Forum Replies Created
The reason for the property hikes is multifactorial, including less land available and up to 1/3 of the cost is: GST, stamp duty, tax on tax etc., council fees.
Guess who really has their snout in the through and is not likely to let go, because prop-eprty is a huge cash cow! Yes state, federal and local governments.
There are articles in the week end FIN and Age.
The whole tax system is unwieldly, complex and is impossing more and more burdens on your average citizen.Please refer to previous discussion on this, to which I contributed.
Its a fantastic product in terms of flexibility.
Ours is used 95% of the time for inivestment.
We have a separate business account we mainly draw wages from, for our usual cost of living expenses.There is a lot of talk on assett protection.
There is also a lot of fear of loosing assetts.
We hold our assettts in personal names (home)and trusts.
I mean, how real is this threat, are there any statistics on this issue. If the risk is 1 per million or even less, you almost have a better chance of winning tatts lotto.
It seems to me somewhat over rated.
Unless you are really in a high risk group, either your business or profession, then it may be very worthwhile, but if you are an average person?
I know s… can happen but was is the likely chance? You take out pers. liability cover for property, your business and profession.
To be at risk og loosing your assetts, you would have to be very unfortunate.What is the old saying, “A fool and his/her money are soon parted”.
Has anything changed?
It continues to astound me that people are:
still forking out to HK courses.
Are still forking out to buy into high rise apartments, for investment reasons.
Yes, lets find someone, anyone to blame, as long as it is not yourself.
Are you telling me I should do my own research?, read this web page?do some reading?
Who is this Jan sommers anyway?
This all sounds just too hard, HK must have the answers, and he has this fantastic well oiled machine behind him, he is wealthy himself. He must know what he is talking about. I think I would much rather be spoon fed then have to do all this hard work and my own research, my brain cells just don’t work that way.Don’t you also love the media, HK in the spotlight and now the whole property market is in a free fall down. Well, it always pays to add the extra drama factor.
Aren’t we a naive and unsceptical and accepting lot of people, exception of course you good folks on the forum!We have agreed on 2.5% commission for the sale of a block of land, usually 3%, on the understanding he will get other listings from us.
He tells me the market in the outer east is a little flat at the present.The bank will value your home and usually you can loan up to 80% of the value of your home and set it up as a line of credit.
Cross-collaterise means, the bank holds multiple securities over say one property, this makes it difficult if you want to sell or refinance, it complicates everything, so its one property, one title and one security per property.
I run all my trusts, my investment company and personal items out of the line of credit, its that flexible!
It saves having multiple accounts and constantly switching money.
The only accounts I hold separately is my husbands business account and our super a/c, I have a separate credit card for the properties, to track it more easily.
you really need to set yourself up with good software such as quick books, to keep good track of the accounting (ie money trail). You can put everything in a separate class, so it will come up as a separate item on the book-keeping.My home line of credit with CBA is the best thing since sliced bread!
I have used it again and again and increased my home valuation to borrow more.
Yes, of course the bank holds the title and the title of all other properties that you buy.
A 20% deposit is usually required to buy an invest. property and I find is a good buffer.
The line of credit is extremely flexible, put all income in, incl rentals and have all loan payments taken out of it.
Don’t cross-collaterise the properties and should not be necessary with 20% dep.
I don’t fully draw on the line of credit, wanting to leave a buffer and within my comfort zone.
We plan to sell off one of our dual occ. properties as soon as council approval comes through, maybe renovate the house, depends on possible return.
This will free up most of the line of credit and off we go again!
Make sure you use the line of credit for invest and not expensive holidays/cars etc.
In fact that is one of the requests by the bank, that it be used for investment.
If the line of credit is fullt used for invest, interest rates can be apportioned to the various properties.As i understand, the main reason you place something into a trust is for assett protection, eg if you are a professional or at high risk of litigation.
If this property is neg geared, you will loose the personal tax benefit of this and have to pay significant stamp duty to place it into another entity, you would have to think about that carefully.
The other option is to keep the property fully mortgaged, so the bank owns most of it anyway, if you are concerned about litigation.
Selling the first properpty, you will have to pay CGT.
Could you wrap the property to your child?coongratulations Westan, that’s fantastic!
Yes, slow down and relax for a while, don’t overcommit ypurself, free up the cash first.
The next deal is always around the corner, remember that cash flow is needed to service alll those ideas/loans.
I have gone over the top at times and all that happens is stress and anxiety, wealth creation does not necessarily happen more quickly.Agree totally re suburban sprawl, look at the lovely villages in Germany, big community feel, and to me very smart housing.
Look at the ugliness and mismanagement of town planning on the gold-coast, with those disgusting expensive, “luxury” square box houses on the waterways!
the canals have very little fresh water circulation, a haven for all sorts of mossies and other bugs, who ever designed those?
A poor legacy forever.
Look at the old large blocks in any surrounding suburb of Melb. Whats in them?Weeds, horrible old sheds abd rubbish.
I should know, I’ve removed bin fulls of rubbish from some of them.
Unfortunately, in the old days, land was plentiful and therefore wasted.
What do people do with their back yard? Nothing! All my neighbours have ovewegrown backyards and one clothesline. I think its called land for wildlife, or some such excuse.
The ageing of the population will only make it worse.
Like water, townplanners and councils need to wake up to the fact that land and parks are a precious commodity.I happen to be a baby boomer, I think the last answer is too simplistic.
