Ben>>> “The look of their site doesn’t instil much confidence though.”

+1 to that comment

Benny

Hi Steven,
On page 1 of the “Big Picture” thread is a post about Offset Accounts. You can find that one here:-

https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/#post-4697973

In the embedded link, there are several useful posts relating to Offsets and how to use them.

Then, on page 2 of the “Big Picture” thread is a post about “GOTCHA’s” – it reads like this:-
“The first GOTCHA is to do with my old mate, the OFFSET ACCOUNT. But, it could be about any other Account too – so do read it, even if you don’t have an Offset – and relate the thoughts to your account (savings, redraw, whatever).

“The first GOTCHA relates to how Mixed Loans can be created by not thinking about HOW to refinance. Or by withdrawing both deductible and non-deductible amounts from any existing account. Once a MIXED LOAN is created, it becomes more and more messy – so better to NOT make it messy in the first place.

Go to the link below to read more where @terryw shares some extra REALLY useful and important information:-
https://www.propertyinvesting.com/topic/4997918-redraw-from-an-offset/#post-5029521

———————————————————–

Steven, I hope the above words and links help to shine more light on the subject of Offset Accounts for you

Benny.

Hi all,

Also, what is a building square and were did it originate from?

One square (in the old measure) was 100 square feet. It was easier to say “Twelve squares” (just two syllables) than it was to say “Twelve hundred square feet” (5 syllables).

Then metrics came along – they don’t quite match with the old measures, but are sort of close – close enough for me. As a simple bloke, I used a simple formula – when we don’t need accuracy, “near enough” will do. e.g. If someone asks me the length of a building, I might say “About 10 metres long!” That could be anything from 8 metres to 12 and still be “about” 10 metres. Of course, if you want accuracy, then get out a tape measure or similar.

So, my simple formula for area of house was to multiply by 10:-
12 squares is 12 x10 = 120 m2 (give or take)

And, if wanting square feet, same again >>
120m2 x10 = 1200 sq feet (give or take)

Of course, where total accuracy is required, use the figures provided in earlier posts. But for checking out a property first time, “near enough” will often do, especially if you are using the same “near enough” formula to compare several properties.

Benny

The long posts would have lost almost all readers.

Hehe – well some die-hards are still here !! :p

What I’m trying to say is that the formula you’re using is lacking dimension of time. Rents grow with time so $20K rental income today = $100K tomorrow so sometimes even 1 property is enough to be ‘successful’ :-)

How does adding a time dimension change your calculations? Probably significantly…

True Ethan, at least in part – but then, if we are to look at how rents have moved with inflation, so too have living costs. So the $100k needed to be “rich” today would need to grow over time too, thus necessitating owning the five IPs. The one thing that doesn’t grow (depending) is a Mortgage, so long as one doesn’t borrow to buy more, or to draw living costs from Capital.

I hope others do get to read this – if only to test THEIR theories against one or other side of the argument.

Benny

Hi Dave,
I went looking for this topic as it expands on what has been discussed so far re CGT and a PPOR.
https://www.propertyinvesting.com/topic/5031769-retrospective-property-valuation/

The REALLY important bit is Terryw’s answer to my question here:-

So, am I right in saying we would not be lying to nominate one place as PPOR for State records, and another for Federal records?

His answer was a HUGE learning for me, and required reading for all I think.

The latter part of the topic heads off in another direction, but the major parts (for you) go through to the posts dated 15 Dec 2016 – after that date the topic has changed, so later replies are far less relevant to your post.

Benny

Hi Ajay,

Hi Benny – that’s what I’m betting on. But it’s surprising there was such limited growth in Gold Coast houses over the last 10 years. Articles such as these seem to contradict this. Am I missing something?

One of the articles mentioned the median growing more than twice as fast as Brisbane – that could be valid – IDK, as I only see the Brisbane Median figures. But watch out for some little tricky things:-

1. As one commenter pointed out in the 2nd link – the map at the top shows MOST of the Gold Coast either lost value or stayed the same (based on the colours on the map). A few went up in value, and one or two wildly so.
My question to that comment is this – How accurate is the map? It seems to have 10% rests between each colour. So, if a suburb went down by 4%, and the suburb next door went up by 4%, how would they signify that? Likely both would show the same colour (in which case one colour can represent an 8% difference in values without being notated – how weird!!).

2. A mention of Pimpama going up 61% over 5 years – what is not mentioned is that they will be comparing sales of 50-year-old farm workers cottages being sold, against brand new 4Bd2Ba homes being built. All of that development started about 3-4 years ago. There was a small loss in median value in the last 12 months.

