Forum Replies Created
Furthermore, if you have interest only loans, they effectively never terminate and one is thus paying 4% every year on the full loan amount for the rest of time to a broker for the mere pleasure of introducing your business to a lender. Sorry Mel-not having a go at you or brokers but just have a bit of a problem with a system which rewards people so well for years into the future (through trailing comm.) without the appropriate input which the commission would justify. It is the same in the insurance world.
Thanks Mel
So in essence because of the trailing comm. every year, the broker comm. is costing the mortgagee somewhere in the order of $20000 (for loan of $200K) over the life of the loan excluding the cummulative interest effect of this money being paid along the way? And if a client goes directly to the bank the bank are earning an extra $20000 because they dont have to pay a broker an comm.?
That is quite a lot of money for anyone and especially for investors who have a number of IP’s!!! Seems that Michael is onto something here!!!Melanie
Could you explain the commission that mortgage brokers earn? I have never had this properly disclosed to me before but have had a financial services company offer to split the comm. with me 50/50 if I took my refinancing business to them. They were saying that the comm. amounted to about $20000 over the term of the loan/s. Before that I was under the false impression (it seems) that brokers were paid a one-off fee upfront which was not too large?Sooshie
I live in Bris. now but used to live just off North Rd and know the pier and sign very well. It is a great analogy and the three choices seem reasonable. I am not one for restricting ideas or peoples access to info, deals and other people and thus option 2 seems to be the best option at present. Maybe advertisers could be subjected to a more vigorous registration process where they provide more contact details which would allow them to be traced if required. If they were genuine they would not mind providing these details.Interest rates in AUS/NZ are very much determined by what is happening in the US and the world economy as a whole. What will happen in the next few years is a bit of a guess but if the banks are willing to fix your interest rate on your mortgage at about 6.5% for 5 years and they are in business to make money they must believe that the pressure on rates is not that great. I cant see a huge change in rates either up or down but in the US the trend is still down or at best static. Until the US economy starts to overheat (which is not likely for some time) there is not much chance of rates rising much. The range I am predicting is 0.5 – 1% over the next couple of years.
Lamotte, if you make provision for rates to move up to 2% in your purchase, there is no good reason why you should not buy now. There seems to be a fair chance that prices are more likely to go flat for a while than they are to drop by any great amount even though the statistical information and economic analysis of the property market does support price corrections.
Well Sooshie
I think that Caveat Emptor or any other disclaimers would be read and noted but quickly forgotten by many. All “old” investors will know that the thrill of the chase is emotion charged for newbies and because it is new they get a little over eager. I have read so many posts on this site which say they have no IP’s yet but expect to have 3 or 4 in the next 6 months. This to me seems a bit like throwing caution to the wind for people with little or no PI experience. But at the end of the day, each person is their own keeper!![8D]Hi Sooshie
Most of the ideas posted here have merit but I would return to an earlier post of yours where you said it would be difficult to protect forumites from exploitation (or similar words). I fully agree. I think that although people should do their own due diligence, when one responds to a web ad by a RE agent you are protected by the fact that the RE agent must abide by a code of conduct and rules governing their industry. That is protection. This type of protection would not be available here. Lets face it, there are many newbies around and they do need protection and guidance. With arrangements like wraps and many other innovations which are not traditional in the RE agent world there is even more reason for newbies to be wary. The urge to just jump in and get going is often very strong and this often causes investors to not be as diligent as they should be. At least, through an RE agent or reputable website like realestate.com.au one expects professional advice, services and accurate information. This website is not an RE Advertising website and taking it that extra step towards that will require the rules of engagement to be carefully worked out.I also agree that this forum is about networking as much as anything else. For that reason I suggest that no proper adverts are allowed and that people should be allowed to post and discuss deals (even if they are earning comm.) but that the discussions must be taken out of the forum at a point when the person posting the deal wants to discuss price and other specific details. That way this forum can be kept clear of free advertising and spam. Disclaimers will also be required.
Dan
I do have townhouses in my portfolio but have decided the body corporate is too much hassle and now favour houses.How much area would a 3/4 bedroom townhouse take up? It depends. I would think carefully about what market you are aiming at in the area. “The Block” discussed this point extensively and there were different opinions (The Boys vs Phil and Amity for eg.) but generally most were similar in style, design, layout, standard of finish etc.
