Forum Replies Created
Hi Ali,
Agreeing with other comments – a lot of the negativity arises because of a lack of knowledge on the part of those giving the well intentioned advice. They do not understand the ‘complexities’ of successful property investment and tend to come back to their known point – which is don’t.
The other things that comes into play at the moment is your desire for confirmation from others around you. At this stage you are still a ‘want to be’ property investor and do not yet have the runs on the board so some of the negative comments may well strike a cord within your subconscious.
This is relatively easy to overcome and you are well on the way – by logging on here, asking questions, seeking input from those that are doing it and by providing advice to others will act as a good networking opportunity for yourself. Depdning upon where you live there may actually be people meeting face to face in your local area who could provide an even more powerful support netwrok for you as you embark on your own journey.
Just remember – you can do it!
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Ali,
Recommend you log onto Simon’s website – it has the links to various State sites.
http://www.mortgagehuner.com.au
Failing getting a clear answer there it may be necessary to phone the relevant givernment department.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Joe,
All I can add is that the discussions have been underway for a while. Not sure if there has been a final decision made yet.
A google search may reveal some more information.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kurra,
Both WA and Qld State Governments levy stamp duty on IPs – it is common practice throughout Australian states as stamp duty forms a key part of each states income stream.
There are some reductions/exemptions in some states for people like first home owners, transfer of property between spouses etc but in the main it is ‘pay up’
A search of the various Office of State Revenue (or similar) in each state will detail the specifics as they apply to that state.
A calculator can found at http://www.realestate.com.au/cgi-bin/rsearch?a=loan&t=res
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by DeFinitive:Combined income $100K.
Our home is valued at approx $550K, we owe $390K, this includes home loan and an equity loan we have.Hi Doug,
The critical issue is what do you want to achieve from property investment. In many respects the answer to this question will determine what is bets for you.
Based on the limited information provided it would appear that you have approximately $50K or releasable equity (@80%). This certainly would allow you to enter into the property investment market in some form or other.
A key question is how comfortable are you with current loan repayments given your monthly interest bill alone would be in excess of $2000.
There may be capacity to ‘scale down’ into something smaller – whether or not this is a viable lifestyle option can only be answered by yourselves.
I know if I suggested scaling down to the wife it wouldn’t be our house that was scaled down.
If you do ‘scale down’ your existing profits will be CGT free as you would be selling your existing home – there would be some leakage of profit though in things like stamp duty, mortgage duty and agents fees.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by praveentalwar:
By the way, for a IP, other then depriciation, what %age of rebate ie. taxable income can u claim off ur loan payments?Hi Prav,
The interest component only is a deductible expense.
For example (simplfied numbers only) if you are paying a $1000/month of which $200 is Principal & $800 is Interest in repayments only the $800 is a deductible expense.
The $ amount of your tax return is calculated and determined by your tax rate based on your total taxable gross income.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Joe,
Not a problem and no offence taken at all.
It’s just that most (all ?) people primarily focus insurance issues on matters related to building damage/loss, loss of rent etc without due consideration of public liability matters.
Hopefully my comments will highlight this aspect of insurance for other landlords.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Secondly, Landlord protection insurance very important a friend has a IP in newcastle and guess what, a fire brakes out taking the kitchen and dining room out.He can count his lucky stars he had insurance, property was being repaired and collecting rent at the same time.
Hi Joe and Shaun,
While this sort of ‘issue’ causes grief to the landlord it is not even close to the grief caused by a public liability claim. This is even bigger issue as the dollars involved and the strain on the individual landlord concerned are far greater.
To give an example – a boy in WA fell through a glass shower screen and died from blood loss. Someone in the properties past had replaced the safety glass with standard glass – the authorities haven’t been able to identify who is responsible but the pressures on all parties are significant and, in this case, compounded by the tragic loss of life.
Give me a burn’t out building or loss of rent anyday.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Bradles,
The only thing I would do differently is to start ‘leap frogging’ my properties a little earlier.
Other than that a happy chappy here.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by westan:but want to add get an “independant” rental assessment on the property to confirm your figures,
Hi Kylie,
As Westan mentioned and Agile alluded to, you should verify your expected rental figures with an agent independent of the selling agent. This way you’ll be able to confirm or reject the rental figures which may assist in the price negotiations.
