Forum Replies Created
Get a new accountant!!! Pronto!!!
You CAN claim depreciation AND the interest on the money borrowed for the reno FROM the date it's available for lease.
blocka wrote:lets say i inherited $250,000 i could bye one property worth $250,000 and enjoy the rental return of lets say about $280 per week and wait for capital growth of say 4% per year =$10,000 per year, or i could bye four properties of total p/p of aprox $1,000,000 and use my $250,000 as the deposit to borrow the rest. i would not have a rental return every week as rents would go toward the repayments of loans and they would found themselves and if i got 4% per year capital growth on $1,000,000 = $40,000 per yearYes it's called Leveraging your money.
Nathalie. Seeing that you are intending to go overseas for a few years it's important to get the structure right (well it always is).
If the area suits you, you could buy a property and live in it for 6 months before moving. That way you can claim it as your PPOR and not pay capital gains if you rent it out for less than 6 years (and then move back into it).
As mentioned a low maintenance property would suit your situation PLUS a good property manager AND an area with low vacancy rates.
Margaret Lomas advocates cash flow and some of her recommendations are regional. Be careful if you want to do that due to higher vacancy rates and (sometimes) poor CG. After reading both your books you'll soon see that "experts" have different strategies. Yes they have all made money and are the "experts" but it's up to you and your unique circumstances as to which you go with.Keep reading and asking questions. Careful!! It's addictive.
Upper Coomera has been plugged by many property groups for the last 4 years. That is BECAUSE they build there and push them to clients. I know Positive Real Estate was pushing them (probably still are) a few years back.
When looking at these places you have to consider that the people selling them have a vested interest in you buying there.How much are these places now? that rent for $400p/w?
Moreover, you should not buy property for tax deductions. Tax deductions are the icing on the cake. They are NOT the cake.
Do not sign up for their mentoring service (was $8000 last time I looked).
They have properties to sell which are "amazing" of course.
As mentioned- tread carefully. I was always taught to be careful of listening to people who have a vested interested in your purchase.By all means go, listen then take that info away and build on it. Talk to others there. You may meet a like minded soul.
Hi Nathalie. You can post any questions or ideas here for constructive feedback. It is great to find some like minded people to chat with about property. Do they ever have seminars in Townsville? Or somewhere you could travel to. That way you could meet some like minded people. Maybe advertise locally for people interested in property. Read books and magazines to get different ideas of how to invest in property.
What are you thinking of? Buy and hold? Will you be comfortable buying away from Townsville? Try to get these basics clear then it will be a lot easier to move forward. There are so many ways to make money in property it can get confusing.Also now (in NSW) you can only charge water usage if it has compliant taps. ie tested to less than 9lt per minute. Bathroom, kitchen (but not if a flick mixer). Correct me if that's incorrect).
It's actually written on the new management agreements.
It certainly looked great. It looked like a mammoth job. Looks like you did a lot of the work yourself.
Was it rented for the first year? As you started a year later.
Was there any profit in it?
lifestylez wrote:As a first home buyer, I would go for buying your own home and claim the FHOG.See how you go living in it for 6 months and if you decide you want to live somewhere else, then you can rent it out.
If you think that is likely, then try and buy somewhere you can live for a while but with a view to making it an IP. So you will need to focus more on it's capital growth potential and income potential (yield) so when you rent it out, it is still a reasonable investment.
If you go straight for the IP, you won't get the FHOG. That's $7,000 you miss out on.
Sounds like guesswork to me. Buy a place, see if you like it, if you don't move out. That's just plain craz and will not lead to a property portfolio. But granted you will save $7,000. THINK BIG. You can make more than $7,000 on your first purchase but you can lose a hell of a lot more than that by buying in the wrong place JUST to save $7,000.
Purchasing a PPOR is VERY different to purchasing an IP. Decide which you are buying BEFORE you buy it. Even if you do decide to live in it for 6 months. You still need to know where you are going with it.
Read my signature.
Hi,
it can get confusing. I know I was running around in circles for a while and panicking because I couldn't decide what to buy (being a bit older I didn't have time to waste).You need to look at your own circumstances to see whether you are better with a PPOR or IP first. If you want to live in an area that has a low yield you may find it better to buy an IP in a better yielding area and rent for a while. Don't buy a PPOR just to get the stamp duty concession. You could buy and live in it for 6 months (to get the concession) then make it an IP if you want.
Your idea of doing a minor cosmetic reno is good but it will not give you enough of a CG to withdraw extra equity. You need to do a bit more than paint in order to get enough gain to withdraw.
As mentioned before you are not going to find the perfect property and you'll waste years searching for it. The problem is you are expecting to jump in at the top. That's not the way it works,. Sure listen to people that are doing it but it doesn't beat doing it yourself. There are hundreds of different ways to make money in real estate. There's no right/wrong. Even the "experts" disagree.
