Forum Replies Created
I am curious as to how this has worked out with you with your approach to the bank last week. There seems to be so many different things about developing property and how to go about making some decent equity of cash flow out of it…. who would have imagined you would have to jump through so many hoops.
After a recent trip to the US I am interested to read what is happening over there from an investors perspective.
I was also surprised to hear from friends of friends who used to work on Wall Street that they have remained in a property the last 5 years that they haven't paid a mortgage payment on for the 5 years. This is a house that has 4 bedrooms, a den, a massive pool and deck in a good neighbourhood that did lose some value after the GFC but has held fairly steady. I am curious as to how after this length of time they can remain in the property. They talk about looking at property they might move to when they are finally turfed out. I just wonder which of you would take them on as a tenant – NOT ONE mortgage payment made in 5 years.
I'm also curious as to how they can be picky as to the type of property they will take – as apparently what they have looked at so far doesn't suit their needs. They said that loans are sold and resold and when it goes through the process that they could just be at the bottom of the pile. They are making no effort to move – not packing boxes just thinking about it – although they believe their time is almost up. Can anyone shed light on this?
I found an agency that has reduced the rate they charge – because I have an ongoing relationship with the owner of the agency. I originally had my property managed by the partner of the owner, but was handed over to someone who I don't particularly want to deal with because the attitude I get when I ask something or ask for something to be done a certain way is challenged (emailing details and asking that they email me back that it has been arranged – to them saying they didn't bother to read the whole email to let me know it was sorted). I did previously manage this property when I had ferals in it – but changed over to an agency that promised the world but delivered little resulting in taking the tenants back to court.
So carried forward I now have a great agency, superb tenants. Ozman – The fact that the property is 200 metres from my home, would it be an idea to take it back and rent it out myself? If I am saving the agency fees I wouldn't see the need to increase their rent for a while, and all the hard work has been done on the house so I don't have any major ongoing issues with repairs.
Bec
There was a comment made by a gentleman at conference to an NRAS representative that some places that have these NRAS properties, the prices are over inflated (as in the property you are looking to buy has a higher pricetag than what it is worth). In the end you have to do your own DD to figure out if what they are charging is the same as what you would expect to pay for the particular area you are looking.
In light of the fact the world has ended up in the state it has with giving only half information…. full disclosure and following sound advice would be the way to go for your long term financial freedom.
Bec
Jamie which accountant do you recommend in Brisbane for setting up trusts?
Bec
I imagine that the same rules should apply to buying in the US as in Australia – dont buy in a hood area. For some reason though when people see a property for $10k the automatic thought is to snap it up. It might be cheap but the consequences can be tragic. I have american friends that lived in a lovely neighbourhood but the property taxes were high in comparison to other towns nearby and a bad school area – they sold this year. I have been to america many times, but I would struggle to find a non hood area without going and spending some time there or having friends/ reliable contacts that know the areas well.
My understanding is that if this was your PPOR prior to you renting it out, and you havent bought another PPOR then you wouldnt pay any CGT (for a 7 year period I think). If you bought another PPOR then this would be considered an IP and you would pay CGT on the increase. If you do the latter and you borrowed money then you would have either self valued or got a valuation on your property by the bank so you would only pay CGT on the portion of difference of the value of the property when you moved out to when you sell. I think its always a good idea to get a valuation when moving property so you arent wondering what it was valued at when you moved out and trying to justify your portion.
If it was bought as a IP then any increase is subject to CGT…. and as you have kept it for more than a year then you only pay CGT on half of what you make. So if you make 50k after all expenses for buying the property then you only pay tax on 25k – and divided between you equally if that is how it was set up… so add 12.5k to each of your taxable income.
THis is my understanding, but I am sure if I have anything wrong with this someone else will clarify for you.
Bec
Jamie… Did I miss this deal? I dont see it anywhere on St Georges website.
I went to a renovators home show event about 12 months ago where one of these companies were pushing for housing in these mining towns – overpriced for my own liking. My brother had bought property in Mt Isa many years ago, and during an uncertain time in the mining industry he sold them for not much more than he had bought them for a couple of years earlier…. so I have seen what happens when things do turn a little sour. I lost faith in the company trying to sell me this kind of property when while speculating they said that the only way interest rates could go was up, and the guy I spoke to wasnt even aware that the Reserve Bank meets on the first tuesday of the month to decide what they are doing with interest rates.
I live in Springfield and really like the area. I do know there was a time when it was hard to find people to rent property in Augustine Heights because it seemed that little too far out for people – in some cases very few properties rented in a street or renting well below what you would get for the same quality of house elsewhere. I would say this is going back 12 months ago. I think as infrastructure is developed that Augustine Heights would be a more popular place to live so as a long term investment it would be good, Im not so sure of this in the short term however.
