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I dont see the relivance of religion here, a scam is a scam regardless of who the scammer is or claims to be…..besides religions the biggest scam.
only A – (been investing for 4 yrs)
but all on sydney and brisbane inner city property – so net worth in the millions obviously.
EH
there a few things not quite right here.
Moving from your PPOR and turning into an investment property is usually a little untidy financially particulary if you have paid money into the loan using a redraw facility. Normally not the best approach depending on circumstance. Your better off selling the townhouse buying a new house and then buying an investment so to limit non deductable debt and max deductable debt. Currently you will be doing the opposite in your suggestion
no you cant
Most of these retiree investments (and there are plenty out there) fit the conditions/scenario you described.
They are geared toward very low risk investors who want certainty as far as tenants go but thats about there only pro.
Id put them in a similar basket as most Defence Housing and Student accomodation, where their is little capital growth becuase all the usual drivers and fundimentals for capital growth are non existantRBA may drop rates in 2009 but unlikely this yr, but the banks probably will take there time to drop, if at all. We may still see further rate increases from the big lenders without RBA lifting them as has already been evident.
Still keep an eye on the fixed rates, if they start to fall thats an indication the banks are hedging their bets on lower variables coming on line.
i think to say becuase other markets are crashing then we must expect a crash of the same magnitude or worse is a little niave
Compared to the US for example we are very different market.
1. we dont have an oversupply issue
2. we dont have loose lending laws that enable lenders to lend to just about anyone
3. we dont have a honeymoon rates equal to half the interest payable or more thinking we will be ok after the honeymoon period is over. (US lenders have a lot to answer for)
4. We do have a growing economy riding of the resource sector and commodity prices.
5. We do have vacancy rates at record lows
6. We do have a housing supply crisis holding up demand.Consider this and i think that a large fall across the board is unlikely but it is likely there will be falls perhaps 5% is more realistic across the whole country… So scamp is right on some level but again to generalise that all investing now is not worthwhile is not right….There will be property that rides this out nicely and if you can weather a downturn than long term you will be fine if you invest now and buy well located property. Perhaps focus on making your existing property work better for you while things are quite is my advise if your not buying.
i generally agree with you rudo1ph, you would be buying at a good time bayside depending on where and property type.
FOr example just a month ago I saw a house in redcliffe divided into 2 flats probably renting for $200ea a week, located 3 houses back from the esplanade (waterfront) on 600m2 go for around 400K, thats a no brainer, would have snapped it up if I had the resources at the moment. Sure the yield is average, (but if can hold it so what) but strong capital growth is pretty much guarenteed..especially if you redevelop you would be sitting on a gold. DO what you fell is right.
depends on wot your after… the obvious growth areas with the right fundamentals such as government spending on infrastructure, transport, new development encouraged with changes to planning restrictions, population growth, large scale urban development and urban consolidation inniatives, and other existing growth drivers are well documented.
Your choices will obviously depend on your chosen property type, budget ,what you intend on doing with it, (subdivide, rebuild,renovate,keep as is,etc)
I would consider looking in and around the following suburbs as far as no brainers go with a long term view expecting above average growth (depending on property type, remember you can have a property perform badly within a suburb thats doing brilliantly if its not in high demand and a poor quality investment, do your own research on particular property types and areas).
ipswich
redcliffe
mt gravatt
chermside
boondal
westend
woolloongabba
nundah
beenlieghdo you mean your putting down 20% or our getting a 20% discount, you mentioned is positively geared also, hope this isnt a rental guarentee for a set period on a new development claiming there selling at 20% discounts, sorry to sound like your mother but as the posts above have pointed out nows the time to be cautious especially for a newbi….
For the record I dont usually invest again until i have at least 40%-50% equity on all property I own including PPOR. This may sound cautious but it usaully only take 1-2yrs for 50% equity to return after each purchase once you get a few properties and given im negatively geared on mainly high growth inner city assets (which is what i feel comfortable with as its low risk), so I need to wait a bit anyhow for yeilds to come up to free up cash flow or renovate them to increase yeild equity.
