Hi Guys,

My parents just had a similar situation. They have bought their first IP property but when they went to the bank for a loan the bank valued the house $40,000 less than they are paying for it. Their reasoning being that the property is in a new area and their are no similar houses to compare prices. I feel very nervous for my parents at the moment and they signed the papers on Wednesday.

A couple of other questions: If you buy a house @ land package do you have to pay full stamp duty on the house and land or do you just pay stamp duty on the land? What if you buy some land and then build on it later, does this incur only stamp duty on the land?

Also, “bridgebuff” mentioned that people seldom buy land packages because someone else has already made the profit. If this is the case then why do people ever buy house & land packages??? Is their more negotiation on house & land packages as opposed to an old house? Also, wouldn’t you at least have the advantage of a new house that you get the maximum depreciation on the house plus you don’t pay stamp duty???

Can someone please explain the advantages of buying house & land packages over say a 5yr old house??????

Thanks
Paul

Hi mate,

Congratulations on starting to save money. I too am saving as much money as possible. At the moment I am earning ~$1200 per fortnight and saving ~$700 per fortnight, which isn’t bad considering i’m not living at home either. Although over Christmas I will probably not save anything because of presents and rewarding myself for a good year of saving money.

I’m also getting a pay increase of $6,300 in 2007 which should mean but mid-next year I will be able to buy my first investment property.

My New Years resolution is to buy one IP next year. Which is very challenging for me because I am only 22 and have now been working for 1 year!

Keep up the good work!

Cheers
Paul [suave2]

Hi,

I don’t agree with what Kev said about selling and buying another property to renovate. It is simply not wirth the hassle with a child in the house. Also, as Kum Yin suggested capital gains less than 25% is not worth it because you won’t make enough money after you take out all your costs to make it worthwhile.

However, one suggestion that some investors I know have done over the last 3 years is to move out of their house and turn that into an investment property. And then buy a second IP with the equity from your first house. This way you have a tenant and the tax man helping you pay off both houses. Also, if you are looking to move overseas in a few years. Then you can live in a rental property for a few years until you leave.

I had some family friends that build a retirement village in Sunraysia (Regional Victoria) and to fund it they rented for 3years so they didn’t have to tied up their money in their PPoR. Then once they started selling the villas they bought a house which no mortgage.

Hope this helps. Although, as someone else suggested now might be the time to save money for a while especially as you have a child which would cost a bit.

Cheers
Paul[suave2]

hey mate,

thats a great story!

How can you afford to 5 IPs, be 22 years old and earn 35k pa??
Are the properties in regional towns and are they cashflow positive?

Do you have a problem servicing the loans and how do you go about getting approval from the bank/lender to borrow more money?

Cheers

Paul[suave2]

Hi,

Just a quick question:

With a residential IP what is the tenant expected to pay?

i.e. Electricity, water, gas, land/council rates etc..

Thanks
Paul[suave2]

Hi,

Think of Today Tonight and those type of programs as “reactive” as opposed to “proactive”. They only broadcast information that has already happened. Otherwise everybody who watches the program could just get rich by doing whatever the little person on the tv screen says and we all know that simply is not the case…

The way to become wealthy in property is too identify areas with high capital growth before the rest of the population does.

Having said that, whenever I watch an article like that I often have a look on the internet at some properties in those areas and see what the prices have been doing in recent times.

Anyways, sorry to bust the bubble so to speak!

Cheers

Paul [suave2]

Hi Julie,

That sounds interesting. Were their any particular requirements that had to met before they would approve your purchase? i.e They would only lend 80% of property value or had to have equity in another property?

Where was the property? EU? What the stamp duty, morgage fees etc. similar to Australia

Thanks

Paul [suave2]

Hi guys,

Interesting topic. Just out of interest, is it possible to salary sacrifice my HECS debt? That would be very handy. Also, how come some companies allow you to salary sacrifice everything (inc. home loans) but other companies do not. This seems highly unfair, for example the private company that I work for only allows salary sacrificing of your superannuation…

Also, I disagree elkam. 40k a year at retirement is quite sufficient depending on your situation. For example, if you have no house debts or any other debts than 40k a year equates to ~$700 p.w. which is more than enough to live off and be able to take holidays every few months. At moment, while my average weekly spending is $180p.w. which includes everything – food, rent, petrol, tennis and soccer once a week. However, doesn’t factor in registration for sport and car, services etc. However, if you are supporting two people than this would be a bit more.

Anyways, just thought i’d put my 2c in.

Cheers
Paul[suave2]

Hi guys,

I was not aware about the stamp duty exemption on a first home. Can someone please tell me how much this stamp duty exemption is? And for which states it applies to?

Thanks
Paul[suave2]