Forum Replies Created
its not worth managing your own…how bjsaust has his set up is the ideal way. You should pay about $2500 – $3000 to have one set up, if you are buying property through this you can find some developers who will split that fee with you to buy off the plan. Then you should pay about $1600 – $2000 per year for accounting for it.
If you do it yourself and stuff up your fund becomes non compliant and its just not worth going there.
Its not the type of thing that is even worth going alone, just like property investing. Why do it when for a reasonable fee someone can do it for you and you can focus on what makes you more money.
in most building contracts a daily penalty amount should have been negotiated to compensate for a certain amount of interest when the builder goes over his quoted time.
definitely time for a lawyer/solicitor to put pressure on the builder here but I cant recommend any.
The builder should be running at a loss until he receives your final payment as an incentive for him to finish the job. If they cant finish the house they may be heading to liquidation…not to freak you out! but definitely get pressure on them. Firstly try calling them and saying that if they dont get it done ASAP that you will be placing them into liquidation as a part of your compensation.
bit of a bluff but they dont sound too smart so try it first then call a lawyer ASAP.
the latest figure released yesterday is $1.20AUD per tonne of coal produced.
agreed with Terry 100% here also. Don’t pay the loan down, just use the offset account. It only makes sense
Sorry for the delayed response.
I may be biased and call me to have all my eggs in 1 basket but i have made over $1m in the town of Emerald over the last few years. The reason for this is that house prices are still very affordable (although going up quickly). The reason for choosing this town is that it is not dependant on “hype” not everyone knows about it and it isnt published in the magaines all that often. It is a true diverse regional centre with mining and agriculture at the centre of it. The people who move to the region move for the long term due to lifestyle AND work. not JUST work like chinchilla where they will eventually move away once they have done their “mining stint”. capital growth has been very high over the last decade and looks set to continue.
I could go on forever but this is a long term stable investment environment which is overlooked and should be considered more so than those towns that will be affected greatly if 1 mine changed its course of action etc.
PM me if you want any more info
Cheers
exactly what JacM has said.
it is a capital expense and cannot be claimed until the property is sold. However if you have not paid it yourself then you cannot claim for it. The seller will make this claim when he files his tax return once the property is sold.
May I ask why they are paying your stamp duty? isnt that the situation of a desperate vendor selling a property that no one wants?
try to gain an understanding of the vendors position first. this will help you get the timing right. I agree with gmh454 just sit back and wait. Sometimes relationships with agents aren’t as valuable as people say. Agents like getting a new buyer out of the blue who is quick to act. Maybe try having someone else put the offer forward once you have seen the property.
whatever the average time on market is just wait for that to be up or nearly up before presenting but make sure you are first to view.
Screw with the agents mind. Dont ring them back after the inspection either. view….walk away…keep an eye on the net with price, even drive by during an open home to see how many people are looking…you can view the hits on a realestate.com listing, do this and then make an appointment with the agent once the average time has come past and then make your offer. You will win some and loose some this way no doubt but I am sure overall you will get one.
Are you buying for investment? have you considered stronger areas perhaps where market price is fairly standard but values are on the rise not in a slump?
apart from price what terms are you offering?
JT7 wrote:fredo_4305,I wouldn’t be too concerned about Queensland mate. The financial year 2011-12 we are going to see some massive investment due to the resources industry expanding. Queensland should display the strongest growth economically out of all states. Queensland predicts strong exports, a big jump in investment and household spending will drive gross state product up by 5% in the next 12 months and even reach 5.25% in 2012-2013 (A. Rollins, June 25-26, 2011, ‘Mining largesse inconsistent’ The Australian Financial Review).’
I bought in regional Queensland 2010 and will look to buy again in 2012. Great time to buy because the majority of uninformed investors out there don’t understand the underlying fundamentals. Again due diligence applies. I think it may be some time before Brisbane picks up but there are some great regional markets out there.
Jack.
Jacks 100% right here I believe.
Excellent regional areas, population forecasts higher than any other state is Aus and unprecedented levels of mining investment. Regional QLD will receive this investment over the t=next 2- 4 years with the other states and capital cities to follow after. Property has periods of being flat, Melbourne is going there that phase now and is predicted to be there for the next two years potentially.
You would have gone into these investment with a 10 year view i would imagine, if you purchased even 6 years ago you should be happy or if you’ve purchased more recently then you have obviously taken advantage of the downturn and seeing it through and riding it out will be well worth your while.
PPI
in Qld it is about 40-50k as there are so many non-effective ones living off a retainer.
