Forum Replies Created
http://www.gumtree.com.au/
change state with option to change right hand top side of web page.
Go to property for sale719 m2 house I reckon $320,000 – $340,000
1042m2 house I reckon $370,000 – $400,000
This is my guess
Medium house price is 299,000 however you have more land than average properties in the area.
May get high end of price range if it has a garage and Brick Veneer.You could ask for a free appraisal from local real estate agents also
If you have council valuation on rates notice you could go by this to get an idea also.a new service has evolved called a vendor advocate or sellers advocate
see as an example the following (not a recommendation !)
http://www.sellersolutions.com.au/content/about-us/
http://www.realestateangel.com.au/vendor-advocate.htm
http://www.realestatebuyer.com.au/_admin/userfiles/Introduction%20to%20Seller%20Advocacy.pdf
http://www.synergybsm.com.au/sell/why-use-a-sellers-advocate.htmHow have I done this guess
I have looked at 3 br houses in the area.
http://www.realestate.com.au/property-house-vic-deer+park-106347995
http://www.realestate.com.au/property-house-vic-deer+park-106240238
http://www.realestate.com.au/property-house-vic-deer+park-106151706
http://www.realestate.com.au/property-house-vic-deer+park-106356145
http://www.realestate.com.au/property-house-vic-deer+park-106412317
http://www.realestate.com.au/property-house-vic-deer+park-106429165
http://www.realestate.com.au/property-house-vic-deer+park-106429228
http://www.realestate.com.au/property-house-vic-deer+park-106477747
http://www.realestate.com.au/property-house-vic-deer+park-106481926
http://www.realestate.com.au/property-house-vic-deer+park-105874414
http://www.realestate.com.au/property-house-vic-deer+park-106496725
http://www.realestate.com.au/property-house-vic-deer+park-106364830Hopefully you are going to stage the properties. (this means have furniture in the houses when buyers look at it)
Thinking outside the box here.
Has the house got a big backyard that you could sub divide and sell off instead.http://www.infochoice.com.au/calculators/stamp-duty-calculator/
You can find out how it is calculated by visiting your State revenue office web site
I do not know what state you are in but vic is http://www.sro.vic.gov.au/sro/SROnav.nsf/childdocs/-34FAD0EFBAFF8BE0CA2575A100442101-E35A67FBAB847FF1CA2575D10080A69F-1F4F15D2B7E31144CA2576EE007AFC77-79D592C55BA68039CA2576EE007FECB3?openLegal fees and loan establishment fees,
Learn as much as you can about property investing
I am going to attend this seminar listed in the link below in Melbourne 1/5/10 even though I have a lot of knowledge I never stop learning.
http://www.jenniebrown.com.au/
You can buy books also as a cheaper option
http://www.businessmall.com.au
Don't be embarrassed as it is easy to spend money on stuff that devalues over time.step 1
get a joint venture agreement from a commercial lawyer drawn up
step 2
ask bank how much deposit needed for loan
step3
google stamp duty calculator
with from au selected
and work out how much stamp duty you are going to have to pay
step 4
Are you going to pay mortgage insurance
google mortgage insurance calculator
with from au selectedYou may wish to set up a trust to buy the property in. Check with advisors on this point also.
This is a double entry in the forum
https://www.propertyinvesting.com/forums/property-investing/help-needed/4331909
I have seen one valuer that had an amazing database that would have been updated with the recent sales prices for the whole suburb. A laptop with internet connection wireless instantly updated with recent figures.
No income
I've never bought land on its own either.
I have a friend who has purchased a block of land in a hilly area and he has done nicely from capital gain but he couldn't use negative gearing and he really struggled to pay back his debt.
There is the counter argument that there is no repairs, insurance and tenants to deal with.If you could get someone to put some animals on it for agistment you may be able to earn an income on it.
Josie_13 wrote:HI,Im new here and thought i'd post a question.
I own a (negatively geared ) investment property which has been rented out for 3 years.If i sold it as is today the capital gains made are minimal — around $50,000 -$100,000 before tax. I know if it was sold today I can use the discount method for calculating capital gains.The house is in an old fibro shack and I know that if i knocked it down and built a brand new home
This $400,000 capital gain do you increase your cost base by the cost of building a brand new home when working out the capital gain?
Josie_13 wrote:and then sold, my capital gains would be of the order $400,000. I understand that if I do rebuild for the purpose of selling straight away the, sale is no longer capital in nature, since it is a money making excercise and and any gains become assessible income and i will pay full income tax (i.e. no discount method for calculating gains).I am sorry but I do not know the answer to that question.
