Forum Replies Created
Hi Wonga,
You are not doing anything wrong – the consensus of the forum seems to be that property meeting the 11 sec rule (in sustainable localities) is becoming scarce in Australia – a bit like a needle in a haystack scare level.
Having said that those who have developed good networks are still finding them and others are moving (have moved to NZ).
Having said that the 11 sec rule is only one of many selection criteria that should be used when seeking positively geared property. There are many more important attributes a property should have such as employment levels in the area, infrastructure, transport and so on.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by clare k:This is my first message….hope i did it right!!
Hi Clare,
Welcome aboard and you ‘did good’
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Apprentice Investor,
Give http://www.depreciator.com.au a call. Scott (AKA depreciator) is a regular poster.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Greg,
Not a problem.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
To me it’s not a question of house or unit per se – but more about what is the relative value of the piece of land that the property sits on.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Henry,
Nah – checked past posts and Sponge is based in SA and started his NZ journey very recently. I see the question as being genuine not like another of his early post of a couple of months ago.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mad-Cat,
As PG said set up your super fund as a SMSF and you can buy whatever you like provided it complies with the legislative requirements.
If your superfunds are limited you can set up a trust like structure and borrow the remainder of the funds needed – bear in mind costs and income is apportioned in accordance with the ownership ratios.
SMSF cannot invest in your own place of residence, they can invest in residential property and are able to invest in commercial property – including the property your business is housed in, if appropriate.
PG has provided a link to a company that can assist with these matters. SMSF are not something you should try at home without first seeking good quality professional advice.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Spodge,
I must confess I am no expert on NZ so please take my comments with a ‘grain of salt’.
I did a quick net search and found a website that says K’s population has remained stagnant in the 1991 – 2004 period at just over 5000 people.
Population growth is one of the key drivers of sustainable growth and rental demand and, based on my investment criteria, K wouldn’t cut the mustard for me.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Antoinette,
Welcome aboard and congratulations on wanting to ‘improve your lot’ – there are many others like you here, doing the same thing.
There is no need to rush headlong into anything so you have got time to make yourself a coffee and take some time thinking about what you do want to achieve from property investment. Believe me it can be a grind and there are time when your courage is required and times when you think ‘why’
For now I suggest you look at https://www.propertyinvesting.com/forum/topic/6845.html
as there are many way to invest in property and some may be more suited to your individual circumstances than others.You can also spend some time reading more relevant threads on the forum – a search facility in the top left corner of this page will save you time and start ‘educating yourself’
Ultimately you will need to make a decision and buy a property – and this is the time you really start to learn. In saying this – note I am not advocating a headlong ruch into things, nor am I advocating too much research. You will know when the time is just right.
But remember the first property is the ‘hardest’ and don’t be the victim to analysis paralysis.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Greg,
The approach you are seeking comment on is, on the surface, similar to an approach Steve Navra uses and recommends and one which we are using too – a little early to definitively give it the thumbs up – but compounding effect of growth is already having a significant impact on our ‘measly’ parcel.
Steve Navra is a financial advisor who recommends buy high growth properties and then as equity levels grow use these ‘funds’ to leverage into a share fund (he operates such a managed fund that only gets paid if it outperforms the ASX 200 (?)) to provide a cashflow supplement to assist with holding your growth properties.
Steve Navra also has a cashbond structure that uses your equity to generate additional income for your personal and or investment use. His seminars are certainly worth the cost – take a look at http://www.navra.com.au
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by TeacherK6:I have a thought provoking situation on my hands. I am considering selling an IP, The loan was for 80% of the purchase price, but since then i have re-financed other properties and used the equity generated to reduce the loan to a balance of roughly $1000, ie just enough to keep the loan open. the re-financed money was from Investments as well.
Hi Jason,
If I understand you so far you have refinanced IP loans to pay down another IP loan. Is this correct?
If this is the case it seems to me all you are doing is shuffling debt around the place with little apparent reason and probably incurring mortgage and stamp duties etc as you refinance.
If this is the case all exisiting interest charges on the loans will remain deductible. You will need to check with your accountant if this remains the case once you have disposed on this particular asset – I suspect you will be OK as the orginal purpose of the loan was to buy an IP.
My question is this… if i choose to sell, what should i do to better set myself up Tax wise? (and keeping it legal) these are some of the situations i have thought of already…a) Should i Pay out the loan and sell off without a mortgage?
b) Should i leave everything “as is”?
c) Should I withdraw the money that was my initial extra repayment, invest it in a managed fund then sell??Selling a property with ‘mortage’ or not is really inconsequential in terms of money flow apart from the need to discharge the mortgage first. The small debt here makes this largely irrelevant – so this to me is a non-issue.
