Forum Replies Created
Hi Dan,
welcome to the forum. I had two initial reactions to your post:
– renovated but structural problems. Structural problems cost a lot of money but do not add much to the PERCEIVED value of a property.
– 5% yield is not great and definetly not cashflow positive.
Both points hint in the same direction for me. Sell now. Besides the property market has peaked and you will not get a lot of capital gain in the near future.
Look for greener pastures. You seem to be on the right track.
Good Luck
I glanced over member equity, but unless you are a member of certain super funds, you do only get their normal rates, which are competitive, but nothing special.
I would consider the following things:
– How much money can you make in another job. If you go back to a $1,000/week job, it is probably not worth it.
– Can you see yourself achieving your financial goal quicker if you leave your job.
– Is there a danger of the house prices falling because the work/land situation may change.
Without more details it is probably very hard to judge. My gut feeling is that you are doing very nicely at the moment. Keep locking for more cf+ properties.
Depending on your mortgage and living expenses, you should be able to afford more properties at a very regular basis. Especially as you have an extra $120,000 of equity in your house (you may have to wait 2 month until the bank is willing to revalue).
Have you looked at other option of living arangements for yourself in this town. I am thinking of shacks, caravan park, etc. You would have to make a massive lifestyle change, which is probably going to wear you down in a short time.
Could you subdivide your block and put another house on. Or perhaps build another house/unit on the same title.
Try to think of solutions to your living arangement that allows you to keep your income.
Good Luck. I think you are on the right track.
I totally agree with Sanjiv.
It is especially important to look at what stage the property market is. We just had a big boom, so I believe it will be a while until we get the next upswing. Why carry a draganchor if you could have a spinnacker.
As the market moves closer to another boom, you may consider selling your cf+ properties for something with more capital growth. But I believe that is a very dangerous strategy.
Good Luck
Yes, but Steve does not advocate to buy in the capital cities.
First of all did you read his 3rd book (0-260 prop in 7 years or an earlier one?). I believe his 3rd is the most relevant to the current market.
Stve started in Balarat, moved to Tasmania, New Zealand, USA. I believe he is now back looking in Balarat but with a slightly different strategy.
There are no cashflow positive properties on the shelf. You have to create them. This is by no means easy. Steve’s philosophie is Problem + Solution = Profit.
But I believe that it is still easier to create cf+ properties in regional centres. I am not ready to look in other states, but I am concentrating in SA.
And it is a lot of research, driving around, looking at properties, talking to agents, building a team of experts around you (accountant, land broker, lawyer, agents, surveyor, council planners, valuers, building inspector, etc.)
I also have a few friends, who are further down the track of investing. When I find a deal that looks good, I run it past one of them. They often have good comments, warnings, ideas, etc.
If this would be easy, everybody would be doing it. But I do know, that I do not want to belong to the vast majority that own only 1 or 2 IP.
Less than 2 or 5% of investors own 5 or more IPs. And I will be one of them.
And to do this I either have to wait for another boom or get CF+ properties.
I am currently working on several properties that I want to subdivide. But before I buy them, I make sure that I have as many facts as possible.
Keep at it.
Hi Bisho,
this is a discussion forum, not a sales campaign. Most people on this forum understand that land packages are seldom the way to get a good deal. Somebody else has already made the profit in the project.
I do not mind if Richard offers his service, when somebody asks specifically for a good MB. But he has already posted over 2000 posts in the last 3.5 years helping countless people in the process. Maybe it is a smart advertising strategy of his. But he has invested many, many hours answering questions. If by doing that he convinces others that he knows what he is talking about and attracts their business, GOOD ON HIM.
So before you start advertising your product, which is probably not what most of us are looking for, start by showing the rest of us that you have any idea what we want and how you can help us other than just selling your stupid product.
Another thought. If you rented the place and had a room in it for yourself (even if you mainly live somewhere else) there should be no rule stopping you from subletting (subject to the contract). And once you can convince your landlord of what a good tenant you are, they may not mind if you move out of the room but still keep the rent going.
Nathan, could you enlighten us how you got ripped off. While I know to stay away from these gangster, I am not quite sure how they rip you off.
