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IP Freely
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February 26, 2009 - 11:32 pm
Once you have subdivided you will be paying rates on 2 properties, may have (more of) a land tax liability etc.
You will need to do your own research in the area to confirm if the total value of sales for individual duplexes is greater than when similar properties (like yours) are sold in their entirety.
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February 26, 2009 - 11:27 pm
Pubs, if you mum doesn't need the money at present ie she has minimal debt, talk to her about 'vendor finance' ie she will essentially loan you the value of the house and you pay her back via a documented mortgage – you'll need to get the input from someone who has dealt with vendor finance to structure the deal so that it works for both you and your mum. The rent that you get can form the basis for your repayments.
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February 26, 2009 - 1:08 pm
Purchasing a strata titled house is generally no different to buying a strata in any other form eg townhouse or unit. As the strata only relates to the two houses, there is generally no need to appoint a strata manager as it is easy enough to have you and your neighbour to have an annual meeting to discuss all maintenance issues relating to common areas (ie the common wall, dividing fence & driveway).
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February 26, 2009 - 1:01 pm
Tony, it would be prudent to put the condition of obtaining the certificate of occupation back onto the vendor. The risk being, if inspections have not been undertaken by the council or private certifier, you will need to open up walls, demolish walls, expose footings/reo, remove tiles etc in order to allow the certifier to inspect the building works (This may cost $10K+++).
At the very least, you will need to get copies of all inspections undertaken by the certifier, as well as copies of the DA/CC stamped plans, proof of payment of all fees to the certifier, copies of any survey, water board diagram, plumbers certificate, electrical certificate etc.
It is possible to occupy a premises without a certificate of occupancy (provided that the certifier has undertaken all inspections and the works have been deemed ok).
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February 26, 2009 - 4:03 am
Joint ownership (on title) and loan in a single name should not be an issue with the lender. Both parties will however need to sign the consent to mortage (which is registered on the title).
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February 26, 2009 - 3:54 am
Daniel, using a pm is a great way to save yourself time, especially if you are time poor. You will need to ensure that the PM holds a builders licence (and that they will be engaging only licensed contractors).
They will most likely charge on a % of building cost rather than an hourly rate.
Get them to provide a cost plan/estimate with a maximum price. Find out what other work they have supervised, check references, check Vcat for any complaints lodged or judgements against them.
They should be able to discuss the best method of doing the work either as a lump sum (ie using a builder for a fixed price), cost plus, schedule of rates etc.
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February 24, 2009 - 12:16 pm
pitto wrote:

Clearly having knowledge of the rental valuation for exactly the same type of property and then withholding this information from another owner would be held to be in breach of this duty. That's not to mention that not doing so is in breach of DHA's customer service charter and morally debatable from a government agency .
Cheers
Pitto, this is only a valid argument prior to other owners accepting the rent proposed. Once there has been acceptance, there is no further obligation on the parties to revisit the rent. With the rent review process 'time is of the essence', if an objection hasn't been made then the offer is accepted, if you have objected but your neighbour has not, then your process does not affec t your neighbours. There is no duty owed to the lessor where the lessor has accepted a review and other parties are objecting to the review, subject of course to when you have lodged your fully documented objection identifying other market rentals.
However, those rentals which other have identified and the lessee has accepted as comparable market evidence, may be considered in future rent reviews if those rents are still current and reflective of the market.
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February 24, 2009 - 3:57 am
Pitto, it is not up to DHA to increase the rents on all properties if you have successfully argued an increase/difference in valuation on your property. This is not in the best interest of the tenant (DHA has sold you the property and is leasing it back from you with an agreed mechanism for rent reviews).
If the adjoining property owner is unaware of the rent review mechanism or is satisfied with the review that they have recieved, then they will not need to get an independent valuation done. The timing of the rent review may differ from yours, the terms of their lease may also differ or they may not be in a position to argue for a small net increase in rent (after the cost of valuers).
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February 23, 2009 - 7:21 am
Generally it will be at the point where you register the new titles – that is because as the title details are to change, you need to seek the mortgagee's consent in order to register a new title and to provide finance over those two new titles (assuming one is to be extinguished) or at the time that mortgagee's interest in the land is to be changed.
The value of each property will be assessed in accordance to valuation principles – by direct comparison using comparable sales data from the area.
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February 23, 2009 - 3:01 am
Should be available from your newsagent or contact the Dept of Fair trading.