At the moment they are not earning much unless you are really good as the property market is in general pretty flat.
It is easy to earn over 100k though. The average commission charged to the vendor is about 2.5%. Their should be a 50/50 or 40/50 split between you and the principal.
on a $500,000 house approximate commission would be $12,500 plus GST. You may receive 50% of this if you are in a good position. Minus superannuation (9% soon to be 11%) and your income tax bracket. How many you sell depends on:
– You
– Your principal agent (exposure, credibility, training etc)
– The market you are working in
– Your knowledge of the market. Its not a job you can bluff, in depth knowledge of the market is a vital key
– I’m sure theres more factors alsoHi property investor 1
the first thing that is not clear in peoples minds is that their are two coal industries in Australia. 1. The coal power plants and the mines that produce coal for them and second is the coal mines that produce export quality coking and thermal coal.
In the first industry mentioned, it will be adversely affected. A place of good example is Morwell in VIC. They mine brown coal and burn it on site basically which produces electricity that victoria uses. This is one of the dirtiest operations in the country from what i can see. This industry will be taxed at the $23 pt as they are releasing carbon into the atmosphere.
The export coal operations that we see in QLD and NSW wont really be affected as the coal is shipped to the coast, exported and burnt offshore in the countries of use where there is no carbon tax imposed. So the mines will only be charged for the carbon that the extraction process puts into the environment which is minimal. This is the trucks, machines etc that are used. To give you an idea of the implications in the export coal industry, they pay about $24.20 per tonne in taxes, royalties etc. After the carbon tax is in effect the mines estimate they will pay approximately $25 pt. so for each tonne they produce and export they pay approx $.80c for the carbon pollution.
It is vital to remember that the Labor government have to pay the debt they put us into off. They are relying on mining to do this for them. They are not about to bite the hand off that feeds them. Even Bob Brown (who is anti coal mining) said that unfortunately coal mining in this country will not stop for the generations to come at least. And he is correct.
Does this help?
Im not privy to the NZ market but how much growth is it in for? Its not about whether you can pay a place off quickly or not, its how much capital and rental growth you will relieve over time.
Areas in Australia are in for some excellent short term growth over the next 3 – 4 years on the back of a potential 3.6billion worth of private investment. The rest of Australia should follow after this time.
PPI
Johnny
The mining industries and regions are some of the strongest areas to invest in when it comes to residential property. An exit strategy is key, look for areas that have a stronger industry base than Dysart is my suggestion. In the coming years I believe that regional QLD is in for stronger growth than more traditional investment ideals.Also it won’t make a difference to the capital growth of a property whether you can drive by it or not.
JA
Property Investor 1
make sure that when you look in the Surat basin that you dont invest in an area that has a higher construction workforce than running workforce. In the LNG industries the figures are around 45-50% less long term workforce than construction workforce. Whilst the next 5 years might be GREAT! you may find that 45-50% of employees will not be there by then. Although the mining will be continuing the workforce to runt he operations is a lot less than the workforce needed to get it running.
Most investment place wont point this out to you, but you could be screwed in 5 years with a property that may not have grown at all in long term values.
Their are many more viable stable towns to consider than these if you want long term. If its short term than that great…you just need to rely on the greater fool theory in 4/5 years time!
research the companies that are investing here and look into detail into the EIS.
Im not anti mining regions…I’m Pro them! i have 15 properties in central QLD and will be building another 10 next year to hold..just pick your areas
JA
Hi Henry,
Comments and opinions may vary depending on what you are trying to achieve from these companies. Are you just wanting sound advice or are you looking at investing on a long term basis with whichever company you choose?
Each company I assume will have their opinion on where to invest. Whilst there are many truths behind opinions out their, you have to realise that you are talking about capital growth…. opinions is all their is to go off sometimes. They will also implement their strategy, which is THEIR strategy…this may not be yours. Make sure that you know what youre comfortable with. Remember they are also makign LARGE amounts of money from developers/ing and builders etc. Just make sure you are not paying them over 50k to buy a house from them ( I mean thatin regards to management fees, commissions from builders etc)
Let me know if you have any specific questions and im happy to help.
Josh
QM wrote:Hi,Looking at the Gladstone area including Agnes Waters for investment or if all works out, eventually to live. Either way, heard it’s booming but still cheap to buy. Located south enough to avoid the stingers but north enough to have a surfing beach plus a ferry run to the reef. Mining is the industry that’s booming out there …is this all true? Am planning to take a visit there in the next month. Hoping the area isn’t being over-marketed like another “Hervey Bay” -nearly fell for that one! Any feedback would be most appreciated.
