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Make sure you have a contract in place.
Otherwise you may become the next 60 minute story where a tenant decides to stop paying rent and won't move out. With no contract you have no rights. Also be aware that if anything happens to the tenant in an unaproved granny flat you will lose your house. Insurance won't cover you.
I use Elliott Shiner for my Mt Druitt properties. Very happy with their level of service and professionalism.
List the ones you are looking at if you like. Depends where in Western Sydney (it's a big place). I prefer local.
Thanks. I guess it's a quick way to see if the figures work but interest rates change so your rate now means nothing unless you have a very long fixed loan.
I like my numbers a bit more accurate than that. Before I buy I want to know all outgoings, reno costs, rent etc so I know the cash flow and projected cashflow if it's not already CF+
What's the 1% rule?
Assuming you lived in the PPOR from the time you bought it you can then move out for up to 6 years and not have to pay CGT (commonly known as the 6 year rule).
While you are renting it out you can claim depreciation, interest, rates etc.
This is on the proviso that you do not purchase another PPOR.
So if you move back in or sell within 6 years you pay no CGT.The NSW system is REALLY stupid.
I assumed it was individual (well it is) BUT they also count the together. Found this out the hard way.
So you would each get individual accounts with wife %175K so no payment and husband $325K so no payment. But then you also get a partnership one of $500K so you will have to pay for the amount over the threshold.
If you have a payment on both your individual and the partnership they take the smallest amount off the largest amount so you don't pay twice. It stinks.
So if you bought places with different people you could own more property and not pay the tax. It is totally ridiculous. It SHOULD be just individual. That's fair to everyone.I didn't challenge it as it was part of a restructuring of our portfolio, not to withdraw equity as we didn't need it.
Lately we have been buying undermarket properties and renovating them. We do most of the work ouselves as we love it. Both (hubby and I) work fulltime but not for much longer.
I don't know the rules in your state but in NSW auction conditions still apply after the auction (7 days?) so i doubt they will take your offer with conditions.
They usually list for sale with a price attached after the property is passed in. It will be higher than the reserve.
You will have more competition now that it's on the open market. Why didn't you bid if the price was what you wanted.Good luck.
Hi, I would seriously look up Nathan Birch. He started looking at real estate books when he was 13 or 14. He made his first million before he was 21. He had no help from anyone. Left school, worked 2 jobs and started.
I'd send him an Email. He's a wonderful guy who goes out of his way to help people get started.
If he's got a seminar lined up in Melbourne definitely go. If you are really serious maybe see if your parents will bring youy to Sydney to meet up with him.
He's one mentor you'd be hard pressed to beat.In my experience they just do a desk top eval.
The value is that- the value of a typical house like yours. The low one would be if your house needs work. The high one if it has extra features.
If you need a better value I think they need to go in and actually look at it.
We bought a place for $218K We totally renovated it with new kitchen, bath etc. According to the agent it would easily sell for $295K. The bank gave us a val of $250K. You couldn't even get a standard 3 bed for that. They didn't acknowledge that there had been a huge extension (brick) on the back of the house making it a 4 bedroom and 2 living room house. They just did the val on what was listed on the net -3 bedroom.When you first purchase they usually value it at what you paid for it. I purchased one house at $15K more than land value and they still valued it at what I bought it for. We renovated it but I haven't had it revalled yet.
tonnygarden wrote:I would like to say two things to you; if you don't know anything about the real estate market then you should hire a real estate agent; secondly, real estate is a very good sector for the investment purpose. If you invest at the right place then you will definitely get some profit in the future.________________________________
bal harbour condosWhere are you from? In Australia you don't hire real estate agents to buy property. Most real estate agents don't know about property investing. They know how to sell houses.
Only have $5K cash would worry me. If one property is empty for a month or you need to replace a hot water system or the like, you're in trouble.
Do you have an offset account. I don't like useless cash sitting around while you're paying interest but an offset account can help with that. That way the money is saving you interest but is sitting there for emergencies.
Don't want to scare you but I have a friend who lost everything because she was heavily geared and when the market dipped the bank wanted some money. She didn't have it so had to sell in a hurry.
mellissac wrote:Based on getting $385 a week The unit is costing us about $90 a week on an interest only loan. Im guessing with principal we would be at about $150 a week. Is this alot for a negative geared property thats probably gone up about $100,000 in 3 years?
So it's cost you $90pw for 3 years. That's $14,000 and you've increased in value by $100,000. I'd say that's pretty good.
Based on that though, how much do you think it will increase in price in the next 3+ years.
Also by the time you sell and pay the loan and CGT it's not a huge amount.
Yep- light sand, oil based undercoat/sealer then paint.
Providing they are attached well (ie not coming off the wall).I'd remove them and regyprock for a better finish. Depends how much you want to spend and if it for a rental or PPOR.
As mentioned a positively geared property is one where the rent covers ALL the outgoings. Some people like to convince themselves that a property is positively geared by only counting the interest on say 80% of the loan (what they borrowed) and not including the deposit (which still comes at a cost) and purchase costs. I count ALL costs.
But a property can be negatively geared but positive cash flow due to depreciation and tax breaks.
Hi found this so you can claim the exemption. NOTE-this is for NSW.
Also if you are in NSW there is a tax free threshold so you likely wouldn't have to pay anything.Absence from your former residence
What is this concession?
If you move out of your principal place of residence (your home), and move into another residence that you do not own (for example, if you are posted overseas or interstate), you may be able to claim an exemption from land tax. This exemption will be allowed for a maximum period of 6 years.
Eligibility
The exemption will apply if:
You have used and occupied the property as your principal place of residence for a continuous period of at least six months prior to the exemption period
You do not own and occupy another principal place of residence worldwide
The total period in which you receive income from leasing or licensing the property does not exceed six months in a calendar year. (If you lease the property for more than six months in a calendar year, you will have to pay land tax for the next tax year)
Income is derived from people who occupy the property during your absence, provided it is no more than is reasonably required to cover rates, water and electricity charges and similar outgoings (but not mortgage repayments)
If you fail to resume occupation of the house as your principal place of residence following the six-year absence the land will become liable for the next tax year.
streamlineinvesting wrote:The issue with purchasing regional property is typically there is no capital gains, but I do not see how it matters if the property is paying for itself. If you find a true positively geared property, then with some management on your part, it will simply pay for itself, and need no financial input from yourself after the initial purchase and renovations.The thing is if you only have regional properties that have no CG you can't get far. Paying down the property with CF will take MANY years. Having another property that is negative (as long as it's not hugely negative) will win out if it has CG and should be CF neutral after the first few years.
I adopt a similar strategy to Jamie.
I agree with the above posters that you need to have balance. In order to have a decent portfolio you need CF + CG.Hi, do you need a unit that expensive? If you want newish I guess you'll pay for that. Will you be able to buy a newish unit for $380-450K? Just trying to compare apples with apples.
Compare what you'd be renting with what you'd be buying first. I thing the rent would be lower and the costs (by the time you add strata, council rates, water rates, repairs) etc will be higher. More like $3000pm. Don't forget buy costs (stamp duty $8K? solicitor $2K)
So say an extra $1000pm?I'm not saying it's not worth looking at. It is but know what you are comparing. If you do buy consider that you may not stay there forever so be careful how you set up the loans to take into account that it may be an investment property in the future.
Sydney is set for some growth (IMO) so could see you sitting on some nice equity if/when you do sell.
Interesting and some great points. I definitely need to exercise my willpower muscle haha. Especially when it comes to dieting.
Thanks.Do you own property? If the answer is no then No you can't claim.
If the answer is yes you may be able to claim it as education relating to your property portfolio.
