Ben,

The developers on this site will probably be able to give you a generalised answer to this. Maybe you could just ask in the Development section, how much it would have cost to build a unit/house 10 years ago in a particular area and see what they come up with.

And you’re right about not getting a depreciation schedule before you purchase- they cost >$600, so doing an estimate in your head first is a good idea.

As Derek said, Scott (depreciator) will probably be able to give you an idea of what it cost too.

kay henry

Well, all one has to do is go to realestate.com.au, go to the state of Victoria, go to “priced to $200,000; tick “include surrounding suburbs”; go to “view by price”, and a million pages come up. Most of the first, say, 6 pages, are boat sheds, car parks, shops and trailers. But once you get past that, there are a heap of properties under 100k.

kay henry

brendon, it really depends on what you’re looking for. A mortgage broker can tell you how much money you can borrow, but would be unwise to “advise” you in your general affairs- one has to be licenced to advise.

Brendon, don’t you have an accountant? A decent accountant will look at your situation and advise you, and won’t be trying to flog off a product to you, although they might have their own biases- but who doesn’t?

If you have any general questions with regarde to property, you xcould always ask on the Forum and many people will be happy to give you an opinion- for free

kay henry

freedomfighter,

It is suggested that if you spend the extra $15-$20 a week on petrol, you won’t be spending it elsewhere- opportunity cost, I guess… it all balances out.

You asked about people’s situations… I walk everywhere and my car sits in its little cage. I used to commute- an hour and a half to work each way- by car or train… and then I moved closer to my workplace, so now I walk there. The train tickets or petrol were costing me more than actually moving close to my workplace- in terms of money and time.

Maybe you can ride a bicycle, freedom :o)

kay henry

tsk, Monopoly. The article was from 2002, and I posted it so that people could see how the CPI is calculated.

I actually said:

“Products and services are weighted, so it may be that whilst oil prices have risen… the cost of fruit and vegetables has reduced- go figure.”

I was suggesting that now, while oil may rise, other goods and services might be cheaper.

kay henry

If people look at 2004, and pretend we have no property… then what would we do? Negative gear or positive gear? Let’s look at the Australian market as an example.

Most properties are not achieving 10% yield- except in mining towns (higher incomes of tenants) or remote areas. (perhaps a high unemployment rate and rents are limited to ratio of benefits). So what are we to do?

I think a retrospective viewing needs to take into account a time when there were yields AND groeth, and when the positive gearing climate was different than today. One could buy in major regionals and gain the yields- not so today.

So today we have the choice of a 7% yield (for example) in a metropolitan area, for a newish property… or a 10% yielder in a remote area. Balancing employment, immigration, wages of tenants, and the old favourite- location… I think negative gearing is a strategy that’s worthwhile.

In 2004, growth is slowing- so it will slow for a 7%’er or a 10%’er. The way to ease the pain of negative gearing (although I’ve never found it painful- I always thought RE was about putting money into it to pay it off) is to make more repayments as a buffer to IR rises, and to use other allowances, such as depreciation, as Derek has said.

If your positive geared property is giving you $50 a week, you still have to pay some of that back in tax. My negative geared properties give me back plenty in tax, meaning I can use tax returns as basically a new deposit on a property.

Not everyone wants to buy properties in more and more remote enclaves. Buying in cities has its own merits.

kay henry

Globe,

There would be a heap of articles online about how much the expenses are on a property. Go to google.com.au and type in “expenses purchasing maintaining investment property” and go to Australian sites only. It will come up with a heap of articles for you to read.

There are also a heap of mortgage brokers on this forum, but just because you get advice/assistance from someone, doesn’t mean you have to use their services.

If you have any specific questions, you can ask on here. Globe, most of us would have bought that first IP with no clue of what we were doing, and no plan. If you achieve capital growth on your property, the plan will indicate itself- it will give you leverage to buy more.

In terms of locations… well, some places are hotspots for a few months, but there is more for you to check out that the latest hotspot- interest rates, location, costs of keeping the property, risks associated with the property, your borrowing capacity- just to name a few.

Ask away- we’re all ears

kay henry

elika,

From what I’ve read, it is thought that IR’s will rise, by probably .25% in December. They won’t rise during an election- the RB wouldn’t mess with people’s heads like that- or mess with the major political parties.

Basically, the economy is healthy, with over 4% growth, and spending is still high- due, amongst other things, to recent govt handouts to individuals, so IR’s will probably have to rise to slow down spending and debt.

IR rises are like the RE market- they rise and fall. When we read how new building is booming, or how much debt aussies are in, then we ought to expect a rise. Then of course, IR’s will rise, we will slow down our purchasing, everyone will panic, and see it as some form of govt mismanagement… but really, IR management is part of the cycle.

I think what people tend to forget is that the RB is completely independent of the govt, and they check out the overall picture, and they’ll do what is politically unpopular is they feel like they need to slow down the economy.

If IR’s do rise, it will allow, for example, first home buyers to afford a house, meaning there’ll still be markets of buyers- fewer investors, more FHO’s… comme ci, comme ca.

kay henry

Scottybe,

I speak to my accountant on property investing matters. I am not so much interested in the technical stuff (I never tend to “get it” anyway but he has a good head for trends and he’s an ideas man.

A lot of financial advisers have a product to sell, so their information is not independent or unbiased. Their services are probably “free” because they want to sell you something, and that’s where they make their money.

You could always ask any specific questions you have on here, and many people would be happy to give you their own ideas… see it as “perspectives” rather than “advice” and you won;t lose your shirt

Derek said:

“…reminds me of an ad I saw in the local paper – Want to retire wealthy? – speak to XXXXXXXXX – a financial planner with 30 years experience. Makes you wonder what happened to his retirement plan.”

hehe Derek… remember, some people still LIKE their work, and choose to keep doing it. Why do you think all those High Court judges are in their 60’s? Maybe it’s because they just didn’t receive the right financial advice- hehe.

kay henry

Yorker said:

“Are you prepared to pay for good quality information or are you content to rely upon freebies prepared by junior punters?”

hehe, Yorker… that kind of statement sounds like the worst kind of marketeering… and it makes a few assumptions:

(1) that free stuff is useless;
(2) that if if an investor doesn’t buy stuff from you, they are an amateur.

Most RE information can be found on the net for free, in some of the above-mentioned sites. I am sure if people are looking for other information that cannot be found for free on the net, then they will pay for it. But you’d really have to demonstrate differentiation of your product, Yorker, to show why it is worthwhile to purchase.

kay henry