Forum Replies Created
Hi Aljc,
Hmm, since nobody has “got up to dance”, I thought I would add my views on your question. I’m not a professional, so my words are “just another opinion” to be thought about, taken up, or discarded – whatever suits you.My reaction to your question was to mutter “Seems to me these are Sales Agents alright – and they are doing a big Sell on you”. See, I am of the opinion that, with the tools available today, your property will be jumped all over without the need for a “Whoop-de-do Premiere anything”. The property itself is the Premiere piece, and developers and the like will be sniffing around for just such opportunities (or will have their “hound dogs” doing it for them).
As well as that, most worthwhile RE agents will have a list a kilometre long of “their own buyers” for your property. If they don’t, there will be other Agents beating a path to your door to take the listing OFF them first agent, and sign you up themselves.
So, WHAT are you paying for? Your ad stays at the top of each page? Given that the hounds are already going to be looking for it, they won’t NEED to see it on every page.
A big sign outside the gate – SURE !! Makes sense to me… but why should YOU pay for it? It is THEIR name that will be being advertised, and you WILL be paying their commission (you know, the one that once was “No more than 5% of the first $18k plus 2.5% of the remainder of the purchase price” – which steadily evolved into “No LESS and no more than 5% of the first $18k plus 2.5% of the remainder of the purchase price”. i.e. Not a MAXIMUM any more – just an accepted NORM – just try to offer them less !!
Let them pay for both if they think it will help so much.
What say others? ;)
Benny
Hi Lee,
Seems to me you are starting from a good place!! Having that equity means you ahve the capability of “moving on into property investing”. I would caution against doing too much, too quickly. You may be getting an inkling that “There is a lot more to know” and I would agree. Take some time to learn as much as you can from those who have done what you are thinking of doing.This forum is a good place to start – but add in books, seminars, and meetings with people also doing this. And you also might wish to check out this link :-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/As well as that, DO consider just how much knowledge you might glean by attending Steve’s 2-day seminar (just announced – check out the banner on the Home page). For a tiny amount, you will have access to one of Australia’s foremost Property Investors, as he shares his knowledge. Yes, you might get overwhelmed, but you sure will get excited and keep on chasing the knowledge after hearing Steve in action.
I’d say “Plan to take some time (maybe 6 months?) to become schooled on the basics at least, BEFORE getting your feet wet in Property Investing. You have the equity to make it happen, but your knowledge needs to be at a level where you can avoid most early mistakes (at least).
Very soon you will see there are many paths – you need to choose the right one for you and your family.
Welcome aboard – enjoy the journey, ;)
Benny
Hi OBTS,
I always get a bit concerned when I hear “purchased an IP property, under the advice of Financial Planning firm.” There are those firms that do the right thing, and then there are those that don’t !! What have they sold you, where is it, what is expected rent, etc.Please add a bit more detail – see, I can’t work out what you mean when you say “Property has been on the market twice now for tenants.” Does that mean you have had two sets of tenants and neither group has stayed long? Or does it mean something else entirely? Tell us a bit more about the actual problem otherwise we will be struggling to give you any meaningful ideas to turn it around.
Benny
Hi KC,
Do a Search and I am sure you will come across this subject. I know they have been discussed in the past. Here is one thread that mentions one (or all) of those names…..
Just noticed you wanted recent comments – the above thread is 2011 thru 2013 – sorry, this may not be current enough, but try the Search.
Benny-
This reply was modified 9 years, 8 months ago by
Benny. Reason: extra info re age of thread
“Once upon a time, bank interest rates were closely tied to, and tracked the RBA cash rate.”
So true, Jacqui. I watched (in horror) as the gap steadily widened after the GFC hit. What had hitherto been a 1.3% gap quickly became 2%+ Nice work if you can get it – become a Bank.
And, much like RE agent’s fees (where the 2.5% commission was once the MAXIMUM commission that could be sought, but now it is accepted widely as normal to charge the lot) the “new normal” should see Banks continuing with their golden hands more deeply in our pockets for some time. Short of some other “upstart” bank adding some heat by under-cutting the others, I’d think those margins will remain high for quite some time, and especially while the rates remain so low.
Benny
Hi darkness,
I wouldn’t be too stressed, and would just go get a depreciation schedule anyway. As I recall, a QS will cover a lot more ground than a builder will anyway, and usually come up with a far more complete list of depreciable items. e.g. the builder might provide the cost of a stove, but he won’t be including the cost of the electrician to install it, etc. A QS would add in all of these “hidden costs” to the stove’s value.Where a major build or renovation has occurred, I would always look to a QS for a new list (and have them remind me that all old items should be written off). A builder “might” be able to handle a really small job where just one or two items are changed…. but it is not his forte.
BennyHi Vyaw,
Hehe, why would I tell you that you are investing wrong? Your story reminds me of the Mexican fisherman:-http://www.wanttoknow.info/051230whatmattersinlife
Sure, you could try other stuff if you wanted to, but it seems to me you don’t need to, and you could just keep doing what you are good at until you choose not to. Well done.
BennyHi Kristy,
I used to buy API (Australian Property Investor) magazine monthly (about $10). Toward the back of each issue would be a data section – it would variously show Median value increases over 12 months, or rental value increases, etc. for ALL of Australia.Check out your newsagent and the mag to see if they still do that.
Benny
wouldn’t my property value decrease due to age (10%), and the land goes up buy 60%/4. So my value in land still goes up.
True – but what if your land is only 1/20th of the total land size (you are in a block of flats with 20 units). Your land increase in $ terms is miniscule because you only own a tiny portion. Yet your unit drop of 10% is on the whole unit (not 1/20th of it).
Anyway, you get the idea – the land is key.