Dont try to do to much to soon, you will be suprised how quickly you can build up a folio even at my slow pace.
yeah you tell em newbi……imagine if i still had the old dunny out near the backlane, cooked on the an original wood burning stovel stove, and wrote this email for the internet while peddling a bicycle to power my computer…chris is a goose…..
350K for a house or unit….either way generally speaking your looking outside the 10km radius, unless its a studio one bedder, you may find 2 bedders iwithin this radius but only in less desirable suburbs.
Housesoutside 20 -25km radius for houses and only in the southwest and westerly direction, which is the turbulent market part of sydney, nothing north east or south.
nothings changed here…..
agents have a reputation for over quoting to sellers and under quoting to buyers becuase thats what most agents do to condition a sale as soon as possible to collect commission, particularly at auction.
as Jon chown said " An Agent attempting to tell a Seller a low price will invariably walk away empty handed and with nothing to sell" agents dont want that, they want there commission,
ashish,
obviously a busy rd means a reduced price for factors such as parking, noise, polution,desirablity,resale value ( particulary in a flat or backward market, everything sells when things are hot but you will have trouble moving it when its not) you are reducing your buyers (supply demand) etc etc etc…… so as an investment in terms of capital growth it wont perform as well as a well located property. It also depends on what kind of busy rd you refer…and where it is on that busy rd .ISsit Parrammatta rd kind of busy or king st newtown or oxford st paddington kind of busy, both busy but king and oxford st will most likely out perform parra rd for obvious reasons..such as the suburd there in and the facilities and buzzing lifesstyle around them.
Rent return is difficult to know without more specific info on the property itself and what you may compare it too, but i would imagine depending on the rd then the reduced price will be similar in percentage to the reduced rent so the yiled may be similar, you may even get a better yeild on a busy rd…
hope this helps.
funksta,
i agree with richard also and the general sentiment in this thread about being careful with house and land packages.
The rent return is nothing flash on the house and land, though i think ipswich is a good place to start with due to the current and future gov spending an projection of popuation growth.
Ipswich is certainly an area to watch. My advise will be different to others here because i dont buy new properties and prefer property that has a known supply and scarcity value.
My reccommendation would be to buy an solid old character house on a large block that you can sub-divide. Keep the old house and pay down the loan with the sale of the block to reduce your negative gearing. Remember there will be alot of new stock coming on line and there is danger of it becoming over valued and crashing like in western sydney currently. Ive seen ovepriced 2003 properties in western Sydney sell for almost half of their original selling prices (from 900K to 550K) in the last 6 months and this is the danger with new homes on the fringes when development is fast paced and developers get greedy when the wheels are fast turning. Though i dont see the same thing is likely in Ipwsich becuase of the low base but who knows in 5yrs.
And know i wouldnt pay 900k or even 100K for a dodgy mock tudor, italianate, fauve federation, pretend wantabe palace that pays homage to the motor car with 5 garages and winding streets that make impossible to walk anywhere and even if you could there would be nowhere to go and each having an enviromental footprint of a small city , personally i think these homes are a discrace, but thats just me. Anyhow I digress. Always get an independent valuation and make it part of contract conditions as well as the usual building inspections etc etc so you have an "escape claus".
You may be earning 130K combined but assume your income split is roughly half and neither of you earn over 80K you still only get back 30% in tax deductions on all costs so negative gearing isnt that attractive. Having myself gone from 42% tax to 30% and an increase in rates of 3% i can tell you on a 5% yeild you will have alot of out of pocket expenses which will mean you will want at least 10-12% per annum in cap growth to justify the losses.
My view is you will get better growth on an old queenslander in close proximity to the centre of ipswich, (i like the houses just north over the river personally, a nice pocket) than a new home and if you can subdivide as i said you should be able to sell the block for at least 1/2 of your orginal purchase price but you still have a house which shoud be worth near what you paid by then. Obviously you must deduct all costs but you would getter ahead faster and have less financial stress.
