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my understanding is Bankwests rate tracker is as you said 0.9 of standard, ie 4.84 then converts in 3yrs to 0.5 off for life of loan… Currently with westpac I have 0.85 off for the life of the loan and thats with only 450k variable, the rest of my money is all fixed (unfortunately)
The point is nows the time to negotiate with the banks on the deals they can get you..
Try the broker mates rates also becuase with combank they can get you from yr 2 of the loan for life 4.84 (at the current cash rate) becuase they pas on the rebate of 0.2 on top of the Combank discount, however i heard a rumour today that combank may lift there package deal to a lesser discount, check this.
cheers
Neve,
Like you I live in NSW have an IP in inner south brisbane (woolloongabba) and the last purchase was in Scarborough up the rd from Redcliffe. I bought a 3 bed house in May 07 for just under $300k, rents for $320/w 200m from the water, growth hasnt been spectacular due to the last 6 months but long term I feel comfortable.
The area in general has had alot of media attention in the last 2 yrs, nearly ever second property mag you pick up mentions it potential, for eg, RPA Datas latest 2009 hotspot list has it at the top.
i think the comments above re unit is valid, there is potential for over supply due to large amounts of stock being built or in the pipeline which effects unit growth so if your looking at units I would recommend older style, preferably with some architectural merit, small block and as close to the water as possible. Remember the up side of lots of development is of course more infrastructure, cafe restuarants etc which has a positive effect on values, houses in particular.
The catch phrase for prime RE on the peninsula is east of Oxley, ie streets east of oxley st.
If your looking at houses, if you can, for long term growth i would look for large blocks equal or greater than 800m2 as these are sub-dividable but even better if its in the zoning that allows future multi rise on the site, eventually these blocks wil be like gold for developers in 10, 20, 30 yrs when the area is a mini sunshine coast.
Yes the new bridge will help growth further but there is also alot of other infrastructure being developed such as investment in shopping centres redevelopment of the forshore at woody point, many housing and development projects or all signs of future capital growth.
steer clear of main rds and avoid the more industrial areas on the west side of the peninsula.
There is quite alot for sale at the moment and some agents are expecting more to come on line in the next little while as there may be people still offloading due to the recession, so you have time and its a buyers market so I would just go up there drive around for a weekend as see as much as you can and make heaps of offers and play them of each other and come home with a new IP,
ipfreely is missing the point.
If you want to go to sydney, why stay in the middle of know where, parra north ryde, dont agree with that at all…If you want to experience the place than I suggest you stay somewhere central or by the beach/harbour.
parking and traffic……..look it ain that bad…………peak hour is really no different to the worst of brisbane or melbourne traffic it just lasts a bit longer generally…parking is expensive as it is in most cities however it depends on where you want to go. Generally outside the CBD parking is relatively easy, if you want to see the best of the city I recommend getting a car and street directory and just explore the place. Balmoral, Nelson park, Bondi, Coogee,Tamarama, Bronte, Manly, Shelley Beach, Palm Beach, Camp Cove, Whale Beach, Bilgola Beach, Zoo, Opera House, botantical gardens, galleries, museums, cliffton gardens, the bridge,
You can spend 20yrs exploring sydney, its pretty stunning
yes I0 loan with offset and buy a bigger unit. Which eastern suburb are you looking at?
Have you tryed darlinghurst east sydney area, another area offering good yeilds is chippendale and darlington.I was looking at this kind of property about a yrs ago (cant imagine much upward price movement since) and I looked at a fantastic 50m2 apartment in a lovely heritage building in darlinghurst , right behind the museum, that had a DA to add a window and obtain city and hyde park views, sold for around 235K with a quick $5000 makeover would rent $320 plus and add 20K value.
Just incase your wondering, I decided to buy a house in brisbane in the $300k range……..well its a house not a shoebox….
God of money
Even the big bank can do you those rates with offset
Combank have 5.04% with 100% offset if you have there pro pack equivelant, this includes 0.7 off their standard variable.
Westpac is 5.21% with 100% offset with there pro pack but you could negotiate to 5.11% depending on your borrowings and circumstancesAlso if you talk to Mates Rates Mortgage brokers they can offer another 0.2% rebate discount on the above from yr 2 of the loan which is then on-going. So thats 4.84%
There are no fees with the above, on all your accounts, including no credit card yearly fees, plus free switching (not fixed) , top ups, est fees on new loans etc.
dont know a better deal…does anyone out there..