Give a coupe of other agents a call and see what they have to say. Ask for a list and details of similar ‘to rent’ properties in the area and so on. This is all part of the hard yards you need to do to ensure your decision is a good one.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by geo:its all tied up in equity – not in cash that you can use.
Hi Geo,
Hmmmmmm – cannot use equity?
The lending world has significantly changed in the last two or three years and even a basic strategy such as a ‘reverse mortgage’ is readily available to asset rich cash poor people.
However the downside of the reverese mortgage is that the restrictions at the moment are quite significant.
There are also lo doc/no doc loans available to people who are asset rich cash poor or then there is the cashbond option (see http://www.navra.com.au) for people who are asset rich and cash poor.
All of these options enable an individual to live off their equity and retain the asset.
Then of course there is the sell a couple and live of rents possibility or even the staggered sell the lot and live off the proceeds option.
To say you cannot live off equity is incorrect – as to whether or not that option suits every individual that is a different matter.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Fulloout,
We paid $520 for a solicitor drawn up will & enduring power of attorney 18 months ago.
For me the $ is a sound spening of our money as it ensures our assets will be distributed according to our wishes. Even though our situation is relatively simple husband, wife and two kids with no ex-partners in the picture it ensures there is no ambiguity in the readings and will help preserve the peace after we move on.
Why cut a few corners to save a few dollars now – when the ultimate cost could be far greater. It is a bit like people who use public trustees for their ‘free’ wills – ever wondered how they get paid – by taking a percentage of your assets at time of death.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Kash,
One of the first things you will need to provice as a ‘would be’ spotter is a high degree of credibility. This is best (or should that be only?) achieved by being an investor yourself and by having the runs on the board.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by Lucifer_au:Also it’s hard to live on negative gearing when you retire (if you saw Steve’s free book launch speech you would know why).
Hi Lucifer,
But it is possible to live on equity achieved through sustained capital growth.
I recommend anyone who doesn’t believe this attend a Steve Navra seminar http://www.navra.com.au or wwwnavrainvest.com.au for a different view.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
Some food for thought.
http://www.theaustralian.news.com.au/common/story_page/0,5744,11058143%255E601,00.html
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mischief,
Figures (price, rent, returns) are a little subjective and an individual’s reaction to them will vary based on their personal beliefs and investment choices.
Without knowing the area (and I advise you keep that to yourself) it is hard to comment about the specific property but………
Make sure you are paying market price (or better) as there are some regional centres where local residents are rubbing their hands with glee as out of towners pay top dollar purely on the basis of a good rent return.
You wil also need to have the building inspected for pests and structural problems, check flood zonings if appropriate as this could impact on insurance premiums and see if there are any major local planning changes in the wind that could adversely affect the property values in the area.
You will also need to look at long term viability of the area. What atttracts people to the area? Are people coming or going? Employment opportunities also need consideration.
If everything stacks up, and you are comfortable with your choice, then go for it.
Do not forget to insure the place.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Helen,
I don’t believe anyone is saying don’t use the net – more is the point that the ‘net’ doesn’t fully reflect what property is available at this point in time.
Nonetheless it can be a lead point and considerable ‘after interest’ research would be needed to get the ‘deal’ over the line anyway.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Helen,
The other thing you need to be aware of is that some agents do not keep their website up to date and some of the properties on the web had previously been sold and were no longer available. The ads generally being left ‘up’ to get contact details from would be/could be buyers.
This aspect of web advertising may have been tidied up a little now that the property market is moving at a more sedate pace than it has been in the last few years.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by MJT:Aren’t builders display homes usually the flasher homes in the newer suburbs?
Hi Matt,
The floor plans are usually found within the local area too – depending upon the numbers of buyers who opt for that particular design. Where they do have an advantage is that the yards are fully landscaped whereas some Mr and Mrs Average New Homeowner sometimes overextends and then has difficulty finishing the place off to the same standard.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Yorker,
Anyone thinking now is not the right time to invest in property should read the Fred Johnson story – Fred has been investing since 1954 and regularly got advised to not invest in property – needless to say he ignored their advice and kept investing for the long haul.
Note – I am not advocating reckless decision making but thorough research, careful budget analysis and prudent decision making. A long term investor will still make money in that time frame – a short term investor may need to rethink their strategies.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
