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hey there,
given i borrowed 110% , holding costs (after tax return) is about 7 to 8k per year depending on rates, bills. I do however have a LOC paying the interest on all IP loans so effectively turning my non deductable home loan debt into deductable debt by "keeping" all the rent rather than using it to pay the holding costs. So obviously the negative gearing is increasing with this set up, not decreasing.
thanks Nigel…. yes in hindsight i will always take inner city over fringe… i do have an IP in inner brisbane..a. woolloongabba house,,, its performing better than scaborugh, but I have had it longer (2004) as its good performance was in the first 4 to 5 years, since then its been up and down so pretty flat since 2008….i am considering flicking both properties and increasing my holdings in Sydneys inner west, where i live. seems to be an ongoing rock solid market. The average vacancy rates in brisbane is perhaps quite telling of the current market.. this would need to tighten considerably for rents to increase and investors and then homeowners to come back in… just me two cents.. maybe in the pipeline ? who knows…obviously i would be happier if i can hold with some optimism
high pop growth doesnt equal high cap growth, if it did then every new subdivision would be an investors dream, IMO the opposite is true in this comparison of outer suburbia versus inner city for cap growth. its a no brainer for so many reasons I dont have time rabbit on about.
ps.
dont get hung up on capital growth statistics, they are at best unreliable… it only takes 1 mega sale (expensive house) to skew the average for the month, quarter, or even year particulary in suburbs tightly held. It also depends on even which day the measured cycle of growth starts and finishes and whos measured it, residex, APM, blah blah….markets are much more complex and can fluctuate up and down much more than stats can measure. Ie if yo buy the week after a interest rate rise you may find another micro climate of price fluctuations the stats might not pick up over a longer term of a quarter, month etc.
joel,
I own property in the inner west where I have lived for over a decade and as a keen investor I know the market pretty well here.
As with all investing is about supply demand, changing demographics, gentrification, new infra structure and proximity to services.Where and what you buy depends on your strategy budget and end goal. Focusing on capital growth is good but there a lemons in the best streets in the best suburbs. That said for cap growth the inner wset is a good place to start. If I was buying again here Id be looking at something I can add value to. If a unit I would look at an older style unit in average condition and adding equity and increasing yield by minor cosmetic renos. Suburbs I think are good long term would be Marrickville, Dulwich Hill, Summer Hill. The reason for this is these suburbs have some large scale genetrication of old industrial land soon to be developed into up market residential and mixed use development, a soon to be completed light rail line with city access, a continuing changing demographic of more young professional moving in, proximity to good schools, heavy rail, cafes etc.. As for St peters, it may be close to Newtown which is good but there is no real centre/village in St peters and it suffers from alot of aircraft noise and is generally more run down than the suburbs above.. Marrickville is not really further out, it may seem that way due to the rail corridor but in a straight line from the CBD is pretty equal to St peters but with alot more going for it. Bedsides all the things mentioned above the key to seeing growth hear is the type of people calling marrickville home. You will find under the surface a lot of artists, window galleries, underground and avanteguard venues, design studios, fashion and rag trade businesses, alternative co ops, etc etc…. If you follow history of rags to riches suburbs you will find that the art and or alternative community are the first to adopt an up and coming area. then the cafes and trendy shops follow, then followed by creative and other professionals moving in to renovate the old houses, and eventually you have the new hip suburb.
further to jazamites comment dont forget many well heeled expats coming home on big salaries buying high end property skewing avarage prices across these areas in total, these areas are not expensive relative to similar property in similar locations worldwide.
plaster is cheaper and a better finish for inside, smoother etc, cant make comment about if it adds value or not as it depends on the type of house/architecture.
For example people who painted the outside of federation brick homes, exposed the brciks in old terraces,rendered there 50s bungalows, stuck sun rooms on there terrace balconies, paved 70 bricks over there porches, all in the name of fashion of the day seriously devalued there homes.
Just something to consider.
i am probably missing something but if you own a 200k property for 10yrs say and there is no growth but all your interest and expenses are paid by rent dont you still have the same 2ook property and a loan for the amount you started 10 yrs ago. Then add buy sell /costs etc and that eats a big hole in your say 50 bucks a week you have left over with your PCF property.
hi,
Timber house might cost you $1000yr but how long is a peice of string really, I have a few timber QLDers, but most expenses are tennant related not maintanence and some years there are no maintanence costs.