I also work in construction, but at the front end, design and architecture.. The story here is very bleek, ive been made reduntant twice since sept 08, and I would be considered very employerable in a good market. Now there are very few jobs, half the job agencies have sacked there architectural agents as there is nothing for them to do, maybe you might see a job a month on line, good luck if you can get on the short list for an interview and dont bother picking up the careers section of the newspaper, its empty. Theres so much competition for jobs that employees are able to fit their wish lists to 100% and fill a position requiring 3-5 yrs expereince with someone with 10-15yrs experience and probably once an assosiate level and pay them a 3-5yr experience salary. Its verfy depressing.
My experience working at this end of Construction is that the first profession to get a wiff of future unstable economic times its architects and developers. The signs were there 6-9 months before the stock meltdown, when massive commercial, residential projects went on hold late last year and have continued to do so ever since. Almost ever fIrm has shed staff and some entire departments including directors now out there picking fruit somewhere.
IF this is a sign of things to come than from where im standing its gonna get alot worse. The only upside for us see property turning from neg to pos geared which is good when you cant neg gear anyway without a fricken job.
Defence housing
You have defended slow sales, yeilds etc, but no comment on capital growth?
Someone in my family (a low risk investor as you said) bought one 15yrs ago with a reasonable yeild and a hassle free investement held for 10 yrs and sold it absolutue zero capital growth after sitting on the market for 18months.. At the time of purchase in 1992 the defence house 4hrs drive north from sydney cost the same as a Surry Hills terrace house in 1992 (which they were also considering, The terrace is now worth 4/5 times as much as the defence house at around $1M and being high rent area thee rental increase of at least 3/4times which would also be a better increase then on a DH. I told this person to buy the terrace. Supply and Demand is the key driver to successful investing
Oh well.
dont know for sure as havent dont the RD DD on the details of these areas, but generally these areas still get good press and are worth a look. The gold coast brisbane corridor in particular is always going to be realitively safe steady bet, long term.
What financial crisis? Dont get too cocky!!!
Im no Dooms dayer and infact if I had the secure funds, Id be buying up left and right if i could right now. However even though Im regarded as a highly skilled proffessional in my area of expertise within the construction industry ,I still have been made redundant twice in 3 months. Lucky for me I tend to pick up work relatively easily but not so lucky for alot of my colleagues. There are no jobs in my area of expertise, not advertised and not on any job ajency books, only positions via "who you know" And this started well before the stock crash. There are many companies folding or loosing large numbers of staff…. im sure its happening in other industries too…..still im upbeat about the near future and agree a recession isnt such a bad thing if you can get work and get by,, …..remember there were people who saw opportunity and made their fortunes during the 1920s depression.
Financial crisis, paradigm shift…call it what you want…..change is the only constant
QLD007 makes a good point,,,,, but generally you could expect reductions such as
500k+…. 0.8%
1m+ 0.9 to 1% off maxhavent heard of more than 1%
yes this is a good idea and yes you will save on interest
There a differeent ways to do this. What you mention is a loan with a redraw facility but you can also have a loan with an offset account.
Your solution depends on your current loan type and what it allows you do and for what cost. My advise is speak to your lender
however..
My preference is to have a Loan with an offset account linked to the loan account and pay all the salary into that, with most purchased paid by credit card which in turn is payed off automatically at the end of each month avoiding credit card interest but saving loan interest. This saves you money becuase the money in the offest account is "offset" agains the mortgage and therefore you only pay interest on your loan balance minus the amount in the offset account. For example say you have 300K loan and 40k savings you therefore pay interest on $260K not $300K
I prefer the offset acount option on my home (offsetting an interest only loan) rather than using a redraw facility on a principal and interest mortgage becuase it allows more flexiblilty should I there be changes to a property structure but gives the same interest saving benifits as well as other advantages. Say for example you go interstate/overseas and want to rent your home, in the above structure you can gear the loan against the original loan amount and not the reduced amount. it also allows a larger buffer zone if things get tight but it allows you more buying power and leverage should you wish to buy other investment property in the future. I would however only recommend paying interest only on your home PPOR if you are diciplined savers and are infact saving the same or more than the equivelant princpal and interest repayments
Hope this helps
janedavo
there are many drivers for cap growth
the most obvious reason is due to supply and demand.
what drives this can be any of number of the following.proximity to infra-structure like hospitals, schools, train, bus, freeway, university
lifestyle precint, close to cafes, bars, restaurants, beach, river, parks, entertainment venues, golf clubs etc.
tourism
proximity to a CBD or regional centre.
Gentrification of previous undesirable areas ie
the more people that renovate the more desirable an area becomes, hence the more shops and cafes open up, and more people want to live there. Then the more the government wants to spend on infrastructure and the weathier the buyers are who want to move in, which keeps pushing up suburb wages and prices. …..and so it goes on. from Bum-town to Up-town.
