Before you do any thing you need to know what the zoning is. That is what determins how many units you can put on any particular block of land and their minimum size. Sometimes this is given as number of bedrooms. Eg 4 x 2 bedroom dwellings per 700 sq/m.  Your first phone call should be to the local council to get an idea of what you are allowed to do.

The cost varies widely depending on finish and construction method. For example, does the land have any covenants on it requiring a certain method of construction, such as only brick and tile. Covenants can also state minimum dwelling  size.

I dont know the areas you are talking about very well (been to Werribee once).

Before you comit to a purchase on a property based on what you think you can build, consult a independant Town Planner. They know the rules inside out.

Hope this helps.

Another thing which you may not know about in regards to any superanuation you may have in the UK. 

My husband is English and didn't find out until 2 years later that he had 6 months? (not sure of the time frame) to transfer his UK super to Australia without it being taxed, after becoming a permanent resident.

If he transfers it now he has to pay tax on the amount transfered (stinks I know), not sure of the taxable rate.

He has decided to keep his over there.

I grew up in the Newcastle/Lake Macquarie area. Belmont is a nice area, sandwiched between Lake Macquarie and the ocean. Have a look at the Lake Macquarie councils web site. When I was at uni a couple of years back we based an assignment at a site in Belmont (architecture degree) and from memory, the council had Belmont ear marked as a future "City Centre" where they were going to allow high rise developments and higher density development in certain areas of Belmont. I don't know if that is still the case but its worth checking it out.

Hi chrisb57,

The short answer in my opinion is pay off your owner occupied home, then go looking for an investment property with the deposit from what is left over (if any) or by using the equity in your home for the minimum deposit on the investment.

The loan on your owner occupied home is paid from after tax dollars and the out of pocket expenses on an investment property is paid for from before tax dollars. Can make a big difference especially if you are in the highest tax bracket. Any positive return from your investment will be taxed. So think of it like this: you'll be paying x amount off your home loan after already having paid tax on that amount, and then paying the tax on the positive return from the investment. Double whammy. Depending on what the figures are it could be a big difference.

Not sure if I've explained it well enough but if you need a more detailed explanation I'd suggest you get a few books on property investment, or maybe see a reputable advisor who specialises in property, but make sure you thoroughly check them out first if this is the way you go. There are alot of "property investment advisor" companies whos real business is selling you their or an associate companys over priced property.

Maybe you could get a few recommendations on this forum if thats what you want to do?

Try your local council or the council for the area you are refering to. The council website should have details there (although I find most council sites confusing and hard to find info) or the best thing is to phisically go to council and have a chat with the duty town planner. Be aware though if you do go to have a chat that you may have to make an appointment or find out when they have their counter open as some councils only do enquiries for these departments in the mornings or on certain days.

You'd be amazed what a friendly local Town Planner can tell you, especially if you get on the right side of them.

Hope this helps

Here here EricH,
Ask anyone over 40 what they had to do to get into their first property.

My grandparents lived with my grandmas sister and family  till my mother was 7 (4 adults, 3 kids in the house, 2 bed with a closed in verandah acting as another bedroom). My grandfather spent a few years of that time building their very modest 2 bed house on weekends. About 12 years later they added a 3^rd bedroom.

My own parents first home was a one bedroom fixer upper, bathroom unfinished, outside toilet, on the outskirts of town. For the first 2 years they had to use an esky because they couldn’t afford a fridge.

To get my first home I lived on base (was in the airforce for 13 years). For about $70 p/f, you got a room about the size of a bedroom (no lounge room or any other personal space), shared bathroom facilities with about 20 other people, all meals at the mess and having to do a big clean up every Monday night. I lived like that for 8 years and was able to save up for a deposit on a 2 bed cottage with a kitchen made out of packing crates, a bathroom on its last legs, an outside toilet (thankfully not a septic) and carpet that stank to high heaven. It cost me $79 K in 1999 which was about 2.5 times my wage then. I lived with no carpet for 4 years (couldn’t stand the smell so I ripped it up), an outside toilet for 3 years and the sorry excuse for a kitchen for 6 years. I spent about 40k in 2005/6 painting, new plasterboard, rewiring, new bathroom, new kitchen, deck, knocking down some walls, polishing floor boards and reluctantly sold in Feb 2006 for $235K. This was then about 4.5 times my wage, but it was a much better house.

