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Viewing 20 posts - 401 through 420 (of 1,602 total)
  • Hi Ben,

    “(I wanted) to get the message across how monumentally difficult it is, and why anyone who does actually reach this level of property investment success can be so proud of their achievement.”

    Worked for me, Ben – that is a very interesting summation and I must admit to never having thought of that limitation which does, as you spelled out, show just how special it is to reach that level.

    Well written !!

    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 Mike,
    A Sinking Fund is (I believe) a separate fund set aside to cover some expected large maintenance cost into the future. It might be that the block of flats was built 50 years ago, and the Body Corp folk believe that it will cost (say) $500k to smarten up the building – rendering, etc. Thus, they might have previously voted to have each owner contribute their %age of that cost into a Sinking Fund. If your unit is one of 10 in the block, they will want $50k from you.

    I always thought of the Body Corp fees handling the “day-to-day stuff” – rates, insurances for common areas, maintenance, Services (lawn-mowing, gardening), etc – but it is possible that a Sinking Fund might also be part of the Body Corp fees (IDK for sure, as I have never owned a Unit). Whatever, a large Sinking Fund will need some large thought around it.

    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 Mike,
    I am personally in favour of houses over apartments. Many factors can sway things though, and high cost in major cities can have people opt for an apartment. For investors, apartments can often bring better returns “on the surface”, but beware of Body Corp fees and high-cost Sinking Funds that can throw the good returns under a bus !!

    Just one thing I really wanted to share though – and that is to watch out for ‘bad dudes’ that might be wanting to sell you a lemon. First up, I have never heard of Blue Wealth, one way or the other.

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

    If you take the warnings from in there, it should keep you alert and safe.

    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 Narinder,
    If you are wanting Capital growth, I would suggest the way to get that in Pimpama or Coomera is to look for second-hand property there. Anything new is going to be at top price, on a smaller block of land, and Capital Growth is likely to be NIL for at least 5 years, and even more.

    I am always wary of someone offering a “rental guarantee” especially for NINE years. If a place is good value, it should stand on its merits without having to be propped up !! And, rental guarantees would NOT be coming out of the developer’s pocket (you can bet on that) so guess where it comes from !!

    :)

    Pimpama is becoming wall-to-wall terracotta roofs instead of green fields. I think this kind of purchase can suit a FHOB as they often “make it their home” and add value while the community grows and infrastructure gets added over time. They become the P&C’s for the yet-to-be-built schools, etc. By the time 5 years is up, there might be early signs of some growth in values. FHOB’s hold on in bad times as it is “their home” and, eventually, Pimpama will become a complete suburb. Will it be a place where people desire to live? Dunno. Time will tell. But if the homes built there are shoddy and on tiny blocks, I don’t like its chances.

    Good thing is that there is so much land, it should be cheap, so a chance the house sites might be 600m2 or so. If not, I’d steer clear, as houses jammed together do not a happy community make !!

    Before jumping into a H&L in Pimpama, compare it with the values of similar second-hand properties in neighbouring ‘burbs – Coomera, Ormeau, Beenleigh, etc. If the H&L is dearer, then by how much, and is their value for those extra tens of thousands?

    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

    Good one, Matt !!

    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

    Hi Steven,

    The important lesson I was hoping to reinforce — via my own experience — is that it is better to buy something that is already established and second hand, and do some minor cosmetic makeover, rather than buying something that is brand new.

    You said it – and I can think of a number of ways this is true. Can you add to my list?

    1. A seller of a new H&L property is less likely to budge on the price they will take – so, no discount when buying
    2. A buyer can have rose-coloured glasses on when inspecting a brand new house, thus having their emotions lead them toward buying THAT one (even if their head is saying “Wait up a bit!”)
    3. A buyer expects to find things “not right” in a second-hand house, and their psyche is ready to accept that (and negotiate the price down) if deemed to be easily fixed.
    4. An established suburb already has a “history” that can be accessed – i.e. you already KNOW this suburb is deemed to be “good value” before you buy. Not so with H&L (if in a new estate, as most are).
    5. No (or few) “points of difference” between one H&L house and the next one – everything available is pretty much “same same”. Not so with second-hand houses in established suburbs.

    Steven, I’m sure you will have found more things too that have led you to your conclusion. Go ahead and list them – and others too – jump in with your thoughts, as they all help,

    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

    Hi Steven,
    The difference is that the place is newly-developed, in an area of (likely) low-cost new houses. It is likely to an “outer fringes” property and surrounded by similar new houses. Since it is a larger block, it could be that they got the land really cheap (what was its past history??? not an ex dump I hope) and the developers are hoping the larger land adds an appeal to a home-buyer who wants a backyard for the kids.

    Since it is a “solution property”, (i.e. brand-new) there is no meat on the bone for you. You can’t add any value by fixing anything. In fact, it is likely to be selling at an above-the-median price – making YOU the meat on THEIR bone if you buy it. ;)

    Benny

    PS These can be a way in for FHB’s – but any value gains are likely to be ten years away – over time, it becomes “just another suburb” with values reflecting its appeal at that time.

    Hi Dave,
    I can’t help with the Super thing at all – just a passing thought re the opportunity though:-

    As I read it, you have already gained $125k from the Sale, and were allowing a further $125k to be set aside to pay CGT. Given that it is likely that the CGT owing could be far less than allowed, would a cash amount nearer $180k (rather than $125k – and yes, I’m guessing…) be able to be parlayed into some other opportunity that will nett you a great return? Of course, you might simply want to pay down debt, rather than invest. And that is valid too.

