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When you say it's CF+ you mean AFTER tax benefits right? What Jamie mentioned would be applicable if it were CF+ in it's own right (not after tax benefits).
As mentioned it's who owns the property not who has the loan, that determines tax allocation.
SO if it's in your wife's name you will not get those benefits.
Put it in your name so you get the full tax right offs. The negative is if you sell it before you retire as the CGT will go on your income. But if you plan to keep it until you retire that won't matter. Although 10 years is a long way off, things may change. To hedge your bets you could have it in a bigger % for you and smaller for your wife.
wwc_1980 wrote:Hi Jamie, great advice there. As an example, my offer was 5% under asking price, and this was based on the past 3 months of sales in the same and surrounding suburbs for properties similar to what I was going to purchase (2 bed/1 bath/1 car space) as well as looking at 3 bed houses for comparison as well (No 3 bed units built in the era within that suburb.). It wasn't realistic for me to go lower than 5% under asking based on this evidence. They dropped their asking price, no one else showed and interest, so they ended up calling me to see if I was still interested in the property and accepting my unchanged offer, providing early access to plan renovations and commence demolition once the existing tenant vacated.
Yes this is how you do it. You can't pick a % and discount by that amount. It's about research and knowing what it's worth.
I saw a house that was really cheap. Rang up and raced out there only to have someone beat me there by an hour. They looked and signed. The agent was an out of area agent and had no idea of the value. So the asking price is irrelevant really. I'm sure you've all seen places way over priced also. Lots I see I wouldn't buy with a 10% discount because the vendor has set an unrealistic price.So research, know what it's worth to you. Offer that. Tell the agent "I am submitting an offer of $?? based on my research that the house has small yard, 3 beds, needs new kitchen etc". Then you don't sound like you have plucked a figure from the air. The vendor may begin to see that the property is not perfect and be realistic. If you have other properties that you are considering. Tell them that. Name them. Say why they are better or if not better, that they are cheaper etc.
With investing it's about numbers. Leave the emotional purchases to the PPOR buyers.
You need to explain what you mean. So what IS your approach?
What type of investing (other than a creative one)? What type of deals? Why do you need clients?
Personally I just go and buy houses.
Actually it can make a difference. For example if the property was sold less than 5 years ago or if the owner overpaid you have little room to negotiate. If you know the owner has had it for 20 years they may not have a mortgage and have room to move. RP data can also tell you how long a property has been on the market and for what price. If a place has been marketed a few times with different agents over a period of time I know the person wants it sold so may be open to offers.
I saw a property advertised once. Looked it up and saw that they tried to sell it 3 months earlier at a lower price. Don't know what the deal was there.
Well done!!!
It's a great feeling of accomplishment isn't it.Love the kitchen. Isn't it amazing what a new kitchen and bathroom can do.
So are you over it or keen to go again?
Care to share some figures?
Just copy and past the page from Domain.
I haven't posted photos on here so can't help there. Sorry.
Keen to look at it. Any hiccups?
Did you take the wall out?propertyjockey wrote:I am pretty sure a house will never be as cheap (at least in Oz) as when it was first built. Wouldn't this effectively reduce your exposure in the long run?
PJWhat makes you say that? I have friends that have bought houses (regional) for land value or very close to it. So virtually getting a house for free. You can buy houses for near $200K in Sydney. It would cost that to build it (after you buy the land). I've seen blocks of land less than 1km from established houses that cost more than the house and land nearby.
If you have on positive and one negative they could cancel themselves out as far as money out of your pocket. Is that what you need?
You need to decide what your long term goal is. Why are you buying property? ie what do you want to achieve from it?Will building give you equity? In order to move forward with your investing you need equity. Cash flow obviously plays a part. It depends which you nee more of at this time.
How much money are you talking (after the $600 bond)? Might not be worth the hassle of chasing it.
Sometimes the time you put in can outweigh the monetary gain (if any)
Chalk it up to a lesson learnt. Friends/family and money don't mix.Did you have a formal lease agreement?
Why? Do you have questions or do you want to make friends?
Just curious.
Scott No Mates wrote:Catalyst wrote:I'd rather have the money in my pocket NOW. I can use that $20,000 to go towards my next deposit.
So it's not a black and white issue. As mentioned-you need to balance time and money. Everyone is different hand has differing time and expertise constraints. Only you know what situation suits you.What you are forgetting Catalyst is that whilst the ob takes longer to complete the works, you are paying interest on the entire loan so not only is the ob paying additional interest they aren't getting the cashflow for that additional period either. That 20k margin would be proportional to the size of the job, so it may be insignificant in the scope of things.
No I'm not forgetting that. I factor ALL costs in when doing my renos. As I said it depends on the individual and time. You need to work out what your time is worth. 2 weeks extra is not worth $20K. I buy bread and butter properties so 2 weeks extra interest is only $600. I can replace kitchen, bathroom and paint an entire house in 4 weeks and maybe even rip out a wall.
