Forum Replies Created
Seems RBA/ABS haven't got the resources to measure monthly CPI and still rely on quarterly results.
http://www.watoday.com.au/business/rba-hurt-by-lack-of-funds-20120504-1y4g0.html
Could explain, in part, why they seemed a little slow to move this time. Certainly an annual inflation rate of only 1.6% seemed to catch a lot of learned people and organisations out.
Hi Mattsta,
Not sure where you live so some of my comments may be redundant.
Regional cities in WA are considerably smaller than those in other states and in many cases, with a few exceptions, land is availability is still at a reasonable level. In some cases land availability cannot meet demand in these instance you are paying overs for the land.
Regional towns are even smaller with populations often less than 5000.
Tread warily if looking at regional WA.
Hi S,
Just repeating vested interests still apply.
All good questions and the ones investors should be asking.
Estimated rents are all based on our research which is combined with rental assessments by agents independent of us and who have good local footprint in the area being looked at.
Estimated completed valuation are also based on market research and backed up by independent valuations by licensed and independent valuers. In Perth we use Hegneys to conduct OTP valuations for us. Pilbara valuations were done by AVS.
Note the valuations we obtain are only used to reinforce our research and would be no good for finance purposes.
Given the duration of time between start and finish of a project market conditions can change and estimated rents and on completion valuations can go both ways. This is something potential investors need to consider.
We endeavour to keep planning delays to an absolute minimum through long options, the property being zoned correctly to begin with and by having lots of discussions with planners before settlement so we know how the planners are thinking before any plans are submitted. For example we are due to settle on a block in South Hedland this week and the plans are almost ready for submission to council.
Having said that there is potential for delays for any number of reasons that are outside of our control and tnvestors need to consider this possibility too.
Accompanying each project are comprehensive legal documents which outline the obligations on all participants including instances such as those you outline. All investors are encouraged to have their legal advisors check the documentation out before being involved. These are all made available to investors before they commit themselves. Having said that we are not in the habit of throwing the documentation around to all and sundry due to the nature of the documents and the intellectual property involved.Hope this helps – happy to chat on the phone if you want more details.
Hi Laury,
I am not one for placing all loans with one lender. It is very easy for the lender to gain upper hand in the lender – borrower relationship.
When looking at P & N CS make sure you find out how long their I/O periods are for. As an investor it is important you maintain flexibility and have maximum time yup your sleeve just in case your world goes pear shaped.
In terms of P & I on some of your portfolio – I would suggest I/O linked to your loans would be a better option. While you have access to work related housing at the moment. Is this always going to be the case? If you moved back to Perth I suspect you would need to provide your own housing at which time you will be grateful you can access the funds you have put in your offset account.
I/O in an offset account has the same effect as P & I but you retain maximum portability of your money.
PS Good job on Cannington
Danny F wrote:I currently do pay P&I on my loan. I will look into this further.Changing to interest only should be a relatively straight forward process for most banks. There is no need to delay this action on your part. Effect will be pretty much immediate and you'll be able to start using the money saved converting to Interest Only to tackle that $40K
Danny F wrote:I do not know enough about withholding tax variation form so i will look into this as well.Happy to explain it to you. A withholding variation is relatively simple for most people. If you want some guidance send me a PM and I'll talk you though the process but you'll need to fill in your own form. The ATO is currently accepting variation forms for next financial year. So it is a good time to get yourself moving and take action.
No worries Danny.
Now I don't know how long it has taken to rack up the $40K so what I say may seem like a slow process but good things come to all who wait.
At the moment your focus should be to get rid of those personal debts while making sure you maintain and retain your investment property if at all possible.
1. Set yourself a realistic budget starting with your fixed commitments loans, rent etc
2. Budget costs for needs such as food, utilities, transport, fuel etc
3. See how much you have left over – this is your discretionary spending.But in your case you will need to devote a fair chunk of your discretionary spending onto a debt reduction strategy.
Simon Macks (an old time poster) worked a strategy that started with the smallest debts first. His strategy was to pay off the smallest debt as quickly as possible (make it hurt a bit by reducing expensive social/lifestyle habits).
Once the first debt is paid off use the money normally earmarked for the smallest debt to then tackle your next smallest debt and so on. Eventually you will only have one personal debt with all of your surplus money being devoted towards reducing this debt.
But – as you said – changing habits is very hard. Set your self achieveable goals and work towards them.
Quick question are you paying P & I on your loan. If so convert your investment loan to Interest Only. Use any money saved through this process to tackle debts. Also consider submitting a PAYG Tax Withholding Variation form so you get some tax benefits back in your pay packet rather than at the end of the financial year.
PS Cut up those credit cards.
Danny F wrote:I could pay off my personal debts and free up cash to invest.Hi Danny,
I'll take the other approach – reading the fine print it would seems like you are going to have to confront some spending/lifestyle habits. I see little value in selling an asset to pay off personal debts unless there is no other option.
Sure you can upgrade kitchens as per the other posters have suggested but the underlying issue may well be outside the four walls of your property. Being a successful investors requires good decision making AND good personal financial management.
