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Thanks heaps guys you solved the problem. Its bad news as I can’t claim that 40K, but oh well its the rules. The IP next year is still looking alright.
Thanks again,
Chris
I would like some knowledge on this too.
I posted this a few days ago in another topic in this forum but got no reply
A cheap form of property with a high rental return (alot above interest rates/currently). Ok so they don’t appreicate in value (but you have CF+) but do they depreciate (seeing as we are in financial crisis times)??
I just looked on findacarpark.com.au and I have looked on the sydney maps…
110 sussex street is for sale at $90,000. and under the rent section of the website the same place (110 sussex st) is for rent at $433.35/month which equates to 5200 per year.
This means the return is ~5.8% which is lower than interest rates (currently?). Note this is the first one i looked at, so it might be low?
But is this how it works really… buy the parking space (with borrowed money), collect rent, pay mortgage but still have some rent left over so CF+… don’t worry about capital growth or captial decline cause you have instant CF+??????Chris
Doesn’t anyone want to satisfy my thirst??
Well my long term at the moment seems to be buy property mid next year.. keep for 5 years (interest only) and build up heaps of money in the offset account. The after the 5 years i want to buy a place in the north shore area (~800K), I will have a much higher income. I would either take all the money out of the offset to use as a deposit or i would sell the current property. To have a property after 5 years which might be worth less than what i bought it for and also it costing money for 5 years doesn’t sound very logical at all. I may aswell put my money in the bank and save the deposit that way.
To buy next year would be a big risk, i could lose it.. it might go down.. it will cost me money constantly.
Thanks tony for your continued support in this thread for me. Feel free to comment more if you wish, i will stay posted…
Cheers,
ChrisThanks Tony,
Yes all the asset classes are looking bad at the moment. Shares?going bonkers… property?overpriced, needs alot of stimulus (lower rates, higher FHOG) to keep stable… cash?5% before tax, less after tax, pretty much negative after inflation…
Ok so i’m inclined to not get in now.. after my uni, and phd, when i start earning some good bucks will be around the end of 2013, so 5 years…
Predictions now… what is a good indicator??
– Indicator of interest rates in 5 years? (is it true that 5 year fixed int rates are what the banks think rates will be in 5 years?)
– any other indicators like that?? like a government bond or something which helps to set the interest rates?I’ve noticed that auction clearance rates over the last year in sydney have dropped from the 60s to the 40s, this is not good. I have heard that its good to get in when clearance rates are high and on the up and this is not the case in either point.
I guess I will have to forget the 7K bonus from the government and hope that property does not rise in the next 2 years.
Thanks again Tony, your views have helped heaps..
Cheers,
ChrisThanks Tony for your reply, you helped heaps.
The thing with the government only keeping it till the middle of next year has got me all excited and thinking whether i should jump in.
If Australia is looking to be in tougher times in the middle of next year then the government can either continue the 14K FHOG or ditch it as planned. If they ditch it the first home buyers market will dry up as credit is tightening.
This drop in first home buyers will result in the bottom of the market falling off, will this then flow through to higher priced property?
I agree with you Tony when you said that the government drops interest rates and gives money out… its too save the property market (for now).
If I was going to get into the market then I would live in it for 6 months then rent it out as my partner and i both move back with parents. During the 6 months it would be really hard, im 20 and a full time uni student, i work though (~300pw) and my partner isnt on great money… It would be a struggle.. the 400 per week for the 6 months equates to $10,400. This is the FHOG gone there, but i was justifying it that if the property goes up 5% in the first year then ill break even…. putting my money in the banking ill get a 4-5% return (though 0% real).
The 5% growth being guaranteed would get me in, but im hearing everywhere that we will have drops of 10,20,30 or even 40% (woah!!).
Hmm, if this does occur and I do just sit on my cash in the bank then when im ready to buy the property will be cheaper and I wont have to worry about a low FHOG.
Just to add one more thing… Politicians don’t want to upset people.. if they released lots of extra land then supply would rise and prices would lower…. they add the FHOG in, people are happy… if the government tries to lower the FHOG back down to 7K in mid 2009 then this will upset people wishing to get into the market and also the people owning properties in the lower brackets of the housing market as their properties will drop due to the decreased first home buyers.. Would the government lower it and displease so many people? Hmm, a bit of politics to add to the equation..
thanks Tony.