Hi QM,
Gladstone is looking good for years to come. You will be fine for the next twenty years at least….kind of as far as ive looked with projects etc. Stage 1 of the LNG rollout will / is impacting gladstone, stage two will be rolled out in approx 10 years time and will futher impact the bowen basin. Still make sure you buy smart in Gladstone, but overall it has a lot going for it.
PPI
agree with xdrew…It may be easier for accounting purposes to have a separate account for your IP. If you do this just create another offset account and have offset against you PPR.
Also just a tip, make sure that the managing agent disperses any rents received on a weekly basis (or even daily if possible but not many do this). That means that the rent can sit in your account reducing your interest rather in the agents trust account.
Hi Terry,
whilst I am not retired (I did for a week until i got bored), I invest in areas with higher capital growth and rental yields than the areas you mention which help me build a larger property portfolio. If you are after cash flow than you want to achieve as much rent as possible obviously. From Ballina to Noosa rental yields are very low and so has capital growth been. I live in Noosa and am constantly assessing the situation in south east Qld for investment. You may find stronger growth in Qld than NSW. ABS predicts 71% population growth in NSW compared to 161% in Qld in the coming future. So I would put my eyes on Qld over NSW when it comes to investment purposes. The majority of this Growth will be in regional Qld due to growth and longevity of the mining industry.
In regards to buying something to retire in, it depends if you know what type of home you want to retire in. 10 years is not the largest window to work with, so its important you get the growth at the earlier stage of that period rather than later so you can buy another property if you wanted or needed for future cash flow.
I own and sell investment properties all over Qld so if you need advice on any particular area I am generally quite over it all but not so much NSW i will admit.
Hope this helps
Josh
moxi10 wrote:Hi everyone on this thread. I've been researching my next property investment, and have found this particular thread interesting, so I'll add my question to it. Does Blaclwater flood?? Coalstar, if you're out there, I have noted your interest and apparent knowledge on the subject, so perhaps you can reply? I work in a coal mine myself, in the Hunter Valley Nsw, have a couple of IPS there, and another in Gladstone. I note that propeties for sale in Moranbah and Dysart are very scarace, pricey. but achieving fantastic yields. As Coalstar has suggested in the past, I think Blackwater may play catchup to some extent, but in any case, properties there are currently returning very attractive yields. There are also more properties available, and at lower ask prices than it's northerly neighbors. I realise that there are more mines on the doorsteps of Dysart, and particularly Moranbah to push their prices up, but there is still a lot of activity around Blackwater, and so I have set my sights there. I personally feel fairly confident about the continuation of the current mining boom, and the Surat and Bowen Basins are also in line to benefit from significant international interest in LNG, so I see potential for capital gains and a continuation of high yields. I have talked to some agents and developers on the phone who assure me that Blackwater does not flood, but i would appreciate confirmation of this advice from anyone who can varify.Hi Moxi,
Blackwater does not flood. Rents in Blackwater are quite high already, you will see demand increase in Emerald more so as three of the largest coal mines in emerald plan to get into gear just 150km west of Emerald. I am an ex local to the area, am in the area every two weeks for my clients and have 15 IP’s in central Qld.
If you need any more info feel free to PM me.
Josh
I invest in…and sell (just thought id let my position be known from the start) to my clients properties in regional Qld where capital growth will surpass that of the capital cities in the coming years. That is not just my view, it is the view of the majority of the big 4 banks. net rental yields are around 7% for a stable long term area, and capital growth has average 23% pa over the last 10 years.
My clients buy a 4 bedroom, 2 bathroom, double garage house for around 450k. They then rent it out for $600 per week. It is technically negatively geared before tax (to the sum of $7000) after you consider management fees, rates, any vacancy rates etc. However depreciation for the first year is $17,500, then $16,500 and so on as the years go by. Rents rise by about 10% per annum also. By the time tax breaks are applied to the negative gearing with the out of pocket expenses plus depreciation you are receiving $9000 of tax back. so by reducing your taxable income you actually are making the property positively geared. Not to mention construction interest in the first year is a tax deduction, compared to paying a large amount of stamp duty which is not deductible if and when you sell. (you mentioned you plan to never sell so you may never be able to deduct your stamp duty). Oh and the Qld government will give you $10,000 tax free for building a new property in the next 6 months.
Does this help? I know it is biased advice but it is a proven strategy that my clients use to help build their property portfolios quickly. Remember every negatively geared property you buy, it reduces your income which reduces your borrowing capacity to expand your portfolio.
Regards, Josh
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