PGD wrote:Thanks guys for the perspective,I think it all comes down to your attitude towards your time.
I think even if it ends up costing you a little more in the long run you are actually ahead because you have saved your energy, time and health.After all, it is not all about the money right?
We are playing this game with the aim to improving our lifestyle. In particularly the life / work balance.Well, at least I am.
If the numbers are not working for you no matter which way you cut it, then the deal isn't for you.
Chears.
MarioYep agree. I love doing the renos and it keeps me fit and I have the time as I don't work long hours so for me it's a no brainer with regard to doing some of the work myself.
If I was strapped for time and I didn't enjoy it I wouldn't do it. Life is too short to do things you don't enjoy.
Pretty simple really.Scott No Mates wrote:DIY = poorly supervised/overtime/over budget.Maybe in your case. Definitely not in mine.
Scott No Mates wrote:As above, unless you earn substantially less than the tradies or have copius free time & love stress, leave it to the pros. If it is an IP you can't claim your labour costs, generally thus leaving you with a greater amount of cgt payable upon sale. So, more false economy.Depends. You pay an extra $20,000 to get someone else to do it. Say you keep the property for 10 years. That's an extra $14,000 over 10 years in interest (assuming you paid the interest every year). If not it would be $19,000 and you still haven't psaid back the $20,000. So then you sell it. You get $20,000 deduction (off your capital) which means you save $7000 (after tax). So you are $12,000 behind. False economy.
I'd rather have the money in my pocket NOW. I can use that $20,000 to go towards my next deposit.
So it's not a black and white issue. As mentioned-you need to balance time and money. Everyone is different hand has differing time and expertise constraints. Only you know what situation suits you.Welcome. Tell us a bit about your investment journey. Where are you and what are your future goals?
I agree with the above re knowing when it's best to do it yourself and when it's best to pay someone.
Also consider it may take you 3 days but a professional can get it done in a day so doing it yourself is false economy.I love doing the renos but won't take time off work to do it. I will work nights and weekends but obviously you can't do this for months on end. I get tradies in for some jobs (electrical, big tiling jobs etc).
Getting a project manager will obviously add to the costs. If you can organise tradies yourself it will be cheaper but working long hours makes it hard to track progress and see when you are ready for the next trade to go in and also that they are doing what you want and to a standard. Whether it kills the numbers depends on the project itself.
Sounds like some weird investment strategy. Why 11? I can understand 3 (no lifts).
And what difference would it make if there were 50 or 100?
I've heard of different strategies but this one takes the cake. I only want to buy units that are in blocks with 11 floors and only if there are only 368 blocks in Brisbane.
Sorry if I sound cynical. I am.
Have a look at the somersoft forum. There are some good threads on there plus a few buy a lady who lives there and is buying NOW. Interesting read if nothing else.
Well I disagree with Luke. I've done reno's like this with great results.
If it takes you 6 months and costs you $35K you need to stop looking at houses and do something else.
Ok how much of the work do you plan on doing yourself. This makes a HUGE difference.
My last reno was new kitchen, bathroom, polished floorboards with carpet in he bedrooms. Paint throughout, including doors, archs etc. Took 6 weeks and cost $18K. We did everything except the bathroom and polishing the floors and laying the carpet.
I take you mean new carpet/ polish floors when you say new flooring (not actually replacing the floor).
Buy, reno and sell in that price range is difficult but not impossible. $350K + $13K stamp duty + $2K legals + $20K reno + holding $2K = $387K Now if a usual one is $400-450 there's a small to good margin. Not wonderful for selling at the lower end. I'm assuming the $400K ones wouldn't have new bathrooms and kitchens. The price will obviously reflect how good a job you do also. But keeping it as a rental should give you a good yield.
There shouldn't be a problem with taking photos.
The owner does NOT have a right to show the property to prospective buyers without your consent.
If it doesn't suit you to have people going through your home, don't let them. They can't have their cake and eat it too.
They should have told you. If they genuinely only needed to sell in a hurry then they should be offering compensation to you for the disruption to your lives. You didn't sign up for that.
Hi Jyon.
First I would not be selling if you are in Homebush. I'm buying in Sydney at the moment. I still see good growth there (just my opinion of course).
With the IP2. If you live in it first then move out you can rent it for 6 years and not be liable for CGT. You can then move back in and if you want can then move out again for another 6 years with no CGT. This is on the proviso that you do not have anorther PPOR in that time as you can only clim one PPOR at a time (except for the 6 month change over rule).Keep reading and asking questions. There's lots to learn.
Good luck. Sounds like your on your way.
It's a great feeling of accomplishment isn't it.