Seems like you need to work on your management first as $40K in personal debt will be a huge hand-brake on further borrowings.
wuzziemoo wrote:You have to be careful with contracts, wording is everythingNever a truer word has been spoken.
If you are writing conditions make sure there is no ambiguity whatsoever. Ambiguity leaves comments open to interpretation and then the muck can hit the fan.
Hi Fellows,
Interested that you have had a good experience with Carol. Someone I know quickly jumped ship from her management – mind you that was a few years ago and things may have improved.
WI Sorry – can't help you with a recommend in that area.
Was at a business breakfast this morning with Michael Pascoe.
His opinion was the rate reduction was not so much about trying to kick start economy again as we are going OK (graphs to reinforce that argument) but as a pre-emptive strike against the Federal Budget due for release next week. Swan et al have harped on the need to return government budget to surplus and to do this they have decided to remove government spending of 2.7% out of the economy in order to return the budget to surplus. This is why we needed a rate reduction – not so much in response to current conditions but what the RBA's models show when govt spending reduces by 2.7%
Interestingly our government deficit amounts to two bits of not much when compared to other benchmark economies.
Ninder wrote:Thanks Derek. Jindalee and Brighton seem too far away for any capital growth. I've got only 10 years to retire and am hoping to get into somethng with capital growth.Without knowing the ins and outs of your situation it may be that an unhealthy focus on capital growth and negative gearing may not be the right strategy for you. 10 yrs could be one property cycle but I suspect there is still a big hangover from 2006/07.
Caught this article on today's online edition of "The Age" that may be of interest to you.
I enjoy the outback and try to get away every year for at least three weeks. Highlights so far include; Cape York, Canning Stock Route, Victorian Alpine Areas, SA Outback, WA Outback, Gibb River Rd, Rudall River NP, Cape Arid and so many more.
Currently organising a week long fishing trip to Ningaloo and going again for 3 weeks in July.
Summer months spent as local Fire Control Office for our bushfire brigade area.
Water and termites go together as termites will actively seek out water sources for their own needs.
That is why it is so important to take outlet drains off airconditioners away from your building, fix tap leaks, ensure sprinklers don't spray onto walls, and so on. Stay on top of water leaks and you are some way to helping manage any termites in the area.
moneystream wrote:Jindalee and Brighton.Lot of land in those areas and in many parts you'll be surrounded by homes under construction.
I tend to agree with the others get into some of those near city suburbs where development opportunities are available.
Have a look at places where densification is planned and try and ride those coat tails.
But key question is what are you trying to achieve? Your goal will determine the area.
doddsy1 wrote:We have a dual income and a fair bit left over that we seem to be able to waste without any effort at all.I was reading an article by Bill Zheng in recent weeks and he made a comment about successful investors also know how to manage their money. Got me thinking a bit I would say he isn't far off the mark. The reason I make this comment is that being an investor is not the panacea for everything and the first step in, what will be a long journey, is to learn to manage your money.
By your own admission you seem to be able to 'waste without any effort' – to me this isn't a great sign unless you have recently recognised the issue and are now prepared to do something about it.
Having said that having $20K put aside is a solid start – but the questions for you are: "What are you earning?" and "How long did it take you to put aside the $20K?" and finally, "Are you really prepared to make some sacrifices to your current spending/lifestyle habits to get started?"
doddsy1 wrote:We have discussed at length what to do with our money and have so far not committed to anything though the idea of finding a finacial advisor keeps popping up.Most people here are anti-financial advisors as they, typically, are anti-property. Most advisors still work on a commission basis and got this reason they have a preference towards managed funds, shares and share funds. That is not to say these products don't and cannot be part of your overall plan but financial advisors/planners tend to be heavily biased away from property.
It is also fair to say most people on here are DIY investors.
doddsy1 wrote:We have read Steve's books and are pretty keen to start investing in propertyNot much argument here on this point.
Written confirmation by council that the proposed plan fits on the block.
You will also need to make sure the provisional costings are suitable for your standard of building. Some PCs are set at a low level and if you were to build at the price the fit out quality can leave a lot to be desired.
Check PC for site works is sufficient for the block in question. As above PCs for site works often do not take into consideration that actual block. Advise you to at least look at the block so you can determine how 'flat' it is. The steeper the slope, and it doesn't take much of a slope, the higher your site works will be.
Michael 888 wrote:Also everyone please note that the Andrew Allen spoken of above IS NOT THE ANDREW ALLEN who is a member of this forum and Somersoft and is a buyer's advocate/agent in Brisbane Qld, who contributes useful and worthwhile information in his posts.Good comment Michael.
You would need to check the various state government websites but in essence that is correct.
Not 100% sure on SA and ACT.
The ATO uses a test called 'is this normal behaviour" to test the validity of actions by some tax payers.
How many people do you know who legitimately build and sell a property every 12 months?
I would go with the accountant and Terry on this one.
Which state?
All (?) states will calculate stamp duty for a house and land purchase on the land price.
OTP purchases are different as most states will calculate stamp duty on the price of the finished product. Victoria is different as they tend to use a land value at the time the contract was signed.
