Forum Replies Created
You haven't divulged the nature of your business – but I suspect some businesses may be more suited than others to use of telemarketing companies.
But having said that, I would endorse Richard's comments wholeheartedly – provide good service to the clients you have & they will refer (cheapest form of advertising on the planet).
IMO there is no point chasing new clients while ignoring the claims and needs to those already on your 'books'
Been away for a week at a live in Incident Management Leadership conference. I moonlight as a bush fire control officer in my 'spare time' .
Caught this article in yesterdays online paper http://www.perthnow.com.au/business/business-old/hunger-miners-chomping-at-the-port-pie/story-e6frg2qu-1226161580458 – it might add to the discussion.
Someone mentioned 'kit homes' – try a http://www.nordichomes.com.au – they claim to be able to put a 4 X $ in Karratha from $330K
I don't know anything about the company, the product etc but the kit home option may be suitable – do your own research and make sure the company does build and deliver cyclone rated properties to the NW.
Jack is not wrong about the infrstructure problems in the NW – getting water to greenfield sites is bloody hard work.
charlitayla wrote:I was looking at buying at Goomeri area, do you think its wise I am a bit worried about been able to rent it out all the time. but i dont have alot of money to spend.Sometimes it's OK to wait, put your head down & tail up and improve your financial situation before investing. Not a sexy comment but it genuinely can work.
Your posts suggest you would need 'certainty' of rental income – a little bit of nervousness is normal but, if you really do need certainty of rental income then ask yourself is proeprty really what you want/need.
Along with rental vacancy rates make sure you also consider borrowing capacity in that postcode. If it is a small community banks may have lending objections to that area which, in turn can harm resale prospects.
Hi Investhut,
The ATO will only allow a deduction if the money is for investment purposes.
As Jamie has said if you took some of the money and used it as deposit money for an investment property then the sum of money becomes deductible.
Now I am not a broker or an accountant but there would be paper trail and security advantages to setting yourself up with a line of credit and use these funds for your deposit. In other words keep the monies separate.
1. Using the numbers you have given above – if the property is valued at $250K you have potential additional borrowings of $200K (80% of property value) less the $1K you already owe. This will give you a line of credit of up to $199K for depoiits etc.
2. You can borrow additional funds and have these secured by another investment property.Now all of this is subject to your capacity to service additional loans. On you income your servcieability will be pretty good.
Your CGT liability will be based on the difference between the value of the property on the day you move out and your eventual sellign price. Any gains made while you were living in the house will be CVGT free. If you do not buy another home the CGT free period can extend for a further 6 years beyond your departure date.
Part of your 'deductibility' problem here has been created by your desire to pay off the loan and then move out. If there is a possibility you will move out of your PPOR you are better off using an offset, rather than redraw, structure so you can use the funds as you want without compromising your deductibility status.
HI Samson,
The guy who did your pre-settlement inspection. That's the guy that needs to be chased up as well.
Boys at Capital 360 won't be impressed with this name change.
Ouch!
I would be getting the work done and also trying to track the 'inspector' down.
If he was licensed he should have professional indemnity insurance (is that something inspectors carry?)
Hmm – so old property with dodgy workmanship?
Suspect the plumber you had out is just 'doing his job' reporting the lack of septic tank.
Shame the first plumber wasn't so professional.
Still recommend you phone HIA and speak with them. In my experience departments are happy to help people if the lines of communication are open. So engage in dialogue with the listed contact and get the process happening.
You may find some work is deemed critical (as in get it done straight away) whereas some of the other work may be deferred for sometime. But certainly start the dialogue and see what you can work out.
It sounds as if you may just have to bite the bullet and pay to get the work done.
Try and find the inspector. Was he qualified? Does he carry professional indemnity? Or was just a local bloke doing the job of an inspector? If the property is in the country side it's possible the guy may be a 'jack of all trades' and master of none.
Hi Alex,
No-one really knows how any area will go in the future – your knowledge of the area will give you some clues.
But as for your existing property.
Normally buying for the long term is the key to wealth. You have now had the property for 5 years so you could reasonably have expected to have received some good profits to date.
When determining if you should sell – ask yourself what will you do with the proceeds and can these be put to better use?
If you sell you have a few options.
1. Sell and use profit to reduce debt on your home. Then re-enter the investment property market with a reduced non-deductible debt level. (Personally – I think there are generally some advantges to this if the profit margin is 'reasonable')
2. Sell the IP and re-invest in another IP – only really suitable if your property is a dog, will remain a dog and never be anything but a dog. (Buying and selling like this does have a lot of waste in CGT, Stamp duty, Agent's fees etc)
3. Sell and use the realised funds in other investments.
4. Retain and keep the properties – head down, tail up and wait for the rewards to come.
5. Seel the IP, use the profits to pay down the mortgage and sit on teh sidelines.Peter Spann says buy for the really long term unless; you get an offer too good to refuse; you need to shoot a dog; or you can put your money somewhere better.
Any decision you make will need to consider CGT, and buying and selling costs.
Have fun.
Hi Simone,
Before you go too much further I would also recommend you speak to a good broker (particularly one who has IPs themselves) – getting finance for developments is not an easy walk in the park, particularly if you are a novice.