Some say only by within 15km of CBD. Others say out west is the way to go.Look at your situation. What do you NEED? I'd say you need something with a decent yield (as it won't take all your wages each week and ruin your lifestyle). So start looking for areas that have a decent yield. Now if you can buy something under market value and do it up a bit that will increase your yield a bit more and add a bit of equity. You may not be able to pull your money straight out but it's a start and as it's a high yield it gives you the oportunity to keep saving for the next one. And as the rent goes up (and hopefully the price of the property) you'll be able to refinance then to withdraw equity and it will not cost you anything to hold. Ok I know that's what I do and others may say do something different. Problem is lots of newcomers are looking for some magic formula to buy property. They look for wraps, options etc and waste years trying to find the perfect way. When really it's not that hard.
Happy to chat if you like. You can PM me.
I'm pretty sure that's covered in the contents insurance as the items are home contents.
Tenants should have their own contents insurance. If they don't- their loss.
WomeninPropMelb wrote:And I am wondering, catalyst- can you get those details from RPData in Victoria?You can but my subscription only covers NSW, ACT, SA and QLD.
[email protected] wrote:How did you know it was department of housing???rpdata I have a subscription which gives you access to ownership, how much people paid, how often it's been sold, rented etc. Worth it's weight in gold.
Great advice shivasko. Many people get analysis paralysis and miss many years of investing. Some of my purchases were not amazing but I started and I learnt along the way.
The thing that really got me going was attending seminars and from there, talking to people and going to meetups and networking. Nothing is more motivating (to me) than meeting ordinary people that are doing better than me. I think, if they can do it so can I. I started meeting people that had dozens of houses. The trick is deciding which strategy suits you. In the beginning I was listening to everyone and getting confused because I thought I needed all the criteria that they had to buy. Then I realised each was different and I had to prioritise. I'm a bit older and wish I had known this stuff many years ago but I'm on the right track and will be set for retirement soon.
Only listen to people who have what you want. There are too many "others" trying to tell you what to do. And always be wary of listening to those that have a vested interest in your purchase.[email protected] wrote:great advice. did you do this while working full time? and do you aim for some capital growth in there? or jsut the positive cash flow…Because this house we're looking at, while small on a big block,. there's easy cosmetic reno to do – but the growth in that area probably wont happen for another 10 yrs.. thats great advice buy/hold buy/hold – are you just for cash flow? What is your criteria for housing? such as location, beds, bathrooms – or is it just cash flow….Both hubby and I work full time. Reno's have been from 1-5 weeks (total redo inside 4-5 weeks) while working (well a couple of sickies).
I don't "aim" for CG. I make it on the way in. But obviously I buy in areas where I think the CG will be. There's no guarantee though. That's why I have my deposit back if it stays stagnant and it's close to CF neutral so no effect on my lifestyle.
I buy bread and butter properties as the yield is higher.
My criteria is- under market value
– ability to add more equity (usually through reno)
– 7%+ yield
– low vacancy rateWhy would you buy in an area you think will not have growth for 10 years?
[email protected] wrote:haha ONLY 3 properties….wow thats amazing effort!!!That was before I got serious. Now I'm addicted!!! My hubby says I've gone crazy.I ran out of petrol a few months ago and rang him and said "you're going to kill me". He said "don't tell me you bought another house". haha. I felt better telling him I "just" ran out of petrol.
[email protected] wrote:here is the idea for my first property… its in toormina (near coffs and near a great highly valued suburb on the beach) its advertised at $235K – nice block but house looks a bit dodgy heres the link http://www.realestate.com.au/property-house-nsw-toormina-107673851 As it needs some cosmetic reno, and maybe even a carport/garage, i offered 180 to start. rejected but in negotiations. a lady recently offered 200K which was also rejected. I want to offer a win win…but not sure how to/ rents in this area are about 290..lowest is 280 for a unit.. thougts on what i could do with it? my brother is an engineer and used to do reno's but is busy lately… i thought paint on outside, new kitchen (bunnings flat pack style) and maybe some garden action…. Not sure how to get it valued up to say…280 RP market data is from 202K up to $240 KI don't know the area but I think the house looks tidy. Too tidy to make a huge difference in equity I think. I buy houses that look HEAPS worse than that inside. That's why you get them under market value. People think it's too much work but mostly it's just elbow grease. If you are not scared of a bit of hard work and some late nights and weekends it's doable. DO NOT buy Bunnings flat pack kitchens. You can do a lot better for the same price.
I'd say keep looking. The figures aren't stunning even if there was predicted CG.
P.S Just looked it up. 7 and 9 are the only private houses in the street. All the rest are Dept of Housing. I wouldn't buy it.