Josie_13 wrote:I know that if i rebuilt and then rented for a further 12months, then after 12 months I could then use the discount method once more to calculate the gain. However I would rather not hold onto the property for that long .I was thinking though, that i could move into the new house for a minimal amount of time – like 2 months – and then sell. so i would get a partial capital gains exemption for the time i lived there,
The point here is partial exemption. You can get a partial exemption for 2 months of the capital gain over three plus years..
That is 2/38 X capital gain is exempt and 36/38 x capital gain is taxable.
You most likely will find the gain over 3 years will come from the land value rather than from the building as the cost base will increase for the building construction costs.Josie_13 wrote:and I would still be able to use the discount method for the remainder of the gain. But this seems too good to be true — ANd im sure its not that easy to get out of a huge tax bill. ????Also, It will take roughly 9 months to build and i will be paying bank interest on the property and construction costs. How do i treat these interest expenses?
You would add the interest incurred during the construction onto the cost base however you can only claim one way at a time.
So if you receive rent then it is an expense against rental income
If you do not receive rent and cannot it is an expense incurred while increasing the capital value.There are about five elements to cost base it would fit into one of these elements.
http://www.ato.gov.au/individuals/content.asp?doc=/content/36557.htm&page=2&H2
Third element costs for loans used to finance capital expenditure you incur to increase an asset’s valueYou may find a quantity surveyor may be useful in working out what you can depreciate.
You are paying $400 more a month than is required
so my question is are you likely to be renting out the place for more than 12 months and are you planning on buying more investment properties later down the track ?
If yes you may find an offset account better as it gives you flexibility later if you need cash for a deposit on another property.
Also – if the rent just covers the mortgage you will have negative gearing due to the expenses also being claimable.
Things like council rates, landlords insurance, water rates and interest charges are claimable.
So total income = rental income – (council rates +landlords insurance + water rates +mortgage insurance + depreciation)
so this will most likely equal a negative number
(which reduces taxable income giving you a small refund at tax return time)
Also you may wish to nominate this PPOR to be your PPOR even though you are renting it out for up to six years to avoid any future capital gains tax. You just can't claim PPOR exemption on two properties at the same time.The paving and new carpet would be an improvement most likely and only depreciation could be claimed on them.
D
Makes me shudder to remember that young Australians fought and a lot made the ultimate sacrifice
and then l70 years later Krudd could sell off Australia to overseas people.I agree with Richard !
Because you have started at such a young age you have time on your side.
Set up an offset account on an interest only mortgage.Here is why
An offset account gives you flexibility and reduces the interest charged. So down the track you may have saved say $40,000 in the offset account and then you can use it as a deposit for the next investment property.Its really about that the value of your property will grow and compound over time while the loan stays the same.
years Loan property value growth 7%
1 $395,000 $360,000 25,200
2 $395,000 $385,200 26,964
3 $395,000 $412,164 28,851
4 $395,000 $441,015 30,,871
5 $395,000 $471,886 33,032
10 $395,000 $661,845 46,329
15 $395,000 $928,272 64,979
20 $395,000 $1,301,950 91,136
Now you will not get such an even growth but over twenty years it will average out at 7% p/aYou are at the mercy of the economy with commercial.
My parents had a mix with owning a shop and a residential in the one property. When the bank pulled out of the country town it was in, the tenant also left and the next tenant struggled to pay the rent.
Retail Property is hard as I have seen a lot of empty small shops with for lease on them.
Retail shops you have to ride the tenant's business success or failure.
Not sure on Warehouses or self storage places they may be different.You may be able to get the loan from a non-bank lender that doesn't use Mortgage insurers !!
it may cost more for the interest rate but you can always refinance when LVR is better.
http://www.myrate.com.au/loan_products/our_loans
http://www.pepperhomeloans.com.au/borrower_overview.asp
http://www.mortgage.net.au/category/home-loans/
Some of these lenders lend also to bad conduct mortgage holders as wellanother option usually not recommended is to cross secure more than one property with the new property.
