Forum Replies Created
Reverting to earlier in the topic, rent returns are often quoted as a reason for real estate prices to fall.
This may not be the case in the continuing low interest rate regime we now live in.
Rent returns of 6% net which applied ten years ago were achieved in in a much higher interest rate environment.
Now you can get about 5.5% at call, not 8%. So rents return about 3,5 to 4% net now. Investors have to become used to the lower rates simply because nothing much is available that is significantly higher.
Median is almost useless in the real estate world. The problem is with sampling, where sample self-selection is common.
i.e. “The median for properties in post code (xxxx) has fallen 40% in the last quarter” is laughable if it wasn’t so sad for those that believe such a statement has any statistical meaning.
If ever there was a business opportunity in Australia it is for a high quality property management business. At present you get the young girl with no experience or “Gina-hard-faced-bitch” types. Neither are ideal and the agency itself just wants your listing because that’s how Real Estate Agencies are valued for asset purposes.
Pretty poor all round.
Not, however, including your primary place of residence.
I have a letter from Centrelink which states that Council Rates Notices are the documents of proof of ownership and value of a property. They will step out of that method only if they suspect dodgy goings-on.
Centrelink decisions are subject to appeal.
If WA is anything like the rest of Oz, the local government must advertise its intention for any rezoning, whether intnded for strategic planning reasons or as a result of a request from an owner of the land.
Then all and sundry can object, but not on any old grounds, befor a decision is made. Check local papers, municipal office and their internet site. It’s usually all there.
Sure!
Any summer activities will fizzle out if ski seasons shorten. It is only the winter income that pays for anyone to be operating in summer. Ski businesses are scratching to make decent returns in Australia now and in Victoria at least it is State Government policy that skiing will be much less viable by 2020, only 15 years hence.
Look at prices for winter holidays now and you will see that already North America and other overseas destinations are better value because they cost the same or little more, but have far better snow. If the local industry was to increase prices by much at all it will go belly up.
Don’t be fooled by the hype surrounding alpine ownership changes and big money coming in to increase development. The Alps have a history of being the subject of “Pump-and-Dump” exercises where property is built and heavily marketed to new investors. The developers then move out and the new buyers are left with overpriced assets which take years to make any returns.
There have been a string of “good” seasons lately which has created a bit of an alpine bubble. Climte change and possible interest rate hikes make it very risky.
I have been advised by a real estate contact of mine who has sold in Frankston for 20 years, “Confine your purchases to south of Cranbourne Road”.
This guy tried to make me rich by offering a parcel of land for $180k which sold for $450k 18 months later, I dithered and missed out.So I listen to what he says.Where I operate the local authorities are approving stuff you’d never have got through years ago. I’m talking backyards with second dwellings where the ONLY vehicle access is by means of the old narrow lane separating the blocks, with only a footpath leading to the street!
This is in a designated growth centre.
There is a nationwide shortage of statutory planners and many of those doing the job are just out of college. RESCODE, which we have in Melbourne is wide open to interpretation, so, it all takes a long time.
All in all, a great deal of delay and uncertainty.
Whoooaaah back a bit. People are certainly not leaving every country town in droves! In fact, as any planner will tell you, country town dwellers move less frequently than urban folk.
Select country towns are doing really well at the moment, depends on their “point-of-difference”. As with locations, the secondary and the compromised will retreat a bit but long-term the bush has a great future.
christobel, the one piece of advise I would give to anybody in property is “Never believe an Estate Agent when they talk about the market”. Remember, they have one aim, turnover, and it doesn’t matter a hoot if the market is rising or falling to them.
Why not develop yor own methods for working out which way the market is really heading. No-one will tell you, but there are ways:
1 Get on an email advisory service and specify a narrow band of property. Then watch the emails come in and see the trends yourself. It’s only asking prices, but if you stay consistent it’s a good guide.
2.Sample your area of interest to see what percent of “For Sale” boards have a “Sold” sticker on them. Where I operate, above 60 % is a positive market and around 20% is a slow market.
These are called “primary data”, where you collect it yourself and no-one elses bias is introduced. There’s lots of other ways of keeping informed but I’m not giving them away here.
Slightly longer:
The way we do developments is to look for adding value. We’re not into renting after developing nor do we expect much capital gain.
We look for properties where an existing dwelling is do-uppable and there’s room for a second. We get dev. permits for 2nd dwelling and sub-divide into two lots then build the second.
We use pro planners whose office is close to council offices and assume they all drink together and know each others business. They tell us if it’s a goer before we buy.
For some reason you can buy a reno with room for the second for about 200k to 285k. 25k does up the first, 15k for permits etc and 100k will put up a modern 2 b’room unit.
Outlay, say, $390k. Sell for about $500k the lot. The properties are not selling at their realisable value, but much less sometimes. The real money comes when you get a cheapie that needs a little teasing out to work, structurally that is.
And you can do a bit of work yourself on the reno front while the 2nd one is put up by the pros.Because of Melbourne 2030, councils are very co-operative with all this, two lots of <350m2 is not uncommon.
An unfashionable short post next.
As just a citizen you will be doing PAYE tax returns: not a professional developer.
Maybe a partnership next, doing a property or two but mostly income from personal services/contracts. Not yet.
Then one day the Tax Office says, hey, you are earning most of your money out of property development. Then you are a developer, probably needing a compny set-up and a good accountant. If you have been honest to that point, tax won’t be much more.
Valuers who write about these things say this:
There is a long-term push to move to the coast, it has years to go. But well located inner city (up to 8km radius) will do well too. Places that those who can’t afford coastal retreats go to will also do well. The zone to suffer in a couple of years or so are the broad swathes of middle suburbs.
This is based on demographic trends but major monetary shocks of one sort or another can overlay all this.
When I thought about commercial. a very reputable commercial agent told me to only invest when I could afford property with National tenants. I’ve got freinds with small commercial and they are always looking for a tenant and have loooong vacancy periods. It’s because of the specialised layout and fittings not having a generic appeal, unlike a house or apartment.
Why not keep doing the duplex thing, I believe it’s a better bet than low cost rural, it’s low cost for a reason.
This is VERY dangerous ground. The problem is exchange rates, which you have no control over. Japanese culture is very “follow the leader” and once climate change enters the consciousness there will be a run from anything to do with snow.
I would even get out of Australian alpine property if you have any; the latest poll out today of Australian opinions rated climate change as a serious worry.
There are those who speak of making snow to counteract warming trends but no cheap methods are known. Alpine resorts in some parts of the world already hide the fact that they have snowmking, thus avoiding having to admit that they are marginal. Higher altitudes in Austria are reserved for locals, such is the expectation there.
With so much good investment propert around, even O/S, and given you say you have some alpine already, why on earth would you want more: for heavens sake, diversify!
aussierogue, you just beat me to it; it’ definately sentiment at the moment. For someone like me, who was investing in property in the 70’s when interest was 11 to 14%, and even 18% in the 80’S, this is about to become the buying opportunity of all time!
Seems to me then that it is getting close to “BUY” time.
Systems vary state to state etc. In Victoria a second dwelling is allowed in some Res 1 Zones, look at the planning scheme maps to find out. The Overlays are the critical documents.
The you have Rescode and requirements for outside living space, sunlight etc.
You apply for a Development Permit and if you get it you can build a second dwelling on site, or demolish and build two.
At that stage it is still ONE property and can only be sold as a whole.
You also need to subdivide, either strata or separate freehold titles. Another Permit is needed.
You’d be mad to do it without a professional and all up a simple second dwelling/sub-divide costs about $15,000 and about a year to do.