The more important considerations relate to what are you trying to achieve in the long and short term. The best answer to ‘what to do with the money’ is best determined by these answers. In other words where is the best place to put this money for you?
My counsel would be for you to look at your whole portfolio to see what it has done and is likely to do into the future and then consider how best your cash proceeds can be used to fulfil your original goals.
Bear in mind if your portfolio is cross-collateralised the bank may want some of your proceeds anyway and you may have minimal say in where they go.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi DD,
As with all (?) real estate generalisations there will usually be an exception (or 2 or 3) but in my readings, dicussions and experiences rental guarantees are usually included with overpriced property that has a ‘usually inflated guarantee’ to make the investment ‘better’
May be I should modify no 13 to If there are rental guarantees – conduct thorough research to ensure market rates and prices apply.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi John,
Yep they are all busy wrapping and opening Xmas presents, planning Xmas holidays and stocking up for new year.
You may find that a tenant will put up with the reno anyway if you are reasonable with the rent and if the work is not invasive. Alternatively do the work minus tenant and if the renovation is suitable you will make up for lost rent with an increased rent return when the work is finished.
Be wary of over-capitalising.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by calvin@thirty4:Currently we bank with CBA (because they’ve been good to us) but, because of my employers Home Purchase Plan, the mortgage is with another Lender.
Hi Calvin,
Your proposed strategy is exactly the same as the one we currently employ. Once you have your LOC set up as you propose there is nothing to stop you going to ‘anybank’ as distinct to staying with ‘which bank’ to get the balance of your loan funds.
In fact a good broker will be able to line your short and long term needs with a lender that is more favourable to your personal situation and goals so that your total borrowing capacity is maximised.
In our situation our core banking is with Westpac but we have other loans with other institutions Ie simplistically 20% (edit inserted or 10% depending upon your strategy and beliefs)+ costs from Westpac LOC and remaining funds from lender X or Y or Z.
Offset account (against PPOR receives all income) and electronic deposits and withdrawals maintain the comings and goings of the accounts and the various transactions. This helps us reduce our monthly non-deductible interest bill with the assistance of rental income received.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Tools,
I am currently doing this – using split investment LOC to pay for all IP expenses (apart from interest) instead of from ‘savings’ – and then paying the equivalent sum of money off the home loan from ‘savings’.
Needs discipline but effectively shifts non-deductible debt across to deductible debt.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Simon,
A little information from t’otherside that may be consistent with the Melbourne market.
Wizard have just completed a study of long and short term sales trends which revealed some interesting pieces of information:
1. During the past three years compounding growth rates for two bathroom homes was 12.6% and for one bathroom homes it was 15.9%.
2. The superior growth rate for one bathroom homes continued over a 15 year period.
3. 1, 2 and 3 bedroom homes outperformed home with 4 bedrooms. The compounding growth rate for one bedroom homes was 12.9% whereas it was 10.7% for four bedroom homes over the recent five year period.Obviously a simplistic set of statistics that would warrant further investigation but these results ‘support’ the long term potential being bandied around about smaller units.
Of more important consideration is the location of the property – simplistically put the better growth properties are closer to city centres – albeit redevelopment/renewal programs can distort these findings.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mgr,
Another option would to be to look at http://www.realestate.com.au and search the ‘rental’ section for comparable properties in similar or same locations.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mgr,
I am surprised by the management’s comments. If they are any good they should be able to tell you what the market is currently paying in the area and in particular this building. Very strange response to say the least.
Nonetheless try;
http://www.rta.qld.gov.au/median_weekly_rents.cfmor
these will give you some direction.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Nats,
A number of financial gurus advocate a ‘pay yourself first’ approach so that you do get into the habit of looking after your future. The coonsensus seems to be that the earlier you start the habit of paying yourself first the easier it becomes to maintain the habit – this leading to greater discipline and a better asset base behind you.
Often what happens is that many people will spend up to their budget limit, irrespective of their income, without actually putting something to oneside for their future.
Without doubt a budget is an effective tool in the grand scheme of things however the figures will be relative to a whole range of specific individualised factors. The key issue is your budget needs to be affordable and within the constraints of your income.
Just as an aside we do an annual budget and know where our $ are going. This process certainly enables us to spend within our means and put something aside for the future.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
There is an article in October 2004 API that discusses negative gearing. It may be of interest to the forum.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
