Forum Replies Created
Hi Spoony,
If you are considering renovations as a means of property investment then I suggest you grab a copy of Peter Spann’s latest book ‘$10 mill of property’
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Nadine,
As a broadbrushed statement those properties are very difficult to find (a bit like a needle in a haystack level of difficulty) – and those that meet the less than $100K and 11 sec solution would, in general terms, not be classified as good investments.
As you rightly point out the market has moved on and more important consideration needs to be given to the all round quality of the investment.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Bradles,
My counsel is that you sit down and consider what your long term plans are. It seems to me that you are all fired up but with no-where to go.
Once you have worked out what your investment plans are, what you life plans are, family situation, looming issues (new child, kids to uni – that sort of thing) then you will have an idea of what is feasible and what needs to be doen to achieve your goals.
Based on the limited information provided it woould seem that the ‘golf course’ house could well be the launching pad for future investments. Given you have projected equity of $250k in the house you may want to consider retaining the house long term and utilising this in a line of credt structure for subsequent investments.
As to whether or not you should borrow the additional $100K now or wait – that will really depend on what your plans are.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Mknk,
Are you contemplating using some of your Super funds to assist with the purchase of ‘your home’ – this course of action is not permitted under the Super rules and as such you may be well advised to seek professional advice.
In theory, aside from the above comment, your plans are feasible. As with all investments undertake your research and consult widely with recognised experts in their respective fields – especially given your relative lack of experience.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by yack:Peter
There is a section about positive cashflow properties and the current state of the property market. But when I get the chance I will note the page reference.
ITS A MUST READ.
Hi Yack,
Pages 136-139
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Caleb,
Congratulations on having a vision for your future – my 12 year old can only see as far as the next TV show.
As others have said enjoy being a kid first – when you get to my age you realise this is one of the best times of your life before ‘responsibility’ kicks in.
I would also suggest that given your relative youthfulness a ‘work hard at school regime’ is not out of place so that you have as many options as possible available to you when you do firm up what you want to do. While developing seems great today – what will you be thinking in 5 years time?
If developing is still the preferred option then I would suggest that some experience in related areas may be of benefit – having said that good developers employ the skills they need rather than do everything themselves.
Have a look at Peter Comben’s website http://www.smartpropertydevelopment.com.au – there may be some ideas contained therein. Mum may even bankroll your attendance at one such course.
There are a couple of other websites that may be of use;
Michael Yardney at http://www.metropole.com.au offers courses for developers. There is also a company called Co-develop – google them for additional information.
PS – I removed reference to your Mum’s boss for purposes of anonymity.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi powmow,
Try this link for some more information.
http://www.osr.nsw.gov.au/pls/portal/docs/page/downloads/other/vendor_duty_factsheet.pdf
or this one
http://www.osr.nsw.gov.au/portal/page?_pageid=33,193927&_dad=portal&_schema=OSRPTLT
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Helen,
The current interest rates are a little bit deceptive given the rate (in percentage terms) is historically low – the flip side to this is loan repayments (affordability index?) are at an all time high (or should that be low).
As such any upwards movements will create as much, if not more, stress on borrowers than when rates were 18% in the late eighties early nineties. I believe this is one of the reasons five year fixed rates are still on the low side being, in the main, generally close to the standard variable rate. There is not a lot of room to move before people should start closing the wallet/purse.
However there are a couple of complicating factors that do come into play.
Higher fuel prices do affect a greater percentage of the population and therefore the prices currently being experienced do create a drying up effect of discretionary spending $.
The other ‘curve ball’ is the different lending climate that exists now than it did in the late eighties and early nineties – that is the willingness with which lenders allow customers to use their equity as an ‘income stream’.
But, all things being said, property is a long term investment and quality property in quality locations will still be a good investment.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Seano,
If your builder is licensed then I suggest you give the people at the Master Builders Association a call and see what they advise.
A standard building contract will stipulate the building period but be aware that is stated in working days and doesn’t usually allow for issues such as ‘wet days’, rostered days off, delayed materials etc – well according to my builders anyway [biggrin]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi mdpearce,
For mine I would also suggest that reading a variety of property investment books, irrespective of whether or not they are CF+ orientated, will make you are better, more rounded investor.
