Forum Replies Created
Great topic, its great to hear other peoples stories. When I was in NZ recently I picked up a book by Phil Jones composed of anecdotal stories from peoples experiences, not sure if it has hit the shelves here yet. I recommend it.
I am 32 and don’t own any property, I’ve spent the last 10 years at uni and building a career, now I’m paying for it! but luckily I have the income to borrow a decent amount of money. Not having bought any IP’s as yet, I’m finding it interesting going through the process of dealing with lawyers, REA’s, banks etc. I’m finding it hard to stick to my guns and go by the numbers/instinct alone, but I’m determined to make it work!
Chris
I stand corrected. Thanks for pointing that out!
Chris
I think Perth would probably be the worst place to look for easy CF+ property at the moment. It takes time for rents to increase after a rise in prices to improve yields.
On a good point I’ve noticed in Melbourne that after reaching the lowest yield levels in 10 years, rents are on the increase while prices have dropped further. I guess the same might be the case for most eastern states.
Chris
I disagree. The first home owners grant is only available to someone who hasn’t owned a property before, once you have owned a property you aren’t eligible:
From http://www.firsthome.gov.au/
“Neither the applicant nor their spouse (or de facto) must have owned and occupied a home after 1 July 2000.
Neither the applicant nor their spouse (or de facto) must have claimed this grant previously. “Chris
Theres a number of worthwhile considerations which haven’t been made which would affect the outcome of the scenarios. Unfortunately, a lot of them are unpredictable and hard to enumerate. Such as:
1. Population growth – Australias population will continue to grow. This means demand for more housing. Also, if more people are of working age and earn the average wage, the amount of money available to spend will increase. There are both positive and negative impacts of this on house prices.
2. Living trends – people may prefer to live in smaller dwellings with less people per dwelling. This creates an impact on property.
3. Global Money market – As long as interest rates in parts of Asia are around 0.5-1.0% banks will want to lend money to Australians who will pay 7%
4. Generational changes – Some say Gen X’ers are quite greedy and Gen Y’s are more determined to delay gratification to save money to buy a house, or not spend as much generally.
While a lot of these can’t be quantified, thats what makes analysing the property market so interesting. If we all knew what was going to happen, there would be no opportunities. If I were you I’d spend less time worrying about that and more time finding them. Or don’t, all the more for everyone else. [aacool]
Chris
You can claim it if you have already owned a home. It can’t be claimed on second or subsequent homes if you haven’t claimed one before, thats the way it reads to me anyways! [blink]
“To qualify for assistance, neither the applicant nor their spouse (or de facto) must have owned a home prior to 1 July 2000, either jointly, separately or with some other person.”
“Neither the applicant nor their spouse (or de facto) must have owned and occupied a home after 1 July 2000.”
Chris
You don’t need to live in the property for 6 months within the first 12 months. You simply need to COMMENCE occupancy within the first 12 months of ownership. That is how I interpret the clause below from the govt. website anyway:
“Will at least one applicant be occupying the home as his or her principal place of residence for a continuous period of at least 6 months commencing within 12 months of either settlement or completion of construction?”
So in theory you could move in on the last day of the 12th month following settlement and still fit the criteria for eligibility.
Cheers,
Chris
there is a great article on this in the July Aust. Property Investor magazine.
Chris
Interesting stats. Does that make you think there is an adjustment to be made over the coming 6 months – 1 year back to 5-6%?
Chris
what about Frankston in Melbourne?
Things I can see are:
– large enough local population to be self sustaining
– can buy a unit close to CBD and beach starting at $150k
– access to Melbourne city if needed
– close to Mornington Peninsula
– not a lot of land left close to the CDB to develop (vacant land that is)
– good growth prospectsI’m not too worried about sharing this as I’m not planning to buy the whole place, there is plenty to go around.
The only downside is rental yields are pretty low, around $130 for a 2br unit, but I guess thats where the solution comes in!
Chris
1. Interest rate raise << rates are still low compared to the last 10-20 years
2. Petrol prices << I’ll give you that one
3. Lack of job security with the new IR laws << I never believed in unionism anyway, and unemployment is the lowest it has been for the last 10 years, almost too low some would say
4. Inflation << again, still lower than those of the last 10-20 yearsThe media hypes up interest rate rises, most informed parties, i.e. banks who lend most of the money and investment houses who invest in a lot of property, say that an economic downturn is a combination of factors, not the interest rate alone. So you have to put everything in context. What about the US economy, the trade deficit/surplus and exchange rate trends?
I’m with Lomas on this one, whats more important, building wealth or building a complex legal structure to protect yourself from something which might never happen? Have you ever known anyone who actually had this happen to them, apart from a few cases on the news a few years back?
If you know how to build wealth, then lose it all to a situation like this, you should be able to build it up again anyhow [biggrin] The only thing I would consider is some kind of insurance against this, but only for the right price. Doesn’t a home insurance or landlords insurance policy give some protection for this kind of thing?
Overall, I’d say keep the main thing the main thing. What is it that people love about legal instruments and being able to say “all my assets are in a holding company or trust” anyway?
~Chris