I Have given a $500 deposit on signing contracts and paid the rest as Richard recommends via deposit bond once the amount was finallized after my contract conditions, you need to check if this is ok with vendor/solicitor.
Doesnt sound like a good investment choice im afraid….. yes sydney markets rocky since the end of the boom in 2003/04 but you should have made at least 15-20% gain since late 2003 if you bought well…. I would need to be convinced otherwise if you think there are good fundementals for growth on your property in the future….There are definitely far better investment opportunites out there interms of future growth and rent return……..
If you hold you should consider improvements, you said its run down so why cant to do a cheap tart up, and increase your rent with vacany rates so low… are you near the station, surely you can ask more… even just painting inside and out may make a difference whether you sell or hold. think about it…
suggest investigate getting a better loan product you should be able to get around 8.6% if you shop around, that will make a big difference to your finances.its really not as difficult as some might suggest to get on the ladder and start the ball rolling.
above there some really good points although i did just skim it ( alot to read) but can i add and or re iterate.1. forget the spuikers do your own research make your own observations.
2. speak to people who have suceeded and get there view point, hindsight because they will be using this knowledge to make there next move.
3. either buy a cheap investment or if you buy your own place rent out your spare room or rooms (cash in hand)
4. if you buy a home add value as you can afford. (buy an ugly duck and do cheap renos to turn into a swan)
4. borrow what you can afford
5. you will need to make sacrifices probablyno new cars, plasmas, mobiles, designer cloths, expensive restaurants etc.
You cant expect to have a gen Y lifestyle with a baby boomer port folio, it aint gonna happen.
I had 1.5m in property before i upgraded my first bomb car which I drove to the ground and owned for 15 yrs, I bought most of my cloths and furniture from Vinnies (still do sometimes) and spend conservatively….am i glad i lived this way, hell yeah….did i feel i missed out, no way…. do i still spend conservatively…yes it do…its about your priorities…id rather be modest and confortable financially than looking like im flaunting what i cant really afford.6. stay positive, always opportunities out there
7. think laterally (dont follow the herd or if you do have a good reason)
8. remember your choices now arent for ever
9. remember that what you borrow today will seem like nothing in 20-30yrs
10. You dont have to pay off anything so keep it interest only, even on your PPOR, its not about getting into massive debt and having to pay it off, thats old school mentality, money makes money, so the larger you asset base the faster it grows, dont worry so much about the debt. How much money do your reckon large big cheese corporates borrow to finiance themselves…….think of borrowing money as a tool, not a liability. If your assests are growing and you can HOLD ( not pay it off) the debt thats all that matters.
11. you can always extend the life of loans in the future
12. remember capital growth is expidential
13. think long term, what if I dont start today, its only gonna get harder…what if id started 5 or 10yrs ago where would i be today… so where are you gonna be tommorrow.
14. dont make it a chore, make it a hobby, remember you could have far worse interests like smokin crack in an alley.
15. dont get to hard on yourself…. you got plenty of time… you dont have to get from A to B in an afternoon, besides the journey is the best part.we know theres a big push for redevelopment of parra so as far as units are concerned theres a real chance of over supply in the near future, id be careful with the type of stock you buy..id be looking at high quality design by leading architects (stear clear of generic developer stock) or quality old stock with good period architecture if your considering a unit investment. If I had a 300ish -budget id rather look at blacktown houses with large land as recommended by someone above, something you can add value to…. but thats just me.. good luck .
luke
get a pro to render it dont paint it that will look ordinary, and the above suggestion re just doing the front is a good one but it will depend on the type of house and how it sits on the block…
FOr example if you have just a lane or path down the each side on a long narrow block it would be fine but if the house is in the middle of a large block what will just rendering the front look like??? Just think about the integrity of ther buildings architecture is all im saying…
hope that helps
