Forum Replies Created
TMA,
Thanks for pointing out the major flaw in my finance suggestion……..allways learning. However I’m sure there would significant monthly cash reductions with the other suggestions.
Would you agree?
Regards
Herb
hrm
JD,
I have a dual key unit in Spring Hill which I bought about 2.5 years back. I think our investments will do well over time.There’s a lot of -ve and +ve talk about Brisbane CBD.I’m for the +ve.Incidently I have also bought another, off the plan due for completion 06.
The figures u state are intersting. It would appear that you think u have paid too much and that it’s costing u heaps each month. If your loan is $215K and you pay IO of $1487 then I calculate the you are paying interest at 8.3%. This appears to be a high rate of interest…could you look at refinance.
If rent received per year is $285per week X say 48 = $13680 less say 8.8% agents costs= $12476 less the wopping $5000 pa for rates BC etc.leaves $7476 nett pa or $623 per month, therefore as you’ve said the short fall each month is $864.
You could reduce the monthly cash flow by the following:
Refinance @7%pa IO. $1254 per month repayments, reduction of $233.
Reduce pay day tax. If you have yearly losses then you could submit a form to the ATO, used to be 221D so that you receive the tax loss in your weekly pay packet instead of at the end of the tax year.
Claim non cash deductions i.e. DEPRECIATION, PROPERTY INSPECTIONS.
These are just a few suggestions. I consult an organisation named ASTORB in Brisbane and I have found them very helpfull in terms of What your unit is really worth, rental, depreciation, agents etc. etc.Cost about $200 per year. Excellent value for money.
If you sell now then u would most likely walk away with zero or owing some.
My advise if its a quality property and u can reduce the monthly cashflow to a manageable level, hang on to it.
hrm
Hi Braddles,
As with any investment there are risks.I am new to dual occs, I’ve got two on the go at the moment. Yes, councils can be a pain but I guess it’s like anything new, you have to aquire the knowledge. I have one at Wantirna for 3 units and this ones been knocked back (Not approved) so we went to Vcat and failed again. At this stage we know exactly what will be approved so second time around should be smooth and quick sailing. We resubmission the application only last week.I must point out that we were trying to get the max out of the 810 sq m block.The process started about 18 months back.so they can take some time.
The other is at Dandenong South and I received the Council approval 7 months after purchase. The old house at the front of the block in under renovations at the moment and I estimate thatI shoulld be able to fully recover all costs to renovate and the development approval costs when it sells (after 12 month). This mens that I get the DA and land for free.
You would be interested to know that I’ve seen adds in the local rags for properties that have development approval.I estimate that I could profit $40-$60K if I sold now. Similary for the Wantirna property I had it for sale with a local RE . It was being sold with permit and plans and we had 2 builders perpared to offer me about $80K profit.
I was very nervous (out of my comfort zone)with the thought of building 3 units but I plan to build the dual occ this year. I will assess the Wantirna situation when I get the development approval.
I have learn’t heaps. One very important thing is to find a switched on Architek who has had expereience with the Council you plan to deal with.
regards,[cigar]
hrm
Hi I’m not an accountant but I think it goes something like this. The cost base would be $250K minus one eleventh. Repairs at $1000 or whatever figure should be deductable this FY. If you spend $ on improving the system then this would be considered as capitol i.e. it would add to the cost base and depreciated over the allowable time frame set by the ATO. You should check out the ATO website.
Hope this helps.
hrm
I don’t see this as a problem and I would.t worry or get upset. They will need to inspect the property again and go thru yourlist.[chill]
hrm
Its great that u are thinking of investing at your age. My suggestion are:get some regular income i.e. a fulltime job., Learn to save, learn to live on the minimum, continue to educate your self thru books, forums etc.
Best wishes.
hrm
Hi Braddles,
Great to see that you have the drive, some cash and some ability to do renos.
I think your strategy of buying close to the CBD sparkle up, increase rent and wait for CGs is sound and will no doubt work over time.
As Steve preaches: problem plus solution equals profit. I am using this approach at the moment by find suitable houses for dual occ or units. There are opportunities to do just this in many areas of Melbourne such as Noble Park, Dandenong and Frankston to mention a few.Or perhaps in your local area.
Another option is to buy undervalued units close to the CBD such as Marybyrong that will surely go up in the next few years. PS I have one for sale if interested.
Good luck.
Herb[cigar]
hrm
You could find out thru RE’s if there are any creature comforts u could add ie. clothes dryer, split system air con, dish washer, table and chairs for the courtyard, window tinting, then you may be acle to increase the rent.
hrm
Hi Simon,
Here is a reply I sent for a similar Q.Hope it is of some help.
There are ways of getting that loan just as my son has with some help from mum and dad.It went like this: 18 yo first year at uni, has regular casual job for the uni breaks, treasured each dollar he made(non-smoker,drinker. girlfriends, clubbing, and other things); saved for his first car than saved for a deposit.