Benny
Hi VYAW,
A savvy/experienced investor told me i need to buy land (with houses on it) not units.
The reason they would have said that is because land appreciates while buildings devalue. e.g. If a property gains 50% in equity over x years, that likely reflects something like a 10% loss in building value, and a 60% gain in land value.
Hence, without considering everything else (e.g. your risk tolerance, your earning capacity, your available equity, your sleep-at-night factor, etc) it would make sense for you to look for buys that include a good land component. e.g. if buying a flat, look to buying the whole block. Or switch to buying houses with the capacity to develop in time.
Take a look at what one young investor did in a 2 year period – take a look at what and where he bought – it is inspiring :-
https://www.propertyinvesting.com/topic/4410441-thankyou-steve-mcknight/Enjoy !!
Benny
With the Cash Rate currently at 2.0, I don’t see it going much lower – maybe just one more tick….
But then, I’d not want to see it crank up again too quickly. So, down 0.25 then back up a similar amount?
Voting for the status quo over 12 months. What say you?
Benny
Hi Mark,
Good on you – that last comment says it all really !!!it was very difficult to say no but I just thought to myself “you usually take more than a day to buy a car” but sign away the equity in your house in one day I could not do.
Benny
Hi Kristy,
Maybe start by chatting with a Mortgage Broker. See, it is no good considering buying in inner Sydney if your finances don’t allow it. Better to get a good idea of how much you can spend. This will likely provide some limits as to “where to buy” right upfront. As well as that, just by answering questions the Broker asks will help you to “learn what is needed”.Other than that, do a bunch of reading to help get you more comfortable in the “property investing world”. Maybe start with this thread :-
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/Benny
Hi Fiona,
Perhaps your nervousness comes from having skimmed over some posts like this one :-https://www.propertyinvesting.com/topic/4405609-just-joined-members-alliance/page/2/#post-4661898
Read it through carefully, then see if your nervousness has abated, or if it has increased. Be guided by your gut.
Regards,
BennyHi Asou,
how can I get away from paying the massive capital gain tax?
Two ways that spring to mind are these:-
1. Wait 12 months before onselling (be sure you check which dates are important – I believe Contract Date applies, and NOT Settlement date…. but check that). In so doing, you HALVE the CGT owing – well, really, you HALVE the amount needing to be reported as a gain. CGTax then is paid accordingly – it may bear no relation to “HALF”….. in fact, you could pay a lot less than half, especially if it has you in a lower marginal Tax scale.2. Start a Company – that way you would pay only 30%.
Or, as you say, Buy/Reno/Hold can work well too – but this doesn’t leave you quite so free in cash terms.
Do note this is all opinion – listen more to those who have a sig that shows they KNOW all this,
Regards,
BennyHi Desmo,
The interest payment would have effectively gone up by the reduction of funds in the off set. Is this allowed.
Your words sound to me like you are doing things absolutely correctly. An Offset account has your spare $$ sitting in it, and, being your money (Tax paid, etc) may be used for any purpose at all. The removal of those funds from the Offset account would have the mortgage payments increase back up to the original mortgage amount owed (and no more than that). i.e. you are not loading the soon-to-be-rented house’s mortgage with extra amounts, but simply reverting it to its original state.
If that is so, I would think you are ALL GOOD….. But hey, I am not an adviser (not accredited, etc) so do look for answers from others with a signature that shows their profession. My views should be treated as opinion, yet to be verified…. ;)
Benny
Hi Melissa,
A good question, and one oft-asked – “Do we invest before buying a PPOR (own home)?” Click on the link below, then check out the third post in that thread. It takes you by the hand and shows you the answer. Of course, it may not be the WHOLE answer, as it is written as though “financial reasons” are all that exist.
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/
If one looks from an “emotiional perspective”, or a “lifestyle perspective”, then there could well be other reasons why the answer given would NOT work for you. Still, it is a start – and has covered the important points very well. I hope it helps to give you a fresh perspective.
Benny
Hi Benny,
Great name you have there !! ;) You sound like a younger person just wanting to find out about property investing, so let me point you to a thread that will answer a lot of questions you don’t even know you have (including the one re “do I buy my own home first, or an investment?”).https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/
Have a look there and come back with any further questions. And a big welcome to you too – I hope you get to stick around and teach others even as you learn.
Regards,
BennyHi VYAW,
But it will obviously take longer to pay off the larger loan.
Hmm, if that is part of your plan, then you are likely right. But what if paying them off is NOT part of your plan? Have you given that option some thought?
e.g. Did your Mum and Dad pay off a $40,000 home over 30 years? What if they had also owned an investment property valued at $40,000 and DIDN’T pay that off? Today that property could conceivably be worth $400k+, with a $35k loan on it. Is that any kind of problem, especially since it is positive geared?
Could it be argued that NOT paying it off would free up extra $$ to buy another one? What do you think?
Benny
Hi Mark,
Like others, I see several points made that would have me “looking elsewhere” for my investment. ;)One, it doesn’t sound like a great discount, and I wonder why the current owners are looking to move it to you?
Two, with “family friends” occupying it, this brings its own set of warnings with it. It is possible that any decisions you might wish to make might be “coloured” by other family members.
Three, the news about the suburb is not the best, though is not in itself a reason to fold. But it is certainly a reason to “dig a bit more” to understand more of what is planned by Council, etc.
Four, good on you to be accumulating a Deposit at your age. That is a feather in your cap already. While accumulating, do take the time to learn MUCH more about investing before dipping your toe in the water. There is much to know, but by simply giving yourself time to learn, your future will be bright.
For starters, try this thread –
https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/Regards,
Benny-
This reply was modified 9 years, 8 months ago by
