Hi, interesting.9 years ago, I was in the same position. I thought the minimum would be 1 house to live in, 2 houses to collect rent on. Subsistence living.Then I was told someone on the Commonwealth pension would get $18K p.a. & I thought "Bugger, why don't I wait for the pension? I work like a dog just to get $12K p.a. after I pay off all my…[Read more]

Hi, Battleships made a valid point. House price has a replacement cost. I feel the current price of housing is part of the inflationary situation & cost of money. It costs me $240000 now to build a house where pre GST in 2000 even 2002, it would have cost only $160000.Unless everyone who needs a  house has one, the demand will still mean we need…[Read more]

Hi Kim, not a lot I can do to help except to reassure you you're OK & not alone. I almost told the St George bank manager to jump off a cliff.Same thing, low end valuation & heaps of unhelpful obstructions. Yet, my houses are almost at completion & 2 more projects are due to begin, I may add at the same snail's pace!I might also tell you that 12…[Read more]

Hi, 6 months pass very quickly. You might not have to give up the grant. If I were you, I'd check these issues:1) The date of ownership can backdate to the day building begins. You can consider that it's PPOR from that date esp if you can't claim tax deductions on expenses.2) 6 months pass very quickly! 3) You won't need to pay CGT when you move…[Read more]

Hi Dacium, good job locating an opportunity.The concerns:1) End value: if you build 2 new houses on 750m2 blocks, each house will have to be sold for $400K+ to turn in some profit.2) If you can build 3 on 500m2 blocks, each house will have to sell for $350K or thereabouts.Your holding costs depend on the time it takes to complete. These numbers…[Read more]

Hi Alex, more 'stuff' for you to digest.1) Minimum block size. Yours would be 375m2 each if the block is regular. Doable in most urban areas but check with local council, if you haven't already done it. The frontage is important. The minimum frontage for sub-division is around 24m for detached homes. In near city areas, you can get away with 2…[Read more]

Hi Alex, congratulations on your progress. Sub-division & rebuilding multiple units on the existing block is a quick way to get increased equity. However, some points for you to consider:1) Time costs: it's better to be VERY conservative on how long the project takes to complete. I was told it'd take 1 year & I doubled it & it's going to take 26…[Read more]

Hi, thanks for your responses. I'll follow up.Kum Yin

Hi, I thought that it sounded too good to be true but having looked at it for the 1st time today, it might be useful to me.

If I have 5 newly developed houses that I’m very sure have potential for capital growth, then I want to hold them as rental properties for 5+ years because after that, the GST no longer applies. CGT is much less painful than…[Read more]

Hi Devo76,
You’re doing what I’d be doing for exactly the same reasons. Again, your results will be a tad slower because the boom has been & gone. But no problem. All through 1999 to 2002, hardly any gain was made in my case. I was still happy to hold for the forced saving & the tax benefits. I was going to live on the rental income when I retire!…[Read more]

Hi,
1) The yield 6% or 5.5% is good, higher than what’s normal for Adelaide.

2) For country towns, there’re other factors to consider. $235K is replacement value for houses, anywhere in SA. If there’s no potential for capital growth, then the rent is all there’d be.

3) Port Pirie for instance, isn’t likely to achieve the same median price as…[Read more]

Hi again,
1st, Navyboy, no sense selling to buy again. Either don’t buy, save into an offset account or buy either to build or a new house ready for immediate rental. Your 2 IPs are low priced, sell & the agents/tax man get all the profit. If your tenants are not unhappy, why spend extra to get almost nothing in return? Renovate only when you have…[Read more]

Hi Dacium, many will agree with me when I scorn your statement “If you don’t own a PPOR, don’t invest”.

It should be reworded,
DON’T OWN A PPOR, INVEST!

Very few people make money by saving and not investing.

The only problem of course is that the investment must be a good one.

Cheers,
Kum Yin

Hi, especially Dacium,
63K pa & $295K mortgage is not bad, depending on the tax situation, especially if the rental is not part of the 63K.

Navyboy, what is of concern is not so much the total debt but how you manage it.

It’s the type of property you own. What will you do if you have vacancy?

Your properties are likely to be in Elizabeth,…[Read more]

Hi Peter, I wonder if you’ve visited Playford North?

I don’t own a car & as far as I know, getting there can be rather difficult. I’ll check it out today.

I’d wanted to look at the builders’ display homes at Playford so I might do some recciing.

The rental wars in the news are mostly limited to places like Parkside where there aren’t many…[Read more]

Hi, for those who haven’t visited our fair state, the Northern areas are hot & arid and flat and dusty whereas the South is nearer the Great Southern Ocean where the sea breezes blow.

Christies Beach is a suburb with growth potential because it’s probably one of the last beachside suburbs within a 15 minute ride from the CBD (I tried it on the…[Read more]

Hi, great that you’re so enthusiastic. Not to pour cold water but watch these points:

1) The yield: do you have a secure lease for the weekly rent of $310? What about vacancy rates & waiting time for tenants?
2) Outgoings: insurance, rates, management fees etc?
3) Interest rates can change.

Do you have enough room to pay down the debt? It might…[Read more]

Hi, much better bet than Elizabeth. it’s beachside & transport’s convenient with the train & Noarlunga Centre nearby. In fact, prices have gone up more than I expected. Christies Downs is not as good though. Port Noarlunga & Maslin Beach also look good.

Seaford prices have gone up as well but I noticed rental is up as well.

Good luck,
Kum yin

Hi again, missed the fact that you want to buy & occupy your own premises. A bit different in scenario to me.

I always thought that I’d rent my business premises rather than occupy my own shop. The reason is my rent is tax deductible.

Therefore, unless you are the landlord to your company, it might be worthwhile to buy commercial property & rent…[Read more]

Hi, funding for commercial property is quite difficult. If you’ve fixed/secure income, you’d be alright.

The current rate for commercial property is 6.5% to 8% of yield. Sometimes the property itself may be just very ordinary.

The lending criteria for commercial property are far more relaxed now than just 2 years ago so you might be able to work…[Read more]