Nathan, could you enlighten us how you got ripped off. While I know to stay away from these gangster, I am not quite sure how they rip you off.
Did you buy the property in the hope of CG? Or do you want to build on it for investment or PPoR?
I think the important thing is that you have a plan and not just a wait and hope attitute.If you do not think that the property will appreciate and you do not have an improvement plan, you would probably be best off to sell and cut your losses.
I know that Steve does not like land, as it is not producing income. Your property looks like the worst possible negative geared property.
And I do not even know if there are any tax deductions, as you cannot claim expenses against an income.
All the best
That depends on the wording in your contract. Go to the agents and ask for a copy of the contract to take home before you sign it. If unsure, consult with a professional (eg a lawyer).
And maybe the owner/REA does not care as long as the property stays in good condition.
That would be were your effort comes into it. Select good tenants, monitor the property regularly, fix up any damages as soon as you become aware of them.
If you do the right thing, it could be a win-win situation for all concerned.
I do not know what your rights are about receiving a bond when you are subletting. I would advise you to go out and check that out.
My understanding is that there is no clear length of time. You must have lived in the property for the whole time you owned it (if you had it renovated as soon as it was practical).
The tax office cites times of 3 month. It is all fairly complicated and you best look into it yourself on the ATO site:
http://www.ato.gov.au/individuals/pathway.asp?pc=001/002/026&mfp=001/002&mnu=1051#001_002_026
A company does not get any CGT concession. You have to pay tax on the whole gain.
Income in companies is not differentiated as rent, CG, etc.
At the end of the year if the company made a profit you have to pay 30% in tax. You normally also have to pay GST of 1/11 of your total sales.It is very important that you talk to your accountant about this.
I am pretty sure that this will only apply if I do heaps of these.
I will check it out with my accountant.
Many thanks for pointing this out.
A simple way around kylie’s problem. Get a sheet of plastic, cardboard, coreflute, plywood, etc. and cut it to the shape between the vent and the window.
Thanks, not what I wanted to hear so [angry2]
Thanks millions.
I do have a very knowledgeable surveyor and have already talked to the relevant REA and councils.
But I feel the more I know myself, the smoother things will travel.
I cannot advise you on the Hawthorn area.
Car Spaces are always a bonus. Eespecially if you plan to keep the unit later try to find undercover parking. Remember for most tenants their car is their biggest asset.
I coubt that 2BR will appreciate faster than 1BR.
Several things taht I would concentrate on:
– Look for an overall high quality property rather than the unit itself. (Worst House in best street principle).
– Once you own the unit push for improvements to the whole property at every opportunity. For every $ that you spent several $$’s get spent by the strata group helping to raise the value of your unit.
-Try to make your unit as unique as possible (install broadband, nice outside blinds, etc). Use your imagination without commiting too much money. Talk to people what sells places. The aim is to attract top dollars when you sell or rent.Good Luck
It would help if you would outline why neither you nor your mother can get a mortgage.
Normally you can get a mortgate even when on a pension or casual. A good mortgage broker can look at your situation and advise on the best possible approach.
Getting an investor may be possible. I think the idea of lending the deposit to your mum may be the way to go. Security now becomes the big issue. Is a 2nd mortgage possible? Or perhaps use a caveat?
I would strongly advise that you get some good legal advise before proceeding down this track.
Good Luck
One point has not been mentioned at all yet.
A $400,000 property has closing costs of about $20,000.
I believe that you will really struggle to even purchase the property without granma’s money.
I believe you have to make a livestyle choice.
Either buy a PPoR and start to save money so that you can invest down the track.
Or use your $45,000 now to buy IP and find a nice place to rent. Done right this will eventually set you up nicely.
With both options I think the biggest pitfall is discipline. I find that most people have rent/mortgages as the first thing they pay out of their pay, while putting aside savings comes last, after all expenses (including going out, holidays, etc) have been paid.
A friend of mine bought a neg geared property because he would not have the dicipline otherwise to save money every month. Having the bank breath down his neck is a great motivator.
I think this is a much overlooked psychological point.
Good Luck