3. Is there a “Commonwealth Games in Apr2018” factor in all this? Is that some kind of catalyst helping folk to decide to migrate from Southern States once more? Supply/demand lifts prices..

4. Some areas lifting by 30% – sure, it happens. Currumbin has never been a high-flyer – too far from Surfers, but is getting close to the airport. Perhaps it has been overlooked and just been re-discovered? And re-look at point 2. Is it repeated in other areas apart from Pimpama?

5. The overall mismatch of median data between sources. The figures supplied by Jason over the last few months has seen Sydney’s median exceed $1m, and Mel nearing $900k – while THIS sample shows Syd at $930k and Mel at $650k. Which figures can be trusted? These in the links were from Mar17 – perhaps that is part of the difference.

As I mentioned, I haven’t seen Gold Coast Medians in a while – it could be that GC IS stretching ahead of Brisbane right now – but don’t forget a Median is the “middle sale” in ALL of the sales in ALL suburbs of the Gold Coast. Many suburbs will have Medians less than the GC Median, while others will wildly outstrip the GC Median value. Hard to get accuracy with an across-the-board Median like that.

6. Good work, Ajay – it is good that you challenge what you hear that doesn’t seem to make sense to you. As mentioned above, my comments were coming from a point of “less information”. As such, they were open to challenge, and I have learned, thanks to you. Keep on looking and making up your mind about all of the facts and opinions in front of you.

The main thing is to NOT confuse those two (FACT and OPINION). ;)

Benny

Hi Dave,
I have a few concerns with that one.

“If you really want to avoid CGT and keep your negative gearing ….”

1. I don’t see where these two are related in any way – but, to be fair, perhaps they were answering a question from someone else who had referred to both CGT and -ve gearing. Not a big deal…..

“Buy your house and then live in it for 12 months. Buy another house and move into it and rent the first one. You have 6 years before the first house will attract capital gains tax. Sell it before then.”

2. Seems correct as far as the wording goes, except they have forgotten one major thing – the one you buy and move into CAN’T then be your PPOR if you are keeping the first one as “PPOR exempt” while you rent it. We cannot own TWO PPOR’s at the one time (except for a short period when changing from one to another). If you were to do it as mentioned in quotes, the SECOND house would NOT be CGT exempt (i.e. NOT your PPOR).

“You will however have all your eggs in one basket if you keep tying new properties to old ones with the bank….”

Eeekkk !! Sounds like they are cross-collateralising their houses. It IS a valid way to go, BUT it can cause major problems down the track – when trying to sell a property, or when wanting to switch lenders. We warn AGAINST cross-coll here.

Actually, on a re-read, just like in 1. perhaps they are responding to an earlier comment, and this part of their reply was a warning (not a suggestion) to the one asking a question. On that basis, I am less concerned about that last bit now.

But 2. remains as a major concern….

Benny

Hi Rema, and Lauren,
Rema, you replied to a 2.5 year-old post – no guarantees if Arron is still around. But maybe you and Lauren can touch base, BuyersAgent is a regular contributor on here, and Tom appears to be in business in Perth, so maybe it is worth asking your questions anyway, and see who pops in to answer.

Depending on what you wish to ask, you might wish to post a topic in another Forum (e.g. the Finance forum if you have finance questions, etc). Anyway, don’t be put off re my comment that Arron might not still be here, but use what is available to help with answering your questions.

On the Home page is the “Training Centre” and that has a host of Articles with all kinds of subjects addressed in it. Maybe a look in there can yield gems !!

Benny

Hi Blackhotel,

I purchased 3 x houses in 2008, 2009 & 2010 on the Gold Coast (Ashmore). Yes great rental return but absolute crapppppppppp growth.

The timing of your purchases was unfortunate – I would have thought this was just a year after the peak of the market in SEQ. Since 2008, Brisbane has pretty much stood still. I suspect the GC would have been similar. I would have thought Ashmore to be a burb that will do well over time – it is hardly “out in the boonies”.

Right now, the Brisbane property clock time shows 8 o’clock. Barring any major change in fundamentals, Bne (and perhaps the GC?) should do pretty nicely thank you over the next 3 years or so. I am seeing definite upward signs in Bne.

What are you seeing in the GC, or have you given up checking? ;) It could be just the time for a big hike in the values.

Benny

Nice work Steven – congratulations !! And yes, having a bit of extra income helps when early into paying a mortgage. A bit of extra Equity from day one is always good to have.

Well done,
Benny