Forum Replies Created
Hi Elite,
I suggest you get in contact with a good broker and consider exploring the lo/no doc line of products that is available.
There are some good brokers here who regulalry post and I am sure they (if anyone can) would help out.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Ed,
Rapid CG as described by the REA is a thing of the ‘past’ and at a different time. Don’t be seduced by the attractive return achieved by some people in the narrow window of opportunity that existed then.
While this REA ‘did do well’ there are also many others who tried to achieve the same result in other cities that are struggling.
Maybe the REA could give you a personal written guarantee that you could do the same.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Andy,
I suggest you search the ATO website for the CGT guide 2003/04 as there is a whole section (section
devoted to assets and marriage break ups.Stamp duty may also be a consideration – as SD is a state levied tax a search of the relevant Office of State Revenue would be appropriate at this time.
Also suggest a talk to a savvy aco<edited>ant.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi MT,
I hope you have done your numbers on $150/week and not $20K per annum as the annual difference is around $12K.
If the previous owner has been unsuccessful finding a ‘top dollar’ tenant for three years it is possible that there is no call for such a ‘property’ anymore – I would prefer to have researched the availability of a possible tenant/located a would be tenant first.
But if you have you heart set on a government tenant then get in touch with the relevant government employee housing authority in your state and/or the department of housing and works (or similar)
Derek
derekjones1@bigpond.comProperty Investment Support Available.
I don’t have stats to back it up but popular thought/anecdotal evidence/myth is that these properties do not appreciate at the same rate as standard properties due to the issues with finance.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Absolutely – your lender will organise one for you – assuming you are accessing a traditional lender.
If you intend accessing finance from the developer/seller then certainly get an independent valaution. If this is the case then it reinforces the fact that serviced apartments are too risky for most banks and they do not recognise them as suitable security for their money.
A warning bell if there ever was one.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Dave,
As the others have said the hastier you get the bigger risks you take.
I would also recommend you do some more reading – there is a list of recommended readings in the ‘Heads Up’ forum that will round off your education.
There are many ways to invest in property and extending your existing knowledge will improve you chances of success in the long term.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Paul,
Don’t be seduced by the attractiveness of a guaranteed rent – someone is paying the guarantee, often it is you in the purchase price.
You also need to find out how the gurantee is secured. I distinctly remember seeing a rental guarantee provided by HIH.
It seems to me you are pursuing a cashflow positive scenario and you’ll need to be aware that returns on serviced apartments are ‘more attractive’ due to the fact they often qualify for a 4% building depreciation rate whereas a standard building only qualifies for 2.5%.
<Inserted 24/1 – Depreciator has just confirmed that serviced apartments don’t attract the 4% depreciation claim. So you will also need to check whether or not the cmpany is using 4% or 2.5% in their cashflow calculations>
The critical point is in your first post – banks don’t like financing these properties due to the risky nature of them. They are a niche property and only attract niche investors – I much prefer a standard property with many would be tenants, security of tenancy and income and above all the capacity to sell with reasonable certainty if the world goes pear shaped.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Yes – you can pay some off and then refinance.
You can also refinance either with the same bank or if they get niggly move onto another bank.
Some I/O loans also permit additional payments being made during the period of the loan.
As to what is best for you – it all comes down to your investmen strategy.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Paul,
Serviced apartments are considered riskier due to their limited security. Income streams can be variable and costs can be significant – while the figures may stack up during the research stage the ongoing success is dependent upon the quality of the management structure.
As management rights can be bought and sold on the open market the management of your asset can be inconsistent.
The critical issue for me is the inconsistency of income. Usually there are peaks and troughs and in some instances income and costs are shared equally and yet in other instances the room only earns income if it has a resident. There have been instances of managers owning apartments in a building and making sure their unit is filled first.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Make sure that you fully understand the terms and conditions of the managemement agreement and look for the outgoings which can be on the ‘high side’.
Financing can be an issue and as such these types of properties can suck up more of your cash/equity than a standard lend. As such their long term prospects are questionnable due to potential financing issues
Also recommend a search of the forum (top left under forum boards tag)for other discussion and comment.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Originally posted by Redhaven:The agent said he gets people ringing up saying they’ll pay up to 170 for a place, but he rents them places for 120 and 130 because that’s all people are asking for them.
Hi Redhaven,
Naive me – I thought the PM was employed to look after the owners interests. It seems this ‘bloke’ is also falling down on the job.
So in effect not only are the owners taking their eye off the ball so too is the agent.
I amke sure my PMs know that they are working for me – it is all part of being an active, rather than passive, investor.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Rick,
You will also need to contact the relevant authorities in Victoria (don’t know who they are [dunce]) as rooming houses need approval, licensing and special insurance.
I am sure someone will be able to fill in the gaps for me.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Original question deleted – topic locked
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Royalty,
There are a lot of people who put a lot of time and effort into answering questions and providing comment for individuals. Breaking the question up into parts makes the initial question easier to read and responding easier and far more beneficial for you – as such Dazzling’s advice is ultimately aimed at providing you with a better response.
Having said that – as the original question has been deleted = topic locked.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Trainmad,
The formula remains the same – the key point is that suitable ‘off the shelf 11 sec properties’ are difficult to find but they can be ‘made’ with some creativity and extensive research on the part of the investor.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Geoff,
This facility is known as ‘subscribing’ on this forum and is available where you see the ‘little envelope’ either to the right of the discussion heading or underneath the message reply box.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
The critical point is the ability to finance these – lenders will not finance at 80% and as such growth and resale prospects are somewhat limited.
Don’t let the attractiveness of 7.5% seduce you into an investment that doesn’t stack up in the long term.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Garry,
Sorry[bigeyes] no can help with Newcastle – other than to say that a good accountant doesn’t necessarily have to be around the corner.
Simon (Mortgage Hunter) may know of someone.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
Hi Andy,
The process you are talking about is easily completed – there is no need to use an accountant for PAYG employees.
I do mine all the time and walk through the process with other people frequently. If you have ever done your own tax return and have a depreciation report it is pretty simple.
But in answer to your question also look at http://www.chan-naylor.com.au
A quote from their website “I service over 200 accounting firms with specialised tax advice and Chan & Naylor is in the top 5% in technical knowledge and in the bottom 5% for fees charged. They are one of only three Accountants that I would recommend in Sydney.”- Christopher Batten Taxation Consultant
Chris Batten is as good as they get too.
Derek
derekjones1@bigpond.comProperty Investment Support Available.
devoted to assets and marriage break ups.