I recommend a skim through the following link
https://www.propertyinvesting.com/forum/topic/6845.html
will give you a summary, and some thoughts, about other PI books and resources.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi all,
I’ll leave all comments about bokers and borkers but in answer to Scotty’s question – another option to his dilemma is to post a summary of what he wants to achieve here and some supporting information and I am sure he’ll get a lot of constructive and very public comments that may be of use.
I would endorse Simon’s comments about most financial planners have a preference for managed and super funds – which reminds me of an ad I saw in the local paper – Want to retire wealthy? – speak to XXXXXXXXX – a financial planner with 30 years experience [exhappy]
Makes you wonder what happened to his retirement plan.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Jaffa,
I wonder about this scenario and ask (and this is not excusing this agent’s ‘attitude’) but is there a possibility that you came across as a ‘timewaster’ – it may be beneficial for you to consider this aspect of this interchange as if this is partially the case you could be missing out on the ‘good deals’ if agents are reading you as a ‘timewaster’.
Just a thought for you to contemplate.
KP – I think you’ll find your experience is not that unusual – given as recently as three/four years ago only 20% of Victorian REA were also property investors – property is analysed slightly differently by investors as it is by home buyers.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Bonnie,
I would counsel you to undertake very thorough research on your ‘plan and the property.’
As MH indicated this approach was used by some investors (or is that gamblers) as a means of making a quick buck. It was especially promoted when long building timeframes were in place and while we were experiencing very high growth rates or, at least investors thought they were assured of high growth levels. Nonetheless a lot of home truths have now come home to rest with the inner city market – a hunting ground for many flippers – now being oversupplied and values are falling.
I would also take some time to include CGT liability in your calculation – you will need a 12 + 1 day duration from time of signing contract to qualify for 50% CGT exemption otherwise you will see approx 25% of your profit disappear in tax.
I would also encourage you to adopt a longer timeframe to your investing – in my mind now is certainly not the time to invest for the short term – invest for the long term sure.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi PP,
The link to the NSW OSR supplies some detail about land tax and other matters that may be of interest.
http://www.osr.nsw.gov.au/portal/page?_pageid=33,184904&_dad=portal&_schema=OSRPTLT
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by dman66:A few lenders have welcomed us with open arms, a conservative accountant has told us that we can’t take out our equity for personal use, then claim our previous PPR as a tax deduction.
Hi Dman,
You are getting two different answers as the two parties involved offer two different services – sure the brokers are welcoming you with ‘open arms’ – you represent a solid lending client and there should be no troubles getting a loan.
On the other hand the accountant is looking at what your proposing from a taxationpoint of view and – your accountant is right. The purpose of the new loan is to buy a house for you to live in and as such there is no deductibility for these expenses.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hey Peter,
You need to find yourself a wealthy friend to guide you around these pitfalls [exhappy]
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi Rotorog,
Dale Gatherum-Goss is another often used by serious investors.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by alwayscurious:Then I will temporarily Park some of the cash in IP 2 (under performing one), spend small amount (under 3K) getting ready for market and sell it once the 12months+1day CGT thing is up. (2 months time)
I DEFINITELY plan to save 20% deposit from now on, I can see that’s a much smarter way to do things.
Hi Always Curious,
Just remember CGT is calculated between the dates the contracts of sale are signed – might be worth a call to your accountant to check on this. Depending upon the various timelines you may be in a position to move sooner rather than later.
I wouldn’t be overly focussed on the need to save a 20% deposit as this can come from other equity. Of more importance is your ability to service the loan under your personal circumstances and I think it is more beneficial and important to consider the overall gearing level of your portfolio rather than an individual property. After all saving a deposit with after tax dollars is a little harder than releasing equity.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Hi regrow,
There is no ‘cooling off’ period in WA.
http://www.reba.wa.gov.au/Sale%20by%20offer%20&%20acceptance%20-%20April%202003.pdf
Do a search on cooling off.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
Originally posted by FW:It’s the PUBLIC LIABILITY angle that’s absolutely essential to be covered.
Felicity has raised an often forgotten issue when considering the worthiness of insurance. A house burns down and ‘all’ you are up for is new house, lost rent and contents.
A tenant hurts themselves due to your negligence and you are potentially looking at millions in a worse case scenario.
Derek
derekjones1@bigpond.comProperty Investment Support Available. Ongoing and never stopping. PM welcome.