Its not a question of being “hooked” on the product.
!. most properties are negatively geared.
2. Most “invest” seminars are pitched at neg.gearing.
3. Most pos.geared properties are not in the “comfort” zone of areas that people are familiar with.
4. They don’t understand pos/neg gearing.
5. New developements come “packaged” and pitched at investors, they don’t have to think too much or look too far.
This doesn’t explain why city high rises are still being brought “en masse”.I have just brought a property at canoungra.
The building inspection was done by Warren Stevens, Coastwide
0407 644 568, 1300 137 414.
He apparently does an excellent job and I will check, but the card says, he also does depreciation schedules.
You also need to do a pest inspection.
Best wishes.
I think he will check the slope, mine has a little slope to the back , but not serious.Doing similar for just one 6 year old, extremely well-maintained property on the gold coast (30 k inland), in a strong rental demand area.
the gold coast is going through a huge upswing and growth phase, so at 250,000, we thought it was a good price.
we have brought this one in our names, we are hoping to eventually live there for a little while.
We do plan to get a whopping depreciation schedule and reduce our taxable income.
How ever, our other properties are cash pos or sudiv. potential, wouldn’t want too many cash flow neg.properties.Yes, we are feeling a little anxious at times.
My strategy is the land componenent to the property and being cash flow positive and having the 20% deposit buffer and sticking to the low median price range in a well established area.
Also, having a rent that’s affordable and a well maintained property, so far so good.
We also live modestly and use every bit of spare money to reduce our home equity mortgage.
In terms of ranting and raving about property, which I am absolutely passionate about, I have to admit that I have a tendency to do this.
That’s why this site is so great! You can rant and rave to the converted and have a chance of being understood.
Yes, I am a property-aholic!
I cannot see any other way of avoiding the pension trap, retired couples receive the princely sum of 16,000 per year, from the government. Every dollar of income that we can get above pension level will be wonderful to us and more financialfreedom.
I’ve tried share trading and was one of the 90% of losers.
I’ve tried buying shares, but only have to look at it and it goes down.
Often, talking to people I just get blank looks and realise, I shouldn’t be saying so much about my property passion. Others admit, they should be doing something like this, but don’t take it any further.
My mother tells me I am lecturing people, and I guess you have to be careful to not be seen as a defacto financial adviser and get too carried away, so I am trying to keep things toned down.
I wish I had known someone when we first started to look at property and given me some informal advise, it might have helped avoid mistakes.
There are really very few people around you that you can talk to freely about your properties and what you are doing.reading with interest as thinking of doing just that, selling our beautiful home and freeing up 300,000 for multiple deposits.
We have a lot of money in our home and potential for being sued, as professionals.
so far, just about all of our investments are in trust.
We have never rented in the past, always living in our own accom., but one benefit of renting: it is very cheap and competitive at present, as per above 100% of money is freed up and you can buy invest.property in trusts and some protection.
Another consideration for us, is, our home is rather large as is the garden, so we are very bound to it, and getting older and less energetic.
We would prefer to free up time and focus our energy on investing, renovating and making money to retire on.we buy subdivision potential properties, potential for great cap gain in one or two years, but it also takes a lot of effort to source them and go through the procedures.
We have 2 cash pos. properties, approx 8%.Interesting reading, I am glad we sold our apartments, townhouses in maribyrnong when we did.
So far so good with our rental properties, but pitched at the 200-230 range, outer east.
A huge note of caution here!
The upper middle end of the market is saturated.
All the more reason to pitch at the lower end of the market, where there is huge demand for cheap affordable accomodation.
I think the lack of rental demand will start to have significant impact on new developement, resale and investment.
We are subdividing our large blocks of land and will probably slowly start to offload those properties, once the cap gain is made.
I believe rental demand is still high in Qld, but may start to head the vic/nsw way, as investors start pouring in from the south.
there will not be many good pockets left.I basically try and avoid anything “serviced”, like the plaque, be it aged care, students or holiday.
Reasons:
1. our very first investment on Magn. Isl., serviced hotel unit lost us 100,000, and we are still payiing for it.
2. Any capital gain will be linked to the rental increase or income generated and nothing else.
3. These “serviced” units all have managers in place, extra cost to you.
The running of the institution depends entirely on the management, good or otherwise.
4. You have absolutely no control over the investment.
5. Resale may be almost impossible, you will only be able to sell to other investors.
6. Financial institutions are reluctant to loan against this sort of product.On a psitive note, this one offers a steady return, entry into the market, it is an assett and fulfills a fantastic social niche.
I believe Bruce does have a point, I do not wish to add to the single mum argument etc.
I know of one single mum who brought up 8 kids, educated them in private schools and ran a business!
Property is pricing itself out of the market for a huge number of low- average income families. the boom is fuelled by baby boomers and low interest rates.I keep saying, try to stick to an average price range housing that most people can afford to still rent or buy.
I also heard the statistics, that in any one year, one in 3 people require social security assistance!
I am also unclear about the future of cap.gain in tasmania (I think no to minimal population growth)or many country areas.
Prices depend on demand, land availability and population growth.
It may be that more and more people will move outwards as affordabilitiy of housing declines in the cities,this applies to retirees, those on low income or those on DSS.
Another statistic: public housing waiting lists number hundreds of thousands, those on the list are facing a wait of at least four years.
If you can solve the housing crisis for the underprivileged and still make some money out of it, the government will love you and support you!
