Forum Replies Created
Thanks Terry, I would love to come and speak with you but I read somewhere your not taking on anymore Clients :)
Im yet to speak with BMT and have an appointment with my tax accountant tomorrow, although I need to find a different one that actually owns property and better understands what we are trying to achieve..
Hi Benny, Thanks for the message!
Build went ahead – Have lived here for just over the 12 months now, Have just been pre approved for $750k if we sell or $550k holding onto this. https://www.realestate.com.au/property-house-qld-pimpama-126686478 – Rental appraisal $630-$670pw, 2x Bank Valuations $650k
However after much more education & research since this last post. The strategy has definitely changed, and looking back on it I would not go down this track again, buying & building in an area where there’s a ton of land, no scarcity, and nothing to really drive prices long term.
We are now looking to build a portfolio holding only properties within 10km of CBD in Brisbane at this stage, and Melbourne in the next couple of years, so for us its the opportunity cost of holding onto this property now that may not grow for many years (hence why its on the market, if doesn’t sell will rent it) However I guess you could say it served its purpose & isn’t a complete mistake in getting us from $10k to our name in a new country to potentially 2x houses within 2yrs.
im also only 27 and looking 20-25yrs down the track holding this house may not be a bad idea. im more just considering the the fact that once I get past 2mil in borrowing the serviceability may get tight and I don’t want to be holding an underperforming property when I could hold something else..
I too have recent ally been speaking with Ben, very helpful guy. Had the same sort of advice, however more to buy past the BCC and in the mortenbay area, on a larger 600+ block, so a granny flat can be added. There is a lot of building happening just north of Brisbane.
Acacia ridge is 15km south of Brisbane CBD, I thought about this area also as my office is close, however is going through decent growth at the moment, I believe over 10% & counting in the last 12months, so would need to get in quick and anything at $350k needs a Reno.
Thanks terry, those are defiantly the questions I don’t know the answers or pros & cons on.
Would you give your opinion on those 3 things?
Borrowing capacity (in my mind this is well increased because 4 people are able to service it.
Joint liability (also in my mind this is a good thing, things turn pear shaped for 1 individual there’s still 3 to carry the load)
Land tax (something I know nothing about, would have thought it would be no different as to 1 person buying)
Speaking to my accountant was vague, hence why I’m looking for another one. But as far as options go, a simple company sounded far easier than going with a trust structure.
Thanks for your reply,
You are correct its 70k by 4 ways, and also correct on our focus of generating income, this is our main goal however, If we could some how figure out how to make that $60k work for us that’s a lot of cash we can use for a deposit, 2x decent renovations, servicing a couple loans for a year etc etc the list goes on.
Do you know, in terms of finance, is this going to be beneficial having 4x incomes involved? as I understand even though liability is shared, say 25% each. We are still 100% liable if it hits the fan so to speak..
A friend of mine has just sold his Unit in new farm, paid about the same as you around the same time, in an older 8 unit complex, however he was able to make changes and renovate his and ended up just settling for $405k. I’m not sure what state yours is in or if you can renovate at all, but I know Unit prices seem to be flat if not slightly dropping as people are aware of the over supply in the pipeline.
Really from all info I can find I would have thought we have a good deal?? That works out to $1,150sqm.
Maybe your thinking just the build?
That build price is finished, driveways, landscaping, deck, ducted aircon, 6kw Battary solar, fencing, full render. 2 story house.. I would have thought $1150sqm is a fair to good price for a above normal spec home?yes in pimpama, slab is due to go down next week, might start a forum for the build!
Cheers
Thanks benny,
Build cost is $341k.
Reasonably mid to high level build.Those figures of 27k are from a simple phone conversation- someone’s opinion.
Using an online calculator came up with a simaler result for a house of that Sqm and inclusions. Capital works make up $8,500 of that figure, min to max is $21,000- $27,000- using demonishing scale, the 5thyear depreciation would be $14,000-$16,000 roughly.
I guess what I’m getting at is if depreciation was to say an average of 20k in the 1st year, and we are taxed at say 33% on our income, we would be likely to receive a decent tax return within the 5years and defiantly be cashflow positive for the first while.
I have personally just bought here, in release 3 Gainsborough greens estate. Obviously there is a lot of new builds here & still a lot of land, but with the new approved Westfield due to be finished in 2017 500m down the road im hoping there’s potential.
The estate is built by Mirvac and actually has some strict covenants with full render, block/house sizes, and fencing that make the estate look very decent as opposed to the rest of the area.
I notice these releases are basically selling out within weeks & prices have gone from $199k to 230-240k+. And it’s at stage 4 now.
Property in the estate backed into the golf course have 4 bdrm 270sqm places on 400sqm blocks, marketed for $710-730k. Not selling.
I purchased mine 522sqm corner block, $244k, spent $326k on the turn key build, 296sqm 2 story. Ducted air con, 6kw solar + battery, upgraded flooring & higher quality kitchen, I.e thicker stone benches, waterfall edges, push draws etc.
Not expecting Big CG on a $570k spend but who knows in a few year time..
My 2cents
Codie
Hey Jesse, no expert myself just thought I’d throw my opinion in..
My personal thoughts if I was in your situation, would be to use the money entirely to avoid low equity insurance (appx $17k in your case) and depending on your situation, after 6 months refinance & go for either your own home or another IP.
I’ve personally just gone through Westpac in QLD, and used a 40k deposit on a $585k property. 21k in low equity fees alone!!
Not sure of your situation exactly but why not do a 450k build, use your savings, get the GOVT grant (depending where your based) then rent it out after being in it for 6 months?
You will be able to depreciate your new IP in 6 months, and with the income your making the tax write offs alone are enough to make anyone excited..
Hope it helps,
Codie