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February 23, 2009 - 2:56 am
You must wait until settlement as you do not own the property until such time.
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February 22, 2009 - 1:26 pm
Sorry to disagree Scamp, but until about 2007, prices were generally on the rise in Sydney but have over the last 1-2 years entered a downward spiral bringing prices back to 2004 levels. Hence affordability being the best that it has been in 5 years (according to all of the news articles).
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February 22, 2009 - 12:37 pm
You'll probably need to allow at least $1500-$2000/m2 (it doesn't go very far). Reno work is more expensive due to the bitsyness of the work, difficulty in access, additional care required not to damage existing structures, marrying into the existing building etc.
You may need to refer back to your solicitor/title documentation with regards to the presence of a covenant affecting the common wall, there may be a right/requirement not to affect/damage the common wall, in which case you will need to get the adjoining owner's consent (it would be a good thing to get anyway as they will be most affected by the work).
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February 20, 2009 - 12:42 pm
SH, houses in previous land releases have depreciated somewhat as compared the newer properties in new areas hence the price difference. The land itself is quite possibly more attractive hence worth more than in the newer estates (also better located and possibly larger). As services, amenities are developed around the older areas they may become more desireable to purchasers and the rate of depreciation has stabilised (it is very steep in the first few years). When compared to newer but aging housing in the next land release, these houses may have already slowed the rapid decline in depreciation.
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February 20, 2009 - 3:55 am
Tye,
I mostly deal in the capitals & major east coast regionals where incentives were rife. However, going back a few years I was able to negotiate substantial non-cash benefits eg 1 yr rent free, construction to Lessee's plans & more in rural Qld.
I know Albury reasonably well, I pass thru at least 2 – 3 times per year. Even though it is a regional, I would still be expecting about 10% yield.
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February 19, 2009 - 10:43 pm
http://www.domain.com.au (Sydney Morning Herald & associated websites) shows all capital city auction prices for the previous week. Sunday papers also has a wider range of sales results.
You could also try your local community newspaper website.
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February 19, 2009 - 10:40 pm
lifeX wrote:
The ATO base Capital Gains/Losses on an event.
Ie: the financial year you sell an investment property triggers the Capital Gain event and must be paid that year.
The only hope you have is that in the same financial year you make an equivalent capital loss by selling an investment that lost money.
For instance if you lost a heap of money in the stockmarkets this year, it would be a good year to bring forward the sale of an investment property. This would result in a tax year where they may cancel each other out.
Capital losses (such as sale of shares at a loss) can be carried forward indefinitely and offset against other capital gains, so timing of the sale of assets realising capital gains should occur in the same year or any other time after you have incurred a loss.

lifeX wrote:
I heard the americans pay no capital gains on the sale of their own PPORs but can still claim any house repayments as a deduction against their income… and they still crashed the system. Go figure.
They may pay no cgt but they do pay land tax on all property PPOR or other (swings and roundabouts).
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February 19, 2009 - 1:03 pm
Inner West – a lot more DINKs (but with absolutely no chance if you get what I mean). How else can you sustainably afford $1M+ median prices?
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February 19, 2009 - 12:59 pm
Try the ATO website or a quantity surveyor/cost planner.
Depending upon what the question is, a qs will be able to disect the proposal and find a lot more depreciation than you could imagine (some items have a very short life in tourist accommodation eg carpets, furniture etc).
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February 19, 2009 - 12:55 pm
Chris White wrote:
All commercial properties are cash flow positive at the moment.
How about a 10 year lease with a 6 month bank guarantee at 9% + GST + outs. I may be able to do something with that.
Whilst you're banging it on thick, how about a strong covenant as well, maybe a national distributor or a publicly listed entity…..
Tye,
it is easy to achieve 7% on Sydney industrial at the moment, I'm with Chris on the cap rate being much higher. An article that I read was pointing toward returning to 1990's yields – we're in for a lot more pain yet (for comm/ind/retail), this will equate to at least a 25-30% price reductions.
Extending on a discussion today, the handouts given away by developers by way of fitout contributions (super easy credit) has only contributed massively to wildly overpriced assets as valuers (property owners and investors) have not been viewing effective rents but the grossly inflated rents required to recoup the contributions which have been given away (and hidden in 'side agreements'). It is only now that the developers do not have the cornucopia of funds for the fitout contributions that rents will commence to fall and that yields will be more reflective of effective rents as there are few contributions to be flushed out.