We found a 2 br unit for $141K near his uni. Because of his low income I went as joint applicant for his loan of $112K. He got $7K from Jonnie FHOG and stamp duty exemption in Vic because he was a concession card holder. He had saved $11K and received the Mum and Dad grant of $5K.
He let the tennant stay till he had to move in to satisfy the FHOG (12 months) then moved in and found a flatmate to share the living costs and the mortgage. After living there for 8 months he found that he missed the comforts of home and it was difficult to study.
He is now 20 yo doing his 3 rd (last year) at uni, has a good tennant, works one day per week and receives Ausstudy allowances which he could not get access to when 18 due to his parents income.He is now $9K in credit as he deposits all his Ausstudy and wages into his load account and redraws when absoultely essentail.
You can do it!
Good luck.
hrm
hrm
Check with the two agents u have used to get feedback on why renters have not chosen your property. you say the rent is OK then perhaps the lack of undercover parking, storage, safe play area for thr kids, colour of the walls, heating airconditioning, etc.could solve the problem.
I recently experienced a long delay in getting a tennant so I asked the agent to put up a board. A week later I had a tennant.
There are many good ideas in the previous responces.
A way could be to offer something different, say free rent, free microwave oven, clothes dryer, free pizza . Dont be desperate and accept any tennant be patient.[buz2]
hrm
I would seek advice from local REs inregards to demand and the rent and talk to the Body Corporate.
hrm
I use the services of Astorb in Brissie(I may have spelt it incorrectly)they provide a range of advice and have saved ne lots of $. Costs about $200 for a year. Excellent value for money. Highly recommended for interstaters.
hrm
Hi just removed wall paper from the kitchen in a reno I’m doing at the moment. My A Team suggested using just water, hot or cold, and sponging it on the paper ensuring it soaks in, leave for about 5-10 mins then scrape it off…presto. Give it a go.
hrm
Nehal,
If this is your real name. What age are u today?
Last week you were 15, 18 & 19.
You asked some very serious Qs in other posts and u received lots of good advice, But buddy don’t waste peoples time with the rubbish u have presented in your posts.
You are a TIME WASTER>
GO AND ANNOY YOUR BUDDIES AND GET A HAIR CUT.
GOOD BYE.
hrm
Nehal,
I admire your determination and desire to get into property. There are ways of getting that loan just as my son has with some help from mum and dad.
It went like this: 18 yo first year at uni, has regular casual job for the uni breaks, treasured each dollar he made(non-smoker,drinker. girlfriends, clubbing, and other things); saved for his first car than saved for a deposit.
We found a 2 br unit for $141K near his uni. Because of his low income I went as joint applicant for his loan of $112K. He got $7K from Jonnie FHOG and stamp duty exemption in Vic because he was a concession card holder. He had saved $11K and received the Mum and Dad grant of $5K.
He let the tennant stay till he had to move in to satisfy the FHOG (12 months) then moved in and found a flatmate to share the living costs and the mortgage. After living there for 8 months he found that he missed the comforts of home and it was difficult to study.
He is now 20 yo doing his 3 rd (last year) at uni, has a good tennant, works one day per week and receives Ausstudy allowances which he could not get access to when 18 due to his parents income.He is now $9K in credit as he deposits all his Ausstudy and wages into his load account and redraws when absoultely essentail.
You can do it!
Good luck.
hrm
I bought a unit in Bris CBD off the plan 2 years back, due for completion 06/07. Brousing thru the internet realestate sites last week I note that I could sell for a good profit. Also I have a dual key unit in Spring Hill bought 2.5 years ago. I’m getting good rental return + ve cash flow and I beleive I could sell for a reasonable profit too. Despite all the negative talk about Bris CBD and Spring Hill I believe it’s not what many say. PM me if you wish.
regards,
Herb[cigar]
hrm
Hi,
I note you are in Vic.Assuming u purchase in Vic then u maybe able to get the state handout too. see:www.sro.vic.gov.au.Also u may be eligable for other $ savings (exempt for stamp duty) if u are a concession card holder. or other categories. refer to the site above.To answer your Q you must occupy the property within 12 months of settlement and u must occupy it for a min of 6 months, or u coulld be asked to payback all grants plus more.
You could rent out to the current owner but you will obviously have issues with tax (rental income and impact on CGT) U need to talk to your accountant.
Good luck.
Herb
hrm
Leila,
Many thanks for your info, advice and the web site; they are helpfull.I will do some research with the local hospital and clinics as suggested. I’ll keep you informed if I find any valuable gems of info.
Regards
herb
hrm
Thanks Darryl I too would be very interested in some software to MANAGE IPs.
Thanks Myydral for the Jaffasoft tip.The site looks helpfull but I could not find anything on MANAGEMENT of IPs.Could you please direct me to the appropiate area of the Jaffasoft site for MANAGEMENT.Also I note that you said you hadmade up a spreadsheet. Could yoy possibly PM it me if thats possible.Many thanks.
hrm
I suggest you visit your local council’s planning department (generally very friendly people). They will be able to give you some guidance on what you could do and council costs etc.
PM me if want details of a good architek in melbourne.
Good luck and please keep us informed of your progress.
hrm