A 3/4 bedder may be anywhere from 150 sqr mtrs at the lower end of the market to 300 sqr mtrs plus at the upper end of the market.Cameron
This deal is about as good as it gets at the moment. Old guy, doesnt know true value and wants quick sale. These are the kind that I am looking out for all the time. Reno about $10K plus legals etc should take you up to about $165K all up. It is not +ve geared but about as close as you will get in a good growth area like Burleigh. As others have mentioned, you could realise a capital gain of about $45K in a very short timeframe so cant loose. That is a big enough margin to absorb any correction the market may deliver in the next while as well.
Go for it!Well said brianc. Time to be careful.
As far as David Murray’s comments are concerned-well, talk about vested interests, share options, performance bonuses, share holder sentiment, etc.Dan
The density is the % of the total block size that can be covered by buildings.
E.g. 1000 sqr mtr block with 33% density allows you to build on a total of 333 sqr mtrs of the block. So 666 sqr mtrs must be open space (public or private), gardens, private roads, pathways, etc. Just remember that other town planning rules also govern what and how you build. For e.g. you may not be permitted to build terrace type houses in some areas (not a great example but you should get the idea).brianc
RE agents, mortgage brokers, developers, etc will all talk up the market wherever they are as they have a vested interest in the wave continuing. Need I say more!Lawry73
Can’t vouch for the accuracy or up-to-dateness of this data but imagine that because Homepath are attached to CBA that the data is of a reasonable quality. Some of the data is free and some must be paid for (like the historical sales data).
Free data is probably worth as much as you pay for it?BTW
You need to register and login. Then go to Locality Information – Suburb Information.
Enjoymcdeyess
Yip QLD is a fantastic place to live. I agree with you that their is still some upside left is QLD and that the bust may be less severe for Bris. but do not think that the rest of QLD can justify and hang onto the increases that they have seen. I really dont think that Baby Boomers will flock here any more in 2008 than they are now. There may be a gradual increase in numbers due to the ageing population syndrome but not a sudden surge.mcdeyess
I agree about Syd, Can, Melb due for a correction but must also add that although QLD has always been behind the others it has always been for good reason. This reason being substantially less jobs and general economic activity. This has not changed and the migration of people from south has also not changed much (not increased as much as people think). Baby Boomers moving up here also dont account for a big enough number to really make a huge difference to demand. The bottom line is that for the market to sustain price growth in QLD continuing while Syd, Can, Melb are falling, more jobs must be created in QLD and that is not happening. I live in QLD and would love the boom to continue but know that it cant.brianc
Please read a post by davide in the subject “Will you buy if -ve gearing is abolished?” It is an excellent post and has some great advice from a really successful businessman.I personally don’t back -ve or +ve gearing based only on the numbers like some investors do. I prefer to choose IP very carefully and consider many factors including the yield, capital gains, tax benefits, saleability, rentability, future job and population trends, future infrastructure developments, etc etc.
I would be very careful of regional towns. These may look great now but have a very small capacity to weather an economic storm. On the other hand, the top end of the city market is also very volatile in terms of price in a downturn. To my mind it seems that the safest ground is the mid-lower end of the city markets. Do your due diligence and jump right in. There are good deals available all the time both in booms and in busts.Dan
The type of zoning of the land and the particular council laws will determine the density of buildings allowed. This density varies from one suburb to another even within the same council and from one block to another. For example it is possible for a low density block with a density of say 20% to be right next to a medium density block which permits 33 or 40% density. This is however not that common as councils attempt to have a consistent theme across an area in terms of block and building size and style. The best thing to do is to phone the council and ask them about the specific block or the general rule for the particular suburb if you do not have a block yet.
Please be aware that the approval process can take years in some areas and weeks in others. It very much depends on the degree of heritage in the area and the amount of opposition to the development.Hey maximus and others
I would hope that we all are always very careful about what IP we buy. Davide’s post sums it all up very well – brilliant post – thanks.One last point. If -ve gearing is removed, this will put the brakes on the building industry in a big way. Many unit developments (especially) as well as a large number of new houses are IP’s which are -ve geared. These will just not get built and you would find a crisis in the building industry.
I dont want to open up a can of worms (or maybe I do?) but the government could change a lot of their current spending and use of taxes to benefit Australia economically in much more productive ways than to abolish -ve gearing. For example remove the massive social security safety net by limiting things like doll payments to 12 months. Winding back some of the top-heaving over-regulated government departments and too many other examples to mention.
-ve gearing is a form of self funding retirement and it would be catastrophic to fiddle with this now. I dont think it will happen as long as there is a liberal government.
