Forum Replies Created
Great points Sue.
To add- when looking at a property factor in ALL the costs and work out how much it will cost you to hold.Lora- don't pay market value. Look to make your money on the way in. As far as property in good condition. Sometimes you can save 10% off market value because things "appear" to be not in good condition. Eg a coat of paint (a few thousand max) can add $10,000 to a property. You seem to be on the right track. Choose an area and know it inside out. That way when a bargain presents itself you'll recognise it and pounce (you need to be quick). Check past performance for growth. Whether there is any planned infrastructure changes in the area. Chreck population growth charts (will demand rise?) Is it dependent on one industry? Check vacancy rates (if going to rent).
Good move not limiting yourself to units or houses. Look at the numbers. If they work , buy.Charles 1 wrote:Careful buying CF+ve now that interest rates are rising. Many suggest they will go up another 2 per cent in the next few years – that kills your positive cash flow and you end up with minimal growthYou are under the assumption that all CF+ properties have no CG- Wrong!!!
Even BA's don't have a crystal ball that can guarantee CG. No BA will "guarantee a % CG. All they can do is give you past figures, reasons for buying there etc.
Make your money on the way in. Not on 'hoping" for capital growth. No-one predicted Sydney would be flat for 7yrs.
You are not realistic.I can give examples of buying 20% under market AND getting CG in the first 2 years and getting 7% yield (doing nothing). Much more than paid the BA fee 1 day after signing the contract.
illuminati wrote:Also, just have to be very specific about what you're looking for, sometimes its hard to explain to a 3rd party why one property is appealing over another very similar property.Agree if you are looking for a PPOR. An investment not so much.
It should be about the numbers not whether it's appealing.
I purchased through a BA. My specification- under market value and maybe opportunity to add value through reno. Decent yield. CG prospects. In Sydney. That's it. I'm open minded when it comes to making money.
I recommend Jacque at-
http://www.housesearchaustralia.com.au/ Lovely lady and very knowledgeable. I like the personal service that some of the big companies don't offer.
Also
Alan at
http://www.propertunity.com.au/ Covers Newcatsle and surrounds also.
You're kidding right????
You are about to buy a place and you don't know where it is or even how to spell the suburb?
You will "supposedly" get $490 rent??? Who is going to lend you nearly 100% of the cost?
What if the bank evaluation is 10% lower when it comes time to settle? Do you have enough cash to complete the deal? If not you just threw away 10%.
Walk away and do some research.
Can someone please give a few examples of things that were advised that saved money?
Where to buy things? What to buy? or are we talking, "no don't do that do this instead"?
thanksWhat state are you in?
In NSW the council valuation is a land only valuation.No-one would want that higher as it increases your land tax bill.
I have self managed one IP that came with tenants, with no issues.
My main concern is about sourcing tenants.How do you source your tenants? Where do you advertise etc?
How do you get info about rental defaults etc.
sportz43 wrote:Hi there.
Great forums, first time writerI bought a IP in Melbourne's south east in my own name, settled in March 2010, now getting ready for doing my tax with a new accountant for the first time
Have educated my self reasonably well in depreciation and deductions but seeking relevant real time advice from informed others.
1.Is there any depreciation claimable this tax time, built in the early 1970s so before the key dates, ie, scrapping?
2. It is in the process of being substantailly renovated, hence not available for rent at this time however that is the intention soon
Because of this plain fact, I am of the opinion of not needing a quantity surveyor and a schedule at this time. However, once it is finished and being rented I can then do so, identifying deductions I can make next tax time.
Also, other costs incurred since settlement until now, project management fees, legal, building costs,etc are they rather added to my cost base and not claimable now as it is not available for rent.Any views appreciated
Has it been rented up until now? If not then NOTHING is deductable.
Send an Email to depreciator.com.au (look up their website. Scott will tell you what to do.
By the way- your lst question- if your "new" accountant doesn't know that you've chosen the wrong accountant.
How many properties does he/she own?Only get an accountant that is property savvy.
In last years tax your depreciation would only be 3 months on old fittings etc so not much. I would think better to get it done after the reno (but check with Scott). He will only do depreciation reports if you get your money back the first year.Better to buy on Christmas Eve (get a bargain) then renovate.
Work out what you can do yourself and what you need to get help with.
The most important thing (well other than a cost estimate) is to do a timeline. Some things take a while (bathrooms, kitchens) and you need to get them sorted first.
Get a list of recommended tradies ready before you start. Ring real estate agents to find what is in demand from buyers/renters in the area.
Yes but when you sell the shares you can't claim the $2,000 as a tax deduction anymore.
You can only claim on an investment. If you don't have them anymore then it's not an investment.Gets messy.