Prices are soft in the inner areas from my observations right now . try inner south
450k for inner is a stretch but not impossible for 2 beds on a small block . In general you will get a better growth investment with a QLDer than a townhouse for obvious reasons such as;
limited supply
scarcity value
little depreciation on building
more land (core value for city property).
easy to add value, lick of paint, garden tidy up etc
character home, classic architectural style,
generally surrounded by other inner properties being restored therefore adding value and desirablity offertime to the whole area, highly desirable home type, which will increase overtime,
no oversupply issues.My qlders are pretty basic, with minor 80s 90s renos but they have been excellent performers as far as growth which I expect to continue longterm.
yes sounds good, though dont expect much Cap growth over the next 10yrs, have you been to neighbouring housing commission suburbs like bidwell whalan park etc, fxck me. Dont forget your tennant reference checks. As far as changing overtime, I dont see it, whats the driver for change unless all the Gov housing gets shifted to the Moon . It will always be bumtown.
wealthforlife I agree with you re on the trainline 9particularly inner area) is a good safety net in a downturn. I live 200m from an inner area station and clearance rates here are at 96% with 20% growth last 12 months to June "according to APM" I think 10% is more relalistic, still not backwards though like the Top End in other partys of Syd.
You may say I am bias being as I am a designer/architect but the benifits of using an architect over a project home company are many and like most things you pay for what you get, and if you get a good architect you will not regret it.
Its not just about what the house will look like that you should be considering or be concerned about. There are many issues that an architect is trained to address that a project home builder will not such as;
1. A design that is designed for the site
2. Considers enviromental issues such as views, heating, energy efficency, protection from summer sun and winter weather.
3. Functionality of sapce, simple uncluttered planning, efficient use of space, well considered use of the latest materials and finishes etc and a coherant well considered design down to every detail.
4. An architect can provide you with a better quality of life, a much improved lifestyle and add value far beyond a generic project home that is always almost the same as the next one.I guess you need to ask yourselve what are you trying to acheive, a genenic home on a budget or a home.
If you want anymore info you can email me at [email protected]
grant
me…an 68 astin martin db6……….no, not really……… but it is a car with 4 wheels…….its fantastic…. youd love it…
Granite in my view is very old fashioned and date-able and some what austentacious (sorry about spelling). To suggest that caesar stone or even corian is a poor persons alternative is some what niave, a material doesnt need to be the most expensive to be the most appropriate, take FC sheet for example (fibro) is a very contemporary and relivent material in contemporary archtiecture. As a designer myself currently having worked on home valued up to 16million I wouldnt use granite on a bench top, my first choice on a budget would be ceaser stone then perhaps corian for durability and choice of un fussy simple and timless finishes.
im confused, an interior designer who needs renovation advise, you should know this stuff and know how to build, how do you document your drawings, what are your qualifications if you dont mind me asking.
yes you can still get 0.85 discount (rate of 5.06% variable) as i have with westpac, for your reference total variable loans amount to around 400-500k but i also have an equal amount fixed with the same bank so this may help them give me a discount???
Im no expert on darwin but my research indicates that darwin in general is high risk, Values currently have held steady and there has been increases recently despite a huge surge in prices over the last few years. There is alot of development coming on line around the foreshore likely to lead to oversupply while the economic fundimentals are declining for further growth.
obviously you mean an apartment for 300k
darlinghurst your dreaming (50m2 1 bed no garage) but out of all the suburbs you list that would be the safest (blue chip) bet.
Becuase of walking distance proximity to the following
CBD, transport, harbour, phillip cook pool, cross city tunnel and eastern distributor, circular key- ferrys, woolloomoolloo whalfs, parks, gallery, museum oxford street and a zillion lifestyle strips and an area still going through gentrification and will continue to evolve into the new paddington, also high yeilds and high rent demand from a large rental market.the point is why have you listed the some of the other suburbs, what do they have to offer???
I suggest you use darlinghurst as your bench mark and start looking out from the CBD on a widening radius looking for the something that will meet your price and offer as many of the above conveniences as possible….like 200m from say…. erskinville train station that will get you in town in 7 minutes is almost as convenient as walking there in 10, and has plenty of the darlinghurst lifestyle options etc etc etc… thats one area i would consider, also somewhere along inner west train line is also a good bet for a solid long term investment and in your range.depends on a the floor type/ substrate the access as well as the scope.
I assume you have a timber floor and sub floor access and there is also external access to any plumbing exiting via the wall. if so allow around $1000-1500 to cap of all services. again this will vary hugely by state city province and town. without seeing it im picking figures from thin air… It all depends on so many variables like how much chasing of services is required internally and or externally,
do you have gas?……. to disconnect. ……….i mean the cooking kind;) cuase there some more bread to burn.
postenterprise you thinking is correct
