact on Aussie. But for me, I think the home situation (above) is far more relevant right now.

Benny

Hi Angalfaria,
OK, I understood enough from that question. You are wanting to know where this company operates. I got the answer from their website.

To find this answer yourself, go there, and click on “FAQ” (this stands for Frequently Asked Questions) and scroll down to where it says:-

>>> Question: WHAT AREAS DO YOU COVER?
>>> Answer: Certainty Property manages property across New South Wales. If you have an investment property in New South Wales, please reach out and a member of our team will be happy to assist.

Benny

Hmm, would I say this?

The most important advantage of real estate investing is LEVERAGE!

To be sure, leverage is a very useful tool – so long as we remember that leverage works in two directions (as well as leveraging our available dollars to purchase a more valuable property, it also magnifies any LOSSES should things turn bad). Leverage is useful, but it can be dangerous too.

To me, the most important advantage is the investor’s education, thus minimising risk while growing their investing options.

Benny