Hi Elvisfan,

Bowen is a town 100km approx north of Mackay, this is where a some of the new port action. its had a lot of false starts so to speak. There is a LOT of vacant land in Bowen that people just cant sell. I would be surprised if there are good solid long term opportunities there.

The Bowen Basin is completely different. It starts south west of Mackay and runs down to Emerald, Central QLD. This is where the majority of Coal mining action is.

Bowen and the Bowen Basin are very separate places and very different property markets.

Love it!

although as an ex agent theres nothing more satisfying when you do have other people/offers on the table and people think youre lying because your an agent then they call you 1 week later when they see a sold sign and ask why you didnt tell them!

Consider it $880 on a well learnt lesson! As JDL will say, it’s nothing on what the potential capital gains may be, when you purchase a GOOD property in a GOOD area! I think Qld will fair quite well in the coming years with the mining industries strength. That isn’t to say other areas won’t. Maybe they don’t sell stuff in NSW? If you are comfortable with an area than that counts for a lot also.

I want to explain negative gearing and CF+ as if what they have told you is as you just explained, it is incorrect. Let’s say you buy a $450k property, you rent it for $600 per week, after all expenses it costs you about $5000 per year to hold before tax. You then depreciate $15,000 in the first year (assuming its new). Now you have reduced your tax by $20,000 per year of which you receive a rebate at your marginal rate. Let’s say it’s 30% tax you are paying. You will receive a $6000 rebate. Making your property CF+ whilst reducing your tax.

Some people buy into these strategies of having to negative gear to reduce their tax and that’s the best way to buy an investment property. Whilst this is fine to do if the property and costs suit your portfolio and or strategy, it is not the be all and end all. What you are really doing is decreasing your income by $200 per month. Whilst many label this as “savings” it is savings that someone else can be making for you if you buy the right property, not you. By reducing your income, you reduce your borrowing power, and when you reduce your borrowing power you reduce your ability to buy another investment property. If you had 5 properties all loosing $200 per month, your down $1000 per month! To me that is not a viable way of investing in property.

Just my thoughts for you Henry.

Henry,

expensive or not, it is un-necessary. Our company for example, sells investment properties, we charge an REIQ capped real estate commission. A mortgage broker makes a commission and quite often a trailing fee from the bank, an accountant charges you by the hour, a lawyer charges by the hour. All of these fees are fair and reasonable, but to then charge the client to do the same job that 95% of the industry is doing for its regulated/quoted fees as standard is just plain rich. Sometimes, companies may charge a project management fee if they are managing the building process for a new investment property, however this is not a house and land package, you are paying for an end product which is what your stamp duty shows.

Also if you are buying a new house, why not build, save a lot on stamp duty and any interest paid in the construction period is a tax deduction that financial year.

The Gold coast would have to be the worst place in QLD to buy in investment property. I am qualified to say that as I deal with properties all throughout QLD.

Why go backwards $200 per month when you can go forwards $200 per month? I just dont get it? unless you have heaps of cash to burn for the sake of it?

maybe a marketing fee? theres no maybe about it. They will walk away with $40k no doubt! just for sepnding 30 minutes to show that if you buy a property every 2 years using compounding growth you will be a millionaire.

I feel it necessary to respond to this post post so here goes if your interested
http://ppiqldtour.blogspot.com/2011/08/apples-with-apples-and-oranges-with.html

I guess it depends on what they right the invoice out for! you cannot claim solicitor expences, it must be capitalised so i dont see how it is claimable if the fee was described as what it really is (that is assuming it is a “project management fee” considering it is charged for each property purchased).

Interested to hear an accountants take on this, but I agree with you Derek

Hi Henry,

this would be correct, but it sounds like they are saying that you are only getting the depreciation because of them? Depreciation is something that will be applied to any property you buy, especially new. The fee is something that a few places charge for being a “one stop shop” where in fact there are many places that dont charge this fee and can still provide the same service. If they are selling you a new property they are, without a doubt, charging a commission to the developer/builder also. I am not sure how there company structure is set up, but if they organise the finance, then there mortgage broking arm will be making a fee also, same goes for insurance etc.

If you are looking for a larger firm to help provide direction I personally think that Destiny are great, they are a buyers advocate agency. I have sold properties to clients of Destiny and they do the best for their clients, not themselves.

In essence, even though you may get the costs of the fee back after you have applied depreciation to the property, you would get this anyway. So you are still paying the fee out of your pocket and on top of what it would cost if you didnt use them. If it is tax deductible then you will get back your tax rate on that amount. so if its $8700, and you are paying 37% tax, you will receive 37% back at the end of the financial year if it is a tax deduction.