Forum Replies Created
Hi EW,
The first steps are always the hardest and asking questions, as you are, will help you clarify your thinking.
By asking questions you will get to understand some of the 'ins & outs' of property. Bear in mind you will, from time to time, get contradictory advice and comment (see above comments as an example) the challenge for you will be to work out what makes the most sense for you.
I don't live in Melbourne but as a rule of thumb I would be looking at suburbs reasonably close to major transport nodes and then look to be within proximity to schools, shops, employment zones and so on. Try and stay in suburbs where home owner proportions are reasonably high.
Once you have a small list of suburbs then start to prune the list & I would steer clear of those suburbs out west which were heavily marketed to investor groups.
Then start getting to know your chosen suburb so you can identify an opportunity when it presents itself.
Nobody said this stuff was easy – and it will take some of your time. Having said that the rewards are well worth the work.
Congrats on starting to think ahead – having lived in northwest mining towns I have seen people burn their high income earnings on 'toys'. I have also seen people make good use of their high incomes while they are there. Looks like you fall into category 2.
Grab yourself a decent broker so any move you make from here minimises the amount of cash you put into the deal. Try and retain as much of your cash in an offset account so you retain flexibility moving forward from here.
I don't see much of a problem in you now grabbing yourself a property on the Sunshine Coast that will eventually become your home. Set it up interest only and maximise deductions in the first few years of ownership.
Given the Sunshine Coast market is flat you would be buying low – and the next few years may provide you with some growth to make your investment decision beneficial in the medium term.
Hi EW,
I am not a broker but I agree with Tom's comments. I think you should be able to borrow more than the banks have indicated in your original post. Grab yourself a broker who can work with you over the long haul and one who understands property investing. They will be able to work with you to make sure your borrowings are maximised and structured correctly for the short and long term.
Sound like you have a 'small plan' in mind. This is important because any property you purchase should fit your plan and not the aspirations of the saleperson you end up talking to.
Recent reports for Melbourne property haven't been terribly positive so you may wish to look for something you can add value to – on this note a one bedroom apartment is probably not the best point for you to start as your capacity to add value and equity is somewhat limited.
Hope this helps
Hi JPS,
Sounds like you are covering the bases pretty well.
Make sure you get assistance with your conditions that you want to insert in the contract. They need to be written so there is no ambiguity and that your interests are well served through them.
All the best with it.
What are your total BC fees?
Lifts are one of the most expensive items a body corporate needs to cover each and every year.
Is there a pool? Also expensive to maintain.
Offset rather than savings for the very reasons Jamie mentions.
Tis a crazy world we all operate in now – that is for sure.
Slightly off topic but related to the discussion.
I was reading an online article earlier today which outlined some recent research into kids 'readiness for school'
To all parents of pre-school age kids, in particular, please read the article, and do something about helping your kids get ready for school. It will help them enormously. Here is the article.
Most pre-primary/kindergarten/pre-school teachers can identify which kids are at risk very early in the year. Chances are those kids at risk in pre-school will struggle throughout their schooling.
Governments could help out by investing more funds into early education areas (a bit like preventative maintenance) than the current approach of throwing more money at the other end. But that thinking is long term and not the quick fix required by political parties.
Terry is right July 2013 sees the world of financial advisors changing.
Catalyst wrote:Funny I thought everyone would love to see a reno so when we did a big one last year I posted asking if anyone wanted to have a look while we were doing the reno to just message me. Didn't get anyone interested.Then I noticed Nathan charging $299 to see his reno and got loads of takers. He's done it a few times now. Limit 20 people. Not a bad way to make a quick $6K.
Therein lies your problem. For some reason people seem to think free stuff is worthless whereas if they have to pay there is a perception the content is better.
This thread is a bit like having a hearing problem and only hearing half of the conversation.
Might as well delete it.
Further to Terry's comments.
While a 'likeable' factor is important when looking for service the over-riding factor should be their level of knowledge.
After all you want this person to help you invest wisely – not be your buddy.
Hi Ralph,
Missed your question – so apologies for that.
IMO truly independent advisors are much better than someone who works for major insurance firms and/or banks. I do recall seeing somewhere an analysis of whc owns what in the financial world and I found the level of interconnectedness 'intriguing'
IMO you are better off seeking someone who is truly independent. As the financial services industry moves to a 'fee for service' model I expect the quality of advice will improve. In the meantime I suspect there will be a bit of a shakeout of the system as those who are very reliant on commissions, and trailers, will have to move to a new paradigm.
But, having said all of that, the service industry is dependent on the quality of service provided by the individual you speak and meet with. Your experience (good or bad) could be an 'out of the ordinary' one and not reflective of the company or industry.
Mind you when I was investigating becoming involved in a financial planning franchise some years ago I took delivery of a franchise marketing DVD. The franchisor (a well known one) claimed that small, truly independent financial advisors were behind the eight ball due to the level of compliance required.
Your BS detector really needs to be switched on when speaking to various advisors.
Hi Brines,
Teh formula for calculating rental returns is
52 weeks X weekly rent divided by purchase price multiplied by 100 to give rent return in percentage terms
Eg rent of $400/week and property being purchased is $300K
Rent return is
52 X 400 = $20800 / 300000 = 0.069 X 100 = 6.9%
Some people allow for vacancies and prefer to use 50 weeks in the year. If this describes you you would replace 52 weeks with 50 weeks.
The information about price and expected rent are both available through advertisements for the property or by contacting the selling agent. If there is no lease in place the agent should be able to provide you with an estimated rental figure.
Banks do factor in expected rental income when assessing your borrowing capacity.
Ring your local council and ask to speak to the relevant department. While you are on the phone speak to your insurance company and ask them the same question.
I would suggest you'll be looking at fitment of RCDs, exhaust fans, maybe some form of firewall depending upon where the burner is in relation to walls in the flat.
Hi Jingle,
You now move to a different issue and that relates to CGT.
If you live in the property first you can have a further 6 years of CG tax free status.
If you rent the property first then the CG tax free status only starts when you move into the property and remains in place while you live in it and can be extended a further 6 years when you move out (with conditions)
If the period as a rental property is short then the downside is relatively small – if it is for a longer period of time then the tax impost may increase.
Having said all of that – tax benefits should only be considered as supplementary to your investment decisions. After all you should be planning to be a profitable property investor who makes money and may well incur some tax liabilities along the way. I am sure sure you are not planning on losing money as a property investor just to save tax.
HI Waz,
Don't know your personal situation. Nor do I know the land tax rates in NSW but ……………………………..
I don't think you should be making your decision solely based on possible land tax bills.
Trusts are primarily designed as a means of protecting assets. This should be your primary consideration and not teh size of the bill.
Hi Alice,
Some of those posts are very dated so you may wish to see if you can PM or email both people directly.
If I buy two belts w/o keys for my daughters will I get a discount?
Terryw wrote:for family law matters celibacy
Geez Terry – I cannot see many clients lining up and paying fees for that piece of advice.
Like Catalyst – with the cash option you have mentioned nothing really changes in my opinion other than having a buffer of some form is important.
In general terms I would not be overly concerned with LMI costs. Having said that I am not fully conversant with your situation to make further comment.