My point is I did the hard yards to get into my own home and I did it when I was single. When I sold I only owed $5K.

I do think that now people starting out do want everything now and are less willing to do the hard yards like generations before them. There are so many more “essentials”  that we “need” now. Ie mobile phones, computers, ipods, take away meals etc etc. Our grandparents didn’t have these things to have to factor in to their budgets though.

Still from the original post, What your money buys you here is a much bigger house than you would get in the UK for a similar location and the wages are higher (my husband is English and can compare his wage here to what he was earning there) but the cost of living is generally much higher there. My in laws and husband friends who have visited think we live in a massive house and by my standards it is only average.

Getting into your first home has never been easy. You have to make some sacrifices and I do think a lot of people forget that.

I would check your contact carefully if I were you.

I have just bought 2 properties and both contracts had a "death" clause in them that if either paty dies or becomes incapacitated, the contact is voided.   Never come accross it before so it may be the latest thing to put in a contract but just check first. I was going to do just that but as one of the places I am purchasing belongs to a 92 year old man who is not in the best of health, I opted to wait instead of risking $20K on a reno and have the benefactors of his estate reap the benefits of my hard work if the worst happens.

Maybe this is the reason why the vendors won't give you access to the property?

Regards

My first post so be kind all your doomsayers!

I myself am about to buy a couple of rentals. I don’t think there will be a bust at all. I’ve been reading a lot in the last 2 weeks in property investor magazines and watching industry experts on TV, notably “Your money, Your call” on Foxtel and doing a fair bit of research, mainly in my local area (Newcastle /Port Stephens). The general consensus is that interest rates will start to come down Nov/Dec 2008 or early 2009. The NSW, particularly the Sydney market has been stagnate or seen a price reduction and this has started to reduce the prices back to a more reasonable level (I know I’ll get shot down in flames for that one). I even spoke to a specialist property accountant (from a very reputable well known firm) last week who said in their research the NSW market is at the bottom of the cycle.

I don’t subscribe to the thought that property values will decrease by maybe 40%. I know the local RE agent quite well and to get a rental in our small area, they have a waiting list with about 15 families. As there are two RE agents in our small suburb, I can assume the other agent has a similar list or maybe just the same people on their list. We live in a small village? 30 minutes north of Newcastle which achieved a 10 year average growth of 11% per year. Last financial year some Newcastle suburbs had a -10% growth, ours was I think from memory -2.3%. Newcastle has recently had a <1% rental vacancy, there has even been “auctions” for rental properties with people bidding for how much they are willing to pay for rent and not in your most salubrious areas either.

So using an example, if my own home was a rental and was devalued by 40%, (currently worth $360 K) it would then be worth $216K. I know a lot of people who would go out and buy their own home tomorrow if that were the case, therefore pushing prices back up again.

Maybe things are going back to what they were before the BBs generation where more people rented and didn’t even consider buying. My husbands grandparents rented the same 2 up 2 down terrace in Liverpool UK for 50 years and never considered buying it, mores the pity.

My own parents first house they bought was a one bedroom fixer upper which they bought whilst having a small baby. My mother takes great delight in telling me how they didn’t even have a fridge for 3 years, they just used an esky cooler. They only had one old car and never ate out so they could get a foot on the property ladder. There were a lot of their generation who lived with their parents for a few years after they got married to save for a deposit (I don’t think I could do that).

I agree that things are maybe a bit difficult for gen Y to get into property  but maybe some who complain have got their priorities wrong, new cars, holidays, excessive consumer spending. I have nieces who are in their late teens/early twenties who want it all now. They’d rather blow all their money and rent a “nice” house in the happening suburb in town than do the hard yards now to secure their financial future. There’s a lot to be said for delayed gratification.

Anyway, I only take advice from people who are current property investors, who have done their research and are respected in the industry, in fact I’m going to a seminar soon by Michael Yardney about where he thinks the markets are heading. Personally I think any one with the capacity to buy an investment property(s) now and not considering it will be kicking themselves in a few years time. Do your research, educate yourself, make an informed decision and don’t listen to anyone who isn’t a property investor.