So LVR was at 83%
With a cross secured laon bank may go to a total loan to Value ratio of 95%
across several properties and still be acceptable.As a loc loan is 80% LVR but a cross secured might be 95% LVR
It is risky as you can lose more than one property if you can't pay the loans or get behind but it might get you out of your problem.onthelinks wrote:I'm relatively new to the investing game and own an investment property in NZ which is negative geared so that it is currently reducing my weekly tax payments from my salary to 6% (here im Sydney).I'm looking to purchase another property and have two options
1. another investment property, i'm looking in Lakemba, median price for a 2 bedder is $210k and that area has a very high rental yield around the $280 per week. This is the closest positively geared property/area I can find in Sydney, which would allow me to then duplicate 2 or 3 more times.2. i current rent a house so my other option is to purchase a more expensive property (circa $1mil) which would would tie me up financially and restrict me from doing anything else, however the capital gains in the long term seem appealing (and the ability to have mine and my flatmates rent go towards my mortgage instead of someone elses).
So I have a few questions
– Should I continue to rent and purchase more investment properties?If you rent you do not have to pay the maintenance/ repair costs , Council Rates, Building Insurance, and Water Rates except maybe the excess usage part.
If you Buy a $1 million dollar place you have to find the interest payments and possible a small principal payment which would kill cash flow and is not going to be tax deductible in any way.
If you lost your job you could have the owner occupied property sold from under you to cover the mortgage.
onthelinks wrote:– What gain is there for me once I have more negatively geared properties once it reduces my tax to 0%? Is this the point where being negatively geared ceases to be profitable?Yes there is a few points .
$80,001 to $180,000 you get 40c back for every $1 you lose. So you are losing 60c
$34001 to $80,000 you get 30c back for every $1 you lose. So you are losing 70c
$6,000 to 34,000 you get back 15c for every $1 you lose . so you are losing 85c
When you get your assessable income lower than $6000 as a resident tax payer you get Zero back.
If you think 15c back is a good deal then it is the $6000 point other wise it is below 34,001 when tax return is not so good.
The word profitable doesn't relate to the new tax scales as shown above.
The idea with negative gearing is to have a short term loss so that eventually the investment makes a profit.
However depreciation can make the loss sustained merely a paper loss rather than a cash flow loss of money.
Especially if building write off can be utilised but it reduces cost base making CGT higher if sold.onthelinks wrote:– How do I grow a property portfolio if properties are negatively geared? I'm then limited by my salary how much I can afford to contibute each week.Spot on !!
Negative gearing limits you !!
If you have time on your side hopefully the value of the property grows and the amount of rent increases and helps pay off the loan. So if you wait say 5 years hopefully a say $400,000 property would grow to (400,000*(1.07^5) = $560,000
Now the loan might be still $400,000 but the property is $560,000
So 560,000 * 80% LVR = $448,000 so you could draw down on the increased equity to 80% LVR being $48,000 to use as a deposit for the next property. Also if you can pay down the loan you also increase the equity more and be able to borrow more.There is another method not recommended where two properties are used as security and the LVR goes to like 95%
But you risk losing both properties if you get into trouble with paying off loans.
so say / ($400,000) existing mortgage plus $400,000 for new loan / $448,000 + 400,000 (for next property) x 100
So 800,000/848,000 * 100 = 94.3% LVR
Did this one myself over 4 years made $70,000 capital gain. Return really depends on property market conditions !Positive gearing doesn't limit you !
But you can reach a borrowing ceiling when you get to 1 million due to mortgage insurersOther methods available but risk is higher !!.
Active investment
http://en.wikipedia.org/wiki/Property_development
http://en.wikipedia.org/wiki/Subdivision_%28land%29or
http://en.wikipedia.org/wiki/Covered_call
Risk here is share price falls in value however a put option will limit the loss.I am currently going to a Jennie Brown investment seminar that will teach me other methods also.
Sometimes you have to think outside the box.
Yes
assuming you sub divided land the original half with the PPOR CGT exempt as main dwelling
However the other new sub divided land has a cost base of 1/2 the original land value when you purchased it.
and no longer is exempt from CGT
http://www.ato.gov.au/corporate/content.asp?doc=/Content/00150720.htmGST would also be involved for the new building if sold.
This might be what you are thinking about
http://www.architectureanddesign.com.au/article/Heritage-funding-program-opened-by-government/515950.aspx
Closes 31 may 2010 and under Peter Garrett's Minister for environment protection.You need to work backwards
Final expected sales price of finished development – total development costs – purchase price = expected profit
So cost of development application, Cost of demolishing old house, Cost of putting in services, Cost of building two properties, cost of landscaping, cost of finance while project being done (interest)
You need to know the costs to work out if feasible purchase and what price you can afford to buy it at and still make a profit.
Bank will want to know this also.