Cheers,
ChrisA cheap form of property with a high rental return (alot above interest rates/currently). Ok so they don’t appreicate in value (but you have CF+) but do they depreciate (seeing as we are in financial crisis times)??
I just looked on findacarpark.com.au and I have looked on the sydney maps…
110 sussex street is for sale at $90,000. and under the rent section of the website the same place (110 sussex st) is for rent at $433.35/month which equates to 5200 per year.
This means the return is ~5.8% which is lower than interest rates (currently?). Note this is the first one i looked at, so it might be low?
But is this how it works really… buy the parking space (with borrowed money), collect rent, pay mortgage but still have some rent left over so CF+… don’t worry about capital growth or captial decline cause you have instant CF+??????
Chris
Thanks Elka,
I was initially thinking live then rent, but it made more sense, as i would be able to increase my income a bit over the 6 months of it being rented out before living in it. I’ll have to check it out.
20% is the general figure for houses. I know units are always different but what average figure would you put on them?
Chris
How long are these 14K ad 21K FHOGs going to last for?
I’M Not ready to get iNto the Market just yet
But proBaBly deCeMBer NeXt yearChris
Thanks guys,
Scott, I was thinking in bed last night about finishing my undergrad year and then get a research assistant job (I already do work experience in my field so a job is guaranteed), I should be getting about 45K a year at the start of 2010.
My income would be higher and then I might be able to jump into the property market easier.
I could do this for a year (or 2,3,etc) then go back and do the honours and phD with scholarships (which are much easier to get when you have experience in the field).Thanks alot guys,
Chris.Could you buy a house by yourself and then get your partner to pay rent to you and you can then claim the FHOG and negative gearing. Then later they can stop renting and it wont be a IP for CGT purposes???
Cheers,
Chris.Woah, I made this post yesterday, come back today it has grown alot.
Thank you everyone for your help. The partial refund and limited timeframe(under a year) is generally what is floating around in this thread.Thanks guys,
Chris.Hey Wdemirdoner,
I'm in similar position, I'm 19 in my second year of 3 at uni, when i finish uni I should have about 30K saved up, I will be getting my first IP early 2010 in sydney.
Where are you looking at buying? What price range?
Do you have any strategies(or just buy-hold)?I'm looking at buying in the 200K price range(2 bedroom) turn it into 3 bedroom, do a decent reno then i'll either keep as IP or sell and move onto next one(I've also considered a wrap, but I don't think I could do that with my first IP).
Chris.
The education department needs to create a finance course in high schools and make is compulsory in years 7-12, that would sort out the youngins'
What is a quarterly rest?
So I take it that its not the going thing to have daily reducing(is there weekly reducing or something else??).
Chris.
There is many posts regarding purchasing student accomodation as investments on this forum. Try doing a search, a problem that comes up alot is a lack of capital growth.
Cheers,
Chris.Being as bored as I am tonight I have worked out that if you started this $30 a month when your child was born and the interest rate was 6.45 all the time and if you paid tax from this from your own money and not from this fund then on your childs 18th birthday they will have $12,250.87.
Thats pretty cool. A nice headstart and also you will have been teaching your child good saving habits. Throughout this childs early life they would have been shown how to save and may have added to this account as they went.
Chris.
PaulDobson wrote:We use positive cashflow properties to support our higher capital growth, negatively geared properties. More specifically, we use Vendor Finance as our positive cashflow technique and utilise this cashflow to build wealth in our buy and holds. Good luck.Thats the strategy i'm looking at getting into. Using wraps to get positive cashflow to offset the negative cashflow properties that will be growing me my wealth. Then when those negative cashflows turn into positive I will have lots of positive cashflow and will be set.
Chris.
Thanks Trakka.
Also Trance you might be able to do a quick reno on your current property. It would help to build equity and also provide you with extra cash if you refinance.
Chris.
trakka wrote:Yes, that's what I meant, Trance. What LVR did you borrow? If you put in 6%, that would mean you borrowed 94% to buy the first property.What about Closing costs, I hear the average is 5% of the purchase price, so by these calculations your LVR should be 99, not 94, right???
Also, if you tkae out a 100-106% loan the interest will be higher in percentage form but what happens if you pay off part of the loan and the property goes up and your LVR goes from like 100 down to 80. Can you then go to the bank and say "hey i'm not such a big risk now, how about dropping me back down to the lower interest rate??" Would they do that??
Chris.
