Hey….in the US…you can buy them for $0 US.  Seriously they won't go that low in Australia as we don't have an oversupply of houses…yet.  Once the financial crisis tsunami hits Australia you will see prices start to fall much more than they are doing at present as employment and migration drops (depends on China recovering).  This is pa…[Read more]

Whilst there is  an inverse relationship between intereste rates and inflation there is a difference when you're in or nearing a recession.  Demand for goods (includes houses) falls so hardly the price of anthing will increase.  People become wary in uncertain times so they'll put whatever excesses they have into important things like reducing de…[Read more]

Hi Beth et alBear in mind that house prices in Australia are  at an extreme in terms of income to cost ratios.  It is (or at least was) up there with the US, Spain and Britain.  Not so many years ago you could buy a house in Australia for 2.5 times the level of income and these days you pay more like 7.5 times income.   In the earlier days you cou…[Read more]

Hi BethThanks for responding and providing info that helps.  Had not thought of forming a company but it seems like a great idea.  I wouldn't start doing anything for another 3 years until the market improves so I have a fair amount of time to plan……I think in the ACT you have 2 years to start once it has been approved.  I have been lucky to…[Read more]

Hi Matt007 and Bob AndersonThank you very much for the information provided…..all very useful to get me started.  The block I'm planning to develop is  unencumbered and worth about 1.5m so it seems like I have a good start.  As I say I'm not going to start building tomorrow but I can prepare for it to take off in 3 or so years and the market by…[Read more]

Indeed why struggle …..we only have one life and each day should be precious so make it as stress free as possible.  This doesn't mean giving up on life's challenges and risks but I'd rather be happy in one home I own with family/friends than being burdened with seemingly unrelenting debt….especially given a definite mood prevailing of poor…[Read more]

How things can change.  3 years ago I had a serious illness so much so I had to discontinue my career.  I was also a property invester with 5 properties but the debt on 2 was so high relative to my cash flow I was forced to sell 2 of them 2 years ago.  They went for relatively bargain prices but I still made significant capital gains to reduce th…[Read more]

Hi PamelaI agree with the others that you just ask your questions.  So you know what questions to ask  you could send me an email if you want an assessment of your financial situation ……..others on the forum might be able to then answer the questions you ask.  I won't be asking you private stuff just numbers to go into a spreadsheet to get a…[Read more]

Thanks Guys. The truth is I have done nothing yet and given the way the stock market has behaved probably it was a good thing. I have been to a financial adviser and it came down to my selling a property rather than my desire to borrow to invest. The interest rate has been going up so perhaps he was right……..I suppose I have always been a…[Read more]

HiI assume you want this house despite the variation in value to the sale price.  15k is a very small variation however as I don't know your financial situation your problem might be that you want to borrow 100% and don't have the variation amount to cover the sale price ie the 15k.  Depending on your overall equity some lenders will loan above 1…[Read more]

Hi KPYou're doing well and good on you.  Just because minerals are in the ground it doesn't mean they continually will be mined.  Mining booms come and go (at least they used to unless things have changed!) as does the unwise who don't spread their investments wider than mining shares…..and excessive property investment in risky mining areas. I…[Read more]

HiI think your debt ratio is extremely high at close to 75% and you might be wise to wait for awhile until you have more equity.Carpe

Hi WoodyvaleThe important thing in life is to follow your dreams and take some risks to achieve them.  We can always block ourselves by finding things to put us off.  So go for it if this is what you both sincerely want to do and are both committed to sharing the blame if things don't quite work out.  Your debt is around 40% and grows to 50% if yo…[Read more]

Thanks Peter…..something definitely to consider.  Joint venture was not something I had even thought about.  The developer just wants my property but is a meanie even though the $1m offer sounds good……he owns the two next door and really needs my corner block facing North/East and opposite the best apartment complex in Canberra.Thanks L…[Read more]

HiI think you've answered your own question respective to your particular financial case.  You have laid out the two extremes of property investing……so your target must be for something in between and certainly not one that jeopardises a reasonable standard of living for yourself and family etc.   As a successful property investor I prefer to…[Read more]

HiYou have to pay it if you sell.  Your capital gain is halved and it is added to your taxable income.  Hence if your gain is say $100k then 50k is the additional taxable income.  So if your current income is 50k then your taxable income becomes 100k.   So the aim would be to lower your taxable income as much as possible in the year you sel…[Read more]

If it is seriously going into the legal network for sorting out then you have to make the decision on whether you can accept the pain for possible gain though with probable delay or bailing out and don't look back as you move forward.Carpe

Hi PatIt depends on your financial situation.  Generally I am against selling an investment property.  Negative gearing is ok if it is reducing the tax you're paying in a significant way.  Even if it was paying off the loan ie posively geared (as a lot of people seemingly go for albeit very dubious to achieve these days) it is only  a good inv…[Read more]

Hi JonThanks for your generosity in sharing the spreadsheet with me and thanks also to the contributions from others.  I love this site as people give without expecting anything in return.  It's like we're in a good family!All the best to everyone.Carpe

Thanks Jon…I did send you a pm but have not heard back from you.Thanks Richard…very handy figures to work off.   When I have been through all the research etc with Planning body, architect and builder I will be in contact with you to discuss further.  Besides this development property that I own (1.0m) that is in a prime redevelopment City ar…[Read more]