Major government master planning encouraging new development, conversion of industrial sites to residential or commercial,
introduction of new infrastructure to the areakey industry within region having positive effects on employment and wage growth, could be a new hospital, mine, commercial precinct, what ever.
uniqueness- such as an old terrace house, art deco unit, workers cottage, victorian mansion, or if its new its generally better to have superior high demand quality design than generic stock if you can afford it , these are all limited supply, generally high demand.
land size and value is important- the closer to the city the more important this is, the land should be at least half to near 100% of the property value depending on proximity to CBD) generally your better off buying something thats has above the local average sized block, particularly if you can develop it ,sub divide it, extent the building, add value to it, what ever it is that offers a desirable point of difference to other local properties. Then you have more growth potential.
If its a unit buy one in a small unit block (4 to 10 /12 units) then there is more land content per unit. blocks of 4 are the best.all of this adds to high rent demand (like inner city)
high investor demand and home owner demandjust some ideas
and read lots of stuff, you dont to pay for courses etc. iall info available for next to nothing
best of luckFunny, was down there in sept (just a holiday) and looked at the realestate windows as you do and thought the same, cheap, good rent, etc and since then this area has popped up a few times through my various general research.. yes there appears to also be al the other fundimentals for growth as you mentioned. worth a look, You might have some competition
as god or moneys says, the supply and demand equation is not in your favour on this deal, limited supply and strong demand is the key to a good investment , then worry about the yeild.
phungu,
I had to transfer a title some years ago from 2 names into my name. The valuation as recall was done via an independant valuer via the bank I held the mortgage with ( i think).
Anyway the point is this, the valuation in my view was about 20-25% under the current market value, this valuation was in an rapid upward market of 2003,( perhaps it reflected is "true" value back then)
However ….. i think that in the current economic climate , you should get a favourable valuation anyway,, valuers are usually fairly conservative and this may be more so now I imagine………….thanks terry..
without a trust set up are we allowed to buy in my partners name even if we are defacto and collect FHOG?
PS. I thought one of the pros of trusts (such as Hybrid trusts) was that there is no stamp on title transfer?
tricky question, depending on where you plan investing and personal circumstance, how does the R word effect you
2 weeks ago I was sitting tight and a little nervous, just retrenched due to the down turn, thinking shite my properties values are also likely to, or beginning to slide backward or sideways with no plans to take on more debt obviously. Now with a new job, 20% pay rise and the recent interest rate cut of 0.8% and more to rate cuts coming, Im entertaining the idea that perhaps nows a good time to start reseaching again and getting finance sorted should an atractive deal pop up ……..with a long term view…
yes scamp you did warn us, but you also told us interest rates were going to keep going up! 50% fall in house prices, maybe where you live, still seeing record prices in my neighbourhood in recent weeks and demand way above supply, that said, i would – be far more cautious about buying now, many areas will most likely see falls, but i would have thought 10-15..% to be more realistic, depending on location. Be worried if your highly leveraged 80+%
i think Jon might be to simplistic and have an agenda….but agree with erics view on location…however if you can buy high demand location and a quality free standing house (with all the usual ticks marked off on the list) then you will be far better of than a non discript, developer designed , medium density eye sore ( in Jons area of sales the Gabba central would be a good example of rubbish inner city architecture with little chance of growth in the short to medium term) but in a good location where house price growth will far out strip such developments.
hi benderfile and others
sorry 3 months to late on the original post but my view is this.
benderfile i would hold. Tempe in my view is a weaker market than say newtown/eskinville and those markets are flat or in slight neg growth for now.. People are more likely to buy in tempe when closer in is humming and they just cant buy in… So with that in mind you wouldnt get the price you could get say 6 months ago when things were moving along ok (but not hot)…FOr the others out there looking…. remember "buy in the best location you can afford at the time" sure many parts of tempe have less aircraft noise than newtown ( i have freinds in tempe and ive lived in newtown) but thats where the avdvantages end…. Erskinville next to newtown for example is a very good area to invest and has been popping up on peoples hot lists for yrs and it has less aircraft noise than newtown but with all off newtown lifestyle advantages plus it has 2 train lines running through it and 3 stations in walking distance meaning you can train staight to the city circle in both directions ( very handy)…You would be far better of here than tempe in the long term with better cap growth (generally) and better rental demand, higher rents being walking distance or one train stop to sydney uni.
Generally i think this area, despite now decades of gentrification still is along way from being the surry hills/paddington of tommorrow, but it will happen!! so if you can get in, do it…
my advise