    Maybe have a bit more of a think, and perhaps a long chat with an adviser, around ALL of your options before settling on the Super one. Then take the best option for you. ;)

    Benny

    A lot like the Internet itself, there will be some interest right upfront of course. Then, over time, as the concept becomes “less new” and there are more examples of “it really works”, you will see more take up the new ways. It took the Internet at least 10 years to gain acceptance by the masses.

    It will be many years yet before it becomes “the only game in town” though. There are too many dinosaurs, and most of us like the human interaction. I would think any obvious “Better ways” will be taken up quickly e.g. anything that piggy-backs off what we already do with the Internet and is easy to implement.

    Benny

    Hi Dave,
    I’m with Corey on this – I think you need assistance with calculating your tax bill. From the little I can see, it seems to me that you think your Capital Gain is the Tax to be paid. That is not the case, and you don’t appear to have allowed Buy and Sell costs either which would have impacted on your Gain.

    As such, I think you will have a nice surprise if you sit down with an adviser who handles this stuff on a regular basis.

    Benny

    Hi Russell,

    Does either neighbour have a block large enough that you might buy 200mm of land from it? There might be cost involved e.g. fencing, but if it allows a second build, and one neighbour can help for a decent price, it might be worth it(??)

    Benny

    Hi Debbie,
    In case you weren’t aware, propertyinvesting.com itself works with a finance group to get really good deals. I don’t know what they are right now, as the recent APRA changes may have changed things. Suffice to say that Steve mentions he can source a great rate based on the size of the membership of pi.com.

    Go here to check it out:-
    http://www.PropertyInvestingFinance.com

    A few months ago they were showing rates in the 3’s. Give them a call to see what can be done today,

    Regards,
    Benny

    Hi Asou,
    I just checked, and I found that you and I had chatted previously – soon after you joined us – here:-

    https://www.propertyinvesting.com/topic/5006256-doing-a-12-investment-property-on-my-first-home/#post-5006261

    In that post is the link I was going to provide you, thinking you were new here. You might have read it back then, but may I suggest you trawl through it once more, for several reasons. First, with a couple more years of thinking about (and even doing?) property investing, a re-read may make far more sense to you now than it did back then. Second, the topic I linked you to has grown since you first received it, so that there are later posts that go on to discuss a whole heap more subjects, some of which might be new to you.

    So do take a look – I hope some of it provides you with some more clues,

    Regards,
    Benny

    Hi Asou,
    Welcome to propertyinvesting.com – and good work for seeking to understand a bit more by ASKING. One major thing that we need to develop is the ability to separate opinion from fact. And, right off the bat, I can put the lie to these guys:-

    However, after seeking advise from my friends and colleagues. They suggested I should not invest in Brisbane since I am not familiar with the areas. And properties don’t really go up in value there.

    ….. and on both counts. By that, I mean that I can show you PROOF of Brisbane’s values going up in value. They have an opinion that Bne’s values don’t go up. Maybe they mean “don’t go up as much” and they could be quite right with that – but wait….

    By buying where houses are cheaper you can afford MORE of them. And rent returns are typically higher, thus, while you might stretch to buy one $600k house in Sydney (and lose money as the yield is lower, so rents don’t cover all costs), you might be able to buy THREE in Brisbane at $300k each.

    Re “you don’t know the area”, that can be learned quite quickly – internet, phoning agents, and maybe a quick trip or two to suss things out. There is a “big picture” topic around (I’ll send it to you) and in there, one bloke goes out and buys all around the country – cheap, needing renos, and positive geared. Then he gives them a quick reno and lifts the rents. Perhaps you can look at what he does and ask yourself IF you might be able to make that work. Maybe you can meet up with the bloke and buy him dinner to chat. I dunno – but, there are ways !!

    And to get a look at the growth in values over time, go searching for “australian median house price history” and check out a couple of the earliest searches (by that, I mean Google – not a Search of this site). One of them will show you how Sydney nearly always leads the charge, with Melbourne next. Brisbane comes well after the first two have surged. And a current point of interest from the median price table I found:-
    In 1992, values in Bne were about 90% of Mel’s values. Values then tanked for a while until 1997 when Syd and Mel took off – Bne lagged. By 2001, Bne values were just 55% of Mel’s values.

    Then, in 2002, Bne started catching up in a helluva rush – so much so, by 2004, Bne was back to 86% of Mel values. But here’s the point – today, Bne is back to about 55% of Mel’s values. And Mel remains growing in value. At some stage, Bne will get another kick along, and, like from 2001-2004, it will likely near double in values in a very quick timeframe. (Now Asou, that is another OPINION – mine – so take it as a point to ponder, then draw your own conclusions).

    The facts remain though – Bne has typically higher yields with lower prices, so you can afford to hold more properties. If Bne goes up in values by 10% in a year, and you hold $900k in property, you just made $90k. If a $600k Sydney property goes up 12%, you just made $72k in equity. Bne is $18k ahead in that scenario. As well as that, if you have one tenant vacate, you still have 66% of your income coming in. If a tenant left your single Sydney property, you have lost all income till you get another tenant.

    As you can see, there as MANY twists and turns, opinions and facts, cities and towns, cockroaches and cane toads (sorry, couldn’t resist!!) From weighing up all of those things, you will settle on a way that should work best FOR YOU. You may have skills that I don’t have, so you can choose to do things that I can’t – e.g. you might be a tiler and can renovate kitchens and bathrooms cheaply – that can give you an “edge” when considering which houses to buy. Kapich?

    Stick around, Asou – learn a bunch, meet up with other investors, chat with them, learn from them, save up, then strike when the time is right for you to do so. Again, welcome !

    Benny

Viewing 20 posts - 401 through 420 (of 1,602 total)