Banks are risk averse and there may be some restrictions on what you can and cannot do from a lending perspective.
In terms of negotiation – check the market in the area, do your research and frame your negotiations around solid market evidence. Given the property is on a main road – chances are the buyers will not see a lot of interest anyway. Time and place is on your side.
Hi Ft,
The WA Government has major plans for Port/South Hedland through their Pilbara Cities project. The PC project aims to improve the quality of life for Pilbara residents through the additiona of extra services such as health, education, recreation and so on.
Part of the Pilbara Cities project is to triple the current population in the Pilbara which includes Port/South Hedland by 2035.
Link to PIlbara Development Commission Website http://www.pdc.wa.gov.au/
Link to Dept of Regional Development Website http://rdl.wa.gov.au/royalties/r4rpilbara/Pages/default.aspx
Link to Planning Commission WA Website http://www.planning.wa.gov.au/publications/1135.aspThere are a couple of powerpoint presentations on the pdc site which detail the amount of money being invested in the PIlbara which includes minerals beyond iron ore. It is a commonly held misconception held bymany that the Pilbara is only Iron Ore.
Port/South Hedland are anchored by BHP, Rio Tinto and FMG. All are big companies and major players in world mineral markets.
The land you are referring to is part of a release resulting from the projects mention above and preference is going to owner occupiers over investors. My spies on the ground in Hedland tell me the blocks are creating interest amongst the locals so I am not sure what will be left over.
The same spies also tell me BHP has a preference for Fly In Fly Out workers and there is strong demand for 1 bedroom units in both localities. BHP has already stated in the press that it requires 34,000 extra employees in the PIlbara (Ie not all in Hedland) next year alone.
On top of this BHP require 6000 beds in Hedland over each of the next three years to house their workers with major expansion projects planned to the Hedland port facilities and a commensurate increase in rail operation into the town of Hedland. At the same time there are plans for only 200 additional beds in Hedland at the moment. (when I last checked)
On the basis of this research we are currently doing small scale developments in Port/South Hedland. Entry costs are around $360K and rent returns in the vicinity of $1100/week.
By way of comparison – At the moment small 1 X 1 X 1 apartments are selling in South Hedland for $525K http://www.realestate.com.au/property-apartment-wa-south+hedland-107459196 You'll see the rent is expected to be $1050/week.
Similar property in Port Hedland sells for $700K+ and rents are in the $1300/week range.
Happy to chat if you need additional information.
Hi Samson,
This doesn't sound right – if you don't have a septic the obvious question is where has all the toilet waste gone for 4 years?
Is the issue you don't have a second septic tank or leach drain or………………………………
Phone the HIA contact and get their advise – they will be able to provide you with some assistance.
Based on what you have said here it would appear as if your builder didn't comply with the planning and building requirements. If this is correct the HIA should also be pursuing them.
If the builder is still in business you should be able to track them down and get them onto the case too.
PS I cannot understand how the building was passed fit for habitation without a septic.
It must be late at night – but I cannot see how the 'builder issues' are specifically related to NRAS.
Reading both comments it would appear as these are 'bad builder' matters and not NRAS matters.
As a rule of thumb the attraction with NRAS is the tax cresdit/deduction which is used to market the improved cashflow for such properties. As I have stated on a number of occasions and tax benefits should be seen as supplementary to good property choice and not as the reason for investing.
I have seen some pretty lousy NRAS properties and at the same time I have seen some reasonable offerings.
As an investor you need to really understand how it all works. How are is the $9500 paid? Who manages the property? What leasing fee to they charge? What is the pool of tenants like? How does the local area stack up from an investment point of view? How is the state government 25% contribution paid/earned? Do you intend using PAYG variation for your income tax credits? (When I last looked – you can't). What sort of finance are you looking at? Which bank? What LVR is possible?
Many many questions.
Hi Jamie,
I notice the article didn't really touch on finance issues.
To me OTP finance is one of the greatest 'worries' with OTP and the longer the OTP the more complex it becomes.
Hi MJP,
Nice typo in the subject heading "goof"
JackFlash wrote:The PI market is completely different to just a few years ago. The old buy anything it'll go up days are over. PI now requires actual investing skill.Don't disagree with this comment at all.
Put $360K into a property renting for $1100/week. Comparables currently sell for $525K
Plough all of the rental income into the mortgage and costs – own the property outright in ~10 yrs.
The property will deliver me $57K/annum in rental income and be debt free.
N.B. All figures are today's figures.
Hi Tony,
It is also called the Retirement Standard. Google is onto it. Just make sure you are looking at the latest figures.
http://www.superannuation.asn.au/RS/default.aspx
Gets updated regulalry (quarterly – from memory) and currently states couple need $55K/annum to be comfortable in retirement. Note the standard assumes the home is paid of, something that is becoming less common over time.
Hi Beau,
I tend to keep things simple. Percentages of growth and nett rent return all sound fine but what do they mean in real dollars?
It is the real dollars that will determine whether or not you have achieved your goals. Work out what you need/want in retirement in todays dollars and work towards this target. Don't forget to upgrade your requirements to take inflation into account.
I monitor Westpac's living standards reports to give me a becnhmark and work from there.
One more thing – will the work required consume all (most) of your projected profit?
