Forum Replies Created
Why do you think the flat does not have council approval? Have you asked the owner? Have you asked the council?
In NSW you can apply to the Council for a building certificate, which if issued means the Council will not take any action.
Talk to your accountant. Maybe you need to get the property values as at when you moved out. Haven’t got my books with me to give you a reference.
In my view while no doubt there are a number of building defects etc you can’t identify, there are issues you can eg can you get a car in the garage, etc etc. You can try all the windows and doors for ease of movement. Fine, you don’t eliminate the need for professional reports, but you can ask the vendor or tenant about the neighbours etc.
Sonja,
You rented a house with air-conditioning. The landlord is required to repair it if necessary. If the agent causes trouble, tell them you will need to seek an order for compensation.
See for example:
http://www.austlii.edu.au/au/cases/nsw/NSWCTTT/2004/187.htmlMake a note of your conversations with the agent, as surely if they’re requiring you to climb on a roof, they would be in breach of occupational health and safety standards.
The issue probably is whether the standard of accommodation being offered will attract good tenants. If you invest in keeping your property looked after you will attract better tenants.
Your PM should check references etc so that the risk of bad tenants is minimised.
If your cashflow forces you to have to make a choice of any tenant rather than a good tenant, you’ve got problems.
One of the reasons the property is cheap if it will attract a reasonable tenant is there is not much demand to purchase. Therefore if you need to sell it may take time.
You need to research the town.
I would expect there would be penalties if your estimate of tax liability turned out to be inaccurate.
From the ATO website:
Change of circumstancesYou must complete a new application and advise us of any change in your circumstances during the year – for example, when you sell a rental property or your taxable income changes to the extent that you will receive a debit assessment of $500 or more.
Your bank should be able to issue coded deposit books so all your deposits go into the one account, but there is a number s howing which property it relates to.
I have several deposit books for one account. The tenants are happy too, because they know that their payment can’t be confused with anyone else’s as long as they use the coded deposit. One tip might be not to give the whole book to the tenant so if they mislay the book you can give more slips to them while you are waiting for a new deposit bok from the bank.
Novice Guru,
Don’t automatically dismiss this deal as too big. Do a bit more research especially into how much you can borrow, tenancy history, cost of renos, rents in area for similar housing.
You can then make an informed choice to proceed, to proceed with partners or not to proceed
If your situation has any comlications eg family trust, get professional advice. I read recently if you have infant beneficiaries structuring super payments to them as pensions may save tax.
The new land tax changes in NSW are miniscule in effect for many investors in rural areas. One property I have that grosses several thousands has land tax of $18.00 a year. Another with four tenancies will be the equivalent of at most $2.00 per week per tenancy.
I am very happy if these changes will keep people away from investing in NSW, as there will be more opportunities for me.
And as many people hold their properties through trusts they will find rate decrease from 1.7% to 1.4%, though this might be offset by increases in land values.
Just because 100k people buy a book doesn’t mean they will all act. Also of those who act several will not buy more than one or two properties and several will sell what they purchased for a number of reasons and not reinvest in property. People will have trouble with tenants, agents, unexpected repairs etc etc.
There are a number of regional cities like Dubbowhere prices increased and will not fall to previous levels but there are smaller towns where prices seem to be falling.
Unless your solicitor/conveyancer regularly does conveyancing in the state you wish to purchase I’d use someone in the state I was purchasing in.
You may find your husband’s employer’s requirements are because of Fringe Benefits Tax and concessions for remote housing.
ATO Interpretative Decisions 2003/157-160 show there is different treatment of mortgages and rent from the employer’s point of view.
Rather than hide things from your husband’s employer and run the risk of penalties to the employer if the ATO does an audit there would seem to be a number of options:
1. work with the employer to see what options might be available under the FBT laws that might provide a win for both parties
2. if this town is such a great IP opportunity, rent a house which the employer pays the rent on and buy a different house in that town
3. rent in the town and buy somewhere elseBe careful about non-arms length transactions
I would think a 12 week vacancy period is excessive. However, when I do my budgets I work on 4-6 weeks vacancy. The issue might be more one of risk management ie if the property is vacant for x weeks, have I resources so I can make the payments.
Instead of emotive words like “dog”, maybe it is better to look at other terms like opportunity cost, ie if I do y, then I can’t do z. Is doing y the best return on my money.
The issue probably is not whether Alf’s friend was foolish to sell, but whether what he did with the proceeds was a better use of his money than keeping the house. If he invested in something else eg other property, shares he has probably done OK. If he used the money for a new car, etc that may have been a luxury.
Some years ago some friends sold some land. It was obvious the price would only go up because of various factors. They used the proceeds towards their new flat. They did well. The land increased in value too.
I sold some comercial property I had 5 years ago. After costs and inflation I had made no taxable capital gain. The sale price was substantially lower than the replacement value (still when I purchased the purchase price was substantially lower than replacement value too. That property has gone up in value. I invested the proceeds in other property which has also increased substantially. The sale put me in front by giving me the capacity to invest elsewhere, change my risk profile etc. The decision to sell was the correct one.
If the property hasn’t been used for income-producing purposes, non-capital costs of ownership such as council rates can also be included in calculating the cost base.
Selling costs and purchase coss are also taken into account in calculating the taxable gain
There are a number of sources that might be useful:
Council, not only generally, but there might be things in their management or social plans
local newspapers – try the local library and read the bcak issues as that will give a picture of whether industries are growing, have potential or are declining
if any of the major employers are public companies have a look at the past couple of annual reports and see if they mention any plans for the area
tourism office
chamber of commerce or business associationYou will often find there is a demand for reasonable quality rental accommodation in country towns. People might shift there for work on 2-3 year contracts and not want to buy for such a short time.
But as Richmond said you need to investigate the town. For almost all my working life (27 years) I have been in towns under 5,000 population. Investors rarely had problems renting out.
There were meant to be a number of primarily business taxes to be cut out as a result of GST, not necessarily residential stamp duty.
Those figures look like Dolf de Roos, the theory being it’s based on numbers so you may need to look at 100 to buy 1. How you look is up to you, may not need to be physical. But they need to be properties that meet your strategy ie if your budget is $x then looking at 99 properties that are selling for multiples of $x doesn’t count. Then in that 100 there might be 10 you put offers in on, as you’re trying to put low offers in, you’re not going to succeed every time. Maybe the three for finance also includes where you’re arranging finance but a builder’s inspection doesn’t come up to scratch.
Libraries will have some of the books or can get them in for you.
Open houses can give you the chance to inspect without feeling you’re wasting an agent’s time.
I follow a number of towns reasonably closely. This makes it easier to spot a genuine bargain.
Mining towns can be risky as their economics depends on the orebody, and world prices. My experience is they have boom/bust cycles. If you can buy at the right time there is money to be made subject to the orebody and world prices.
Do plenty of due diligence. There were a couple of threads earlier in the year on investing in mining towns.
Bear in mind if you need to sell it might be hard to find a buyer.