Margaret you are better posting this as a new topic. This is a post about tips.
Good advice above.
To add- how hands on do you want to be? How much spare time do you have?
Developing takes time and effort.
Buy and hold takes a lot less effort.Is your goal to retire/semi retire early? Maybe retire and develop?
It is hard to say what will suit you without knowing more basics.
Keep reading. But read more than the "how to get ### houses in 5 years.
Read some other strategies which will help you decide what path to follow.
Nothing is set in concrete. Lots of people start with buy and hold (with minor renos to increase equity and cash flow) then move into other areas as their expertise develops.With that amount of equity I'd be jumping in now. But as Jac mentioned get the setup right.
Wish this forum had where you live (City, state). That helps with advice. Different states are in different parts of the cycle so depending where you wish to buy/develop etc will make a difference to where to start.
Rosebud94 wrote:HiI am from Perth and just in the process of working with a buyers agent from Momentum Wealth to secure my first IP. I have found the process to be pretty good. Just waiting on their due diligence report at the moment before making final decision.
Good luck.
Due diligence report?
Do you mean the people (Momentum?) who are finding the property give you a due diligence report?
I'd be keen to hear what is in it.
If that's the case that's a lot of trust in one person.
I still like to do my own DD.I've used a buyers agent in the past when I was too busy. It's difficult to keep a good eye on more than a few areas. So I paid a buyers agent to find me a property in an area I was unfamiliar with (but had done enough research to know I wanted to buy in that area).
Do your research though to find a good one. All buyers agents are not equal.
Let them know what you are looking for and of course a price range. I wanted under market price (of course- anyone can find a property AT market price) with potential to increase equity (through reno) AND with a decent yield. Very happy with my purchase.
Hi Rusty you certainly are keen which is great.
I'd suggest taking a step back before jumping in head first without knowing what you are jumping into.
You haven't yet made up your mind which strategy to use. Sure you can use many strategies but you can't become an expert in all in a short time.
Options are great HOWEVER it's not always as easy as stated. I would think you'd need a background knowledge of how buying and selling works and be familiar with at least a few areas.
Carly's course is also good (I hear) but are you ready to go straight into developing? It costs a lot more than $30K equity.
Using a buyers agent can be good for those that are time poor or those not interested in looking up areas, prices etc. But with your work schedule I'd do the searching myself first.Personally I would-
NOT jump in and spend thousands of dollars paying for courses when the vehicle may not suit you in the end.
NOT pay wealth creating mobs to tell you what you can find yourself for free by reading.
Go to a few free courses. They have a variety of speakers (of course pushing THEIR course). Just don't bring your credit card. You seem to keen to hand over money to someone else. This will erode your deposit. These courses start at $5K and go up. That leaves very little to actually get into the property market. No use having all thse courses under your belt then no money to do anything about it.
Read LOTS of books.
Scour the net, reading articles, forums, real estate sites.THEN decide which path is for you. Stick to that for a few years. Moving into other areas IF you need/want to.
Sorry that did sound a bit harsh. Being in an investment state of mind I always count 100% + purchase when calculating out of pocket.
If you have the money invested somewhere else (even in the bank) that is in effect costing you money.
If you have $80,000 sitting somewhere it could be earning $300 a month so that IS a cost to you.Good luck. Some of the Housing comm places are quite good. Others aren't. Research the areas. Personally I like North Albury and wouldn't touch west Albury. Some Real Estate agents won't put rental places on their books in some streets there.
Good luck. I like the feel of the town. Everyone was very friendly each time we visited. I wouldn't mind living there myself if it wasn't so far away (and cold).
You need to do more research.
Where can you buy a place for $60,000? That's the purchase that will cost you $300-400 a week in interest? I think you have your figures wrong.
I wouldn't buy a unit. They are EVERYWHERE and rental demand is not strong in Albury.
If you bought an ex housing commission place ($130K) and did a quick reno (paint, carpet) it would rent for $210 a week which is CF neutral.
Personally I don't think Albury will go anywhere fast due to poor population growth but I have friends that disagree with me so who knows.I "would" look at removing the wall. No use replacing carpet etc if you are going to move/remove a wall.
Also it sounds like it will better suit the layout of the house. To carpet a basic 3 bed house is about $2500 for a cheap carpet.
What about floorboards for the living areas? I like them. I do like carpet in the bedrooms though. If the small bedroom has the built in robe and it's too small, take the wardrobe out. Maybe move it to the bigger one? If you rip up the carpet and tiles yourself (not difficult) it will save money. Go into a tile shop with rough room sizes (if you don't have measurements) and get a quote. Not sure of tile prices sorry.
Let us know how you go.