LUCK = Labouring Under Correct Knowledge.
I'm selective about who I talk to about my investments. Definitely not people at work (escept one friend). Wwe were talking (quietly) and one collegue pipped in and said "you're buying ANOTHER house. What if you lose your job". I quickly told her the tenants would pay my mortgage and asked who'd pay her mortgage if she lost HER job.
The first step is the hardest. Just don't fall in to the too much theory not enough action trap.
If you buy a reno house you don't need to sell it.Last year I bought a house in western Sydney. $218K did a $14K reno (5 weeks) and it's valued at $285. So if need be I can pull my deposit back out to buy the next one. That's how you can build a portfolio. Buying and selling may give you some quick cash but it won't build a portfolio. Plus take into account the buy/sell costs and CGT. Worked well for me, I liked the reno bit so I just keep doing that. Works for me.
I prefer buy/hold, buy/hold, buy/hold.
You really need to decide where you will start, then you're off and running. Don't be too quick to jump into a mentoring program. Some people mistakenly think they will find good deals for you and tell you what to buy. Everyone is different. Notice I didn't say you need to have your strategy all worked out. That's because you will change as you grow. My first property was good (only because it was at the start of the boom). Next one OK. Then I started getting serious and attending seminars, meetups, devoured forums, networked and picked peoples brains. I felt a bit pathetic with my paultry 3 properties and got the boost I needed to get me moving.
You may not need a mentoring program, just some networking.
[email protected] wrote:Thats awesome about goal setting -we're very committed to that and try to write down our goals every day – but its so hard sometimes! because theres so many options i get swayed on goals – but having help would be idealSo what are your goals? Other than the one below?
[email protected] wrote:I am 22 and we want to retire through property by 25….A positive cashflow of $100K at least. DO you think this is too ambitious?So how are you going to make $100K a year in only 3 years? It's fine to have goals but you have top have an idea of how you will go about it. Not just pick an age and a figure and say "that's what I want". Sorry if that sounds harsh. If you do have a plan on how to achieve that I take my hat off to you and concede that you do NOT need a mentor.
[email protected] wrote:We both work full time but my partner has agreed that once we get property rolling and do our first deal…i'll immediately cut back work…to focus more on investing while he continues to work and pay rent
rachHow are you going to fund these investments if you are not working full time? or are you on amazing money?
BTW I'd speak to Nathan. He made his first million at 21. He's 26 now.He really knows his stuff.
NOS1 wrote:Hi Allan, I always use a quantity surveyor that actually inspects the property as opposed to email, as you will miss a lot of items that can be deducted.. CheersI said Email them to get an idea of price NOT do the report by Email.
http://www.depreciator.com.au They have people all over Australia.
Email them with details of your property and they will give you a cost estimate. I have had many done with them. Professional. Reasonably priced. Scott (the owner) posts on a few forums and has helped many people with his expert advice (for free)
I've always received my money back the first year. So always worth getting.
I think you are a bit confused.
The Body Corp is not a company that "take on" the building. There is a strata manager- they get paid a fee to collect the money, pay the cleaners etc (out of YOUR money).
The Body Corp are the owners (you). YOU have to fix/pay for the problems ie your fees pay for everything.
If there are serious issues I'd run away. The costs could be huge. It's not cash flow positive if you are putting thousands in to rectify problems.
Are you in Sydney? If so I think I know the deal. I'll assume it's the one I'm thinking of.
The new owners will have a meeting and decide on the Body Corp fees and will appoint a manager.
As there is no body corp there is no money. There's not a body corp money box. The money that's there is money that owners have paid. As there is no Body Corp no money has been paid. Owners will need to put an upfront amount to cover basics like admin etc. Any repairs will either have to be saved for or a special levy set to cover emergency things.The Body Corp will need to get a 10 year sinking fund analysis. This lets you know projected expenditure so allows you to set the sinking fund fees.
proptyman wrote:yes being in a negatively geared position and only paying the interest can work out ok but I do believe that there is a good feeling about getting a property into a positively geared position as then you are making money and are in a great position to perhaps invest once again! – there is a good feeling about owning more of a property than just "25%" for instance!Feelings won't make you money. Paying off a loan only puts you in a great position to buy again IF the bank will let you withdraw the money you paid THEM. If it's in an offset account you are paying the same interest as you would if you paid the loan down BUT the money is yours to do with what you want. ie buy another property, have a holiday- whatever. You do not need the banks permission.
proptyman wrote:there are advantages in not paying or paying off more of the principal. The decision can sometimes come down to your cash flow position too! If you lose your job or your cash flow is very minimal then not being too far negatively geared can be comforting!Again. If the money is in an offset it's YOURS to withdraw if you like. Try asking the bank to give you some of the money you've paid off your loan when you have no job. hahaha. WILL NOT happen.
