Hi, the real story is this. In February 2007, there’s a sudden spike in house prices across all suburbs in Adelaide.

The rental yield is 4.5% for most houses. However, the prospects for rent increases is very real.

I went to look at a house in Elizabeth Park last weekend. Even the agent was surprised at the crowds of people who streamed through…[Read more]

Hi, I agree with Simon, against the advice of my nearest & dearest. Being on 0 gearing as I was, it was really necessary for me to look for -ve gearing.

What makes the venture successful of not depends on the choice of the target property.

I’m working towards 50% LVR and exactly neutral gearing, doing a balancing act between the +ve and -ve…[Read more]

Hi, talk about paralysis! I feel it comes from information overload.

I only found this forum after I ‘retired’ and Christmas 2005, my sister gave me a dire warning about my ‘over-exposure’ to the property market.

If I had taken the time to gather the info, I’m not sure that I’d have bought anything at all.

Not knowing anything and like a…[Read more]

Hi all, been following this thread with some amusement. At last, my 2 cents worth.

Peter & others of like ilk, houses are commodities, just like bananas. You don’t like the producers’ prices, grow your own.

Investors as such, do not push up prices. Don’t they wish they could!!

I’ve discovered that the government is the biggest owner of land &…[Read more]

Hi, I don’t know about the Western suburbs though I did look in Brooklyn Park 12 months ago. Went to the auction at May Tce opposite Kooyonga. The price was a bit too high for me to seriously consider it.

I bought at 3 locations, one at Taperoo (May 2005), another at Clapham (Nov 2005) and a third at Blair Athol (May 2006).

Taperoo (2 old shops)…[Read more]

Hi, the Melbourne property looks scary. What % yield is $340 pw on $540000?

Just my thinking aloud.

Good luck,
Kum Yin

Hi, please be extremely conservative with costs. I’d look at it this way. If it costs $X in total, then every day, it’d cost me 8% of $x divided by 365.

And do not be misguided enough to say that it should appreciate by y%.

Good luck,
Kum Yin

Hi, I can see your rationale for wanting to sell to access the equity + profit as this qualifies you for CGT exemption selling PPOR.

The rest of it depends on:
1) selling costs – how much will it leave you & will you be able to buy IPs with better yield than the current house
2) what rental you can achieve if you don’t sell

I’m curious enough to…[Read more]

Hi, sounds like you got yourself a deal with immediate savings already!

The part that’s uncertain is the gain in price – that depends on whether your purchase price is higher/lower or just right.

Good luck & well done!
Kum Yin

Hi, it’s most important that your choice of IP be right. In today’s climate, it’s well nigh impossible to buy something & straight away get +ve return.

The numbers need to look like this:

IP cost = $300000
Interest = $24000 p.a.
Outgoings = $4000 p.a. [can be more, unlikely to be much less]

Therefore, the total tax offset can be calculated on…[Read more]

Hi ,
I should think the 1st step should be to buy to rent.

Couple X:
Combined income = $75000 p.a.
Rent = $260 p.w, $13520 p.a.

Buy IP at almost exactly same rental yield

IP Cost $275000
Loan = $290000
Interest @8% = $23200 p.a. Outgoings = $2500 estimated
“loss” = $12000 approximately – tax offset $3000+
Depreciation = $4000 approx

Keep the…[Read more]

Hi all, follow up.

Like Koulizos, I thought that prices couldn’t go up anymore & sold all 4 of my houses in 2003-2004 here in Adelaide. Good profit but dash it all, they could still go up! They went up another 30%!

I’ve since re-bought about 1.5M worth of property & am on tenterhooks.

I wanted to tell the young wannabe property investors that…[Read more]

Hi James, woo… 15K after on paper losses can be serious -ve gearing over time.

Either 1) pay down the principal [this is doing the hard yards]
2) sell @ small loss/ affordable loss

Long ago, with my 1st house, prices went seriously backward & stagnated for 5-6 years. I know now that I should have taken a loss but at that time I was young &…[Read more]

Hi, I’m living in a property exactly as described. The reasons I bought are:
1) It’s a wonderful suburb to live in
2) Properties take only 3 weeks to sell
3) My house cost half the price of those further up the hill, away from the railway track
4) My block is 1300m2 & sub-dividable

I ‘m extremely ‘lucky’ to be correct in buying into a rising…[Read more]

Hi, my five cents worth.

Has anyone noticed Adelaide prices spiking 10-20% in February 2007 ACROSS ALL SUBURBS?

I work numbers based on current value and NEVER work on the assumption that they increase 7% every year.

Lack of affordability in itself has no power to control the price of housing. Only the production cost can do that. I was young…[Read more]

Hi all, I’m in roughly the same position @ about 45-50% LVR, retired with no income other than rent.

My current lender does indeed start with a ‘c’. I told the ‘n’ to jump off a cliff & borrowed from a private lender [10% interest balloon repayment in 2 years] And surpise, surpise, when I already had the funding, ‘c’ offered to refinance me & of…[Read more]

Hi Julie, thank you for the info. Don’t worry about the length. I love the detailed explanation & I want to express gratitude that you so generously share your knowledge.

I’ve always left it to the design consultant who changed my bedrooms in the North to living room opening onto the yard. Now I understand why!

We really do live & learn, thank…[Read more]

Hi Mcgregor, I think you may be right about Christies Beach. At first I thought $280K a tad high but I looked over the weekend & am amazed at how much Port Noarlunga & Old Noarlunga waterfront properties are going for!!

Aldinga Beach has had more devt but I think Christies Beach has more capital gains potential because it’s had far less…[Read more]

Hi, I agree with Megan. Nothing compares to just doing it.

I decided that building was the only way to buy a house for under the median price. So I found a block with 2 old shops on it, zoned R. I was sensible enough to pay a surveyor $300 to look at it & talk to council but his report got swallowed up in the post & I never received it. I was in…[Read more]

Hi Sean, didn’t mean to doscourage you. My 1st naive foray into devt looks set to deliver some profits. And I don’t have your skills, building, renovating, earthworks etc. However, I have the reverse, financial resources.

A responsible person will tell you that the last is very impt. I have had to pull out cash from other property & borrowed from…[Read more]