Forum Replies Created
Lol at JacM. I enjoy it when people can laugh at themselves without getting angry and defensive!!!
PS. Keep up the good posts JacM and Richard- I love this site and learn a lot!!!!
Luke.
I would definitely not offer a set % below the asking price for every property.
The asking price could be anywhere compared to the market- it might be high as the vendors want to "try the market" as you put it, or it could be a reasonable price as they really want to sell. I wouldnt just blindly offer a certain percentage below the asking pice- I review sales data for similar properties, run the numbers to see how I think the property will perform and what return I expect and then work out what I would be prepared to pay for that property.
It might be 5% below the asking price, 10% below the asking price, 20% below the asking price or even equal to the asking price- it depends on the property.
Luke.
Webley and Glendalough are good areas I think. Sure there are a lot of units there, but have you ever been to the inner suburbs of Sydney and Melbourne??? There is still a good demand from tenants in these suburbs (but I havnt been there for a few years so I do not know for sure). They are close to train stations, have good buses, close to the freeway and are close to shops and the CBD so all fundamentals are good. I think you are more likely to get above average growth here than in Midland!!!
Make sure you check RP Data for the latest sales. A suburb report costs you about $30 so it is a small price to pay to make sure you are only paying fair market value. TIf you pay more than the market value for a property, it will take you years to make up for that mistake.
I am also with you on not wanting to invest interstate or in mining towns- that is a lot of risk for a 1st IP IMO.
Luke.
Geraldton could boom like Karratha- but probably not. From the way that the prediction for Geraldton was written, it seems a hell of a lot like speculating rather than investing.
Mandurah is probably a long term prospect. It got really overheated and has come back a long way from the lofty highs and there are bargains to be had, however growth will probably be slow for the next few years.
I dont like Rockingham for investment- It hasnt boomed like Mandurah and other parts of Perth but there are probably good reasons. If it hasnt boomed yet, then are there any reasons why it will ever boom?? There is the 'mining boom' theory but realsitically the propertion of mining workers earning large wages is not a huge percentage of the population so I do not think that this factor is enough to drive up property prices by itself.
Mandurah and Rockingham are a long way from the CBD of Perth. I know there is the fast train line to the city, but there are also so many other suburbs that are newer, quieter and closer to the city so I can not see any reason whey they will boom in the near futuer.
But then again, I do not have a crystal ball so there is no way I can accurately predict property trends. And I am not a property sceptic- I am just focusing more on established areas close to shops and transport and with a 'scarcity' factor.
Cheers,
LukeIt depends if the asking price is fair market price. Often the asking price is more than what the real estate agent thinks he/she can acheive and so they have factored in a certain amount of discounting. And sometimes the asking pice may be a little low as the vendors want a quick sale so the sale price meets or sometimes exceeds the asking price as there is competition from multiple buyers.
Or there is the case (like I have experienced in the last few days) where the vendor and real estate agent do not know that their property is listed at about 20% more than comparable sales in the area (including the house next door which is exactly the same) and have no idea why they have not had a single offer since listing the property two months ago.
It is very rare in a flat market where the selling price is equal to the asking price- this usually only happens in a bull market in my experience.
Luke.
I was told by CBA that they would refinance my loan with a line of credit taking the toal LVR to 90% and there would be no problems with LMI.
Maybe the person at the bank had it wrong, but they told me that it would be very easy to do this. It might also be your credit file that has the LMI provider scared.
Luke.
Agree with Scott.
Valuers do not set the property prices- they base their valuations on what people are willing to pay for a similar property. So really, it is property buyers that set the values, and the valuers use this sales data to estimate a value.
Luke.
If your trust provides services, then the assets held in the trust can be claimed should the trust b sued for any reason. This is generally not recommended for this asset protection reason.
Why not set up a second trust that provides the services to provide better protection for your assets?
Cheers,
LukeI am also after a RP data report for Bankstown NSW if anyone can help.
Cheers,
LukeMake it I/O with an offset account from the start. Do not pay extra money into the loan and redraw later- this will save you and your accountant so many headaches in the future.
Cheers,
Lukesorry, in the my first paragraph I meant to say "I am now in a position where I am looking at an IP with my partner using a LOC secured against my apartment as a deposit.
Luke
JayDee,
I was in pretty much exactly the same position as you a few years ago. I was new to Sydney, graduated uni about 18 months ago and wanted to buy my first property. I bought a one bedroom apartment for $315k in a good area and it has acheived about 20% growth since. I am not in a position where I am looking at an IP with my partner using a LOC secured against my apartment as a deposit.
Firstly- if you are intending on living in this apartment for a few years and then renting it out, set up your loan as interest only with an offset acocunt attached. pay any excess money into this offset account. This has been discussed at length in these forums and it is the best way to maximise tax deductability should you purchase another PPOR down the track. DO NOT USE A PRINCIPLE AND INTEREST LOAN WITH REDRAW!!!!!!!
Secondly- the $7k FHOB is a minor thing. The biggest advantage for a first home buyer is the stamp duty exemption (I am assuming that this is still running).
Thirdly- I did not save the 20% deposit for my first apartment. I used a 10% deposit and paid LMI to establish myself in the market which has been a good strategy for me.
Fourthly- I agree that a property needs to be close to shops, transport and employment in order to acheive above average growth. Walking distance to a train station is a great selling point for a property in a climate where rising fuel costs and increased traffic congestion are becoming more of a problem in Sydney.
And finally, (this is just my opinion)- It doesnt matter whether you would like to live in the property, it matters whether your target market would enjoy living in the property. I personally do not like large 4 bedroom houses with a big backyard and a huge lawn. But that doesnt mean that no-one likes this type of property and that it is a bad investment. You need to buy a property that the people in the area you are buying in (your target market) would like to live in. You are buying an investment property for the tenants to live, not for you to live. In summary I disagree with xdrew.
Sorry for writing such a long post (it is my longest post I have ever written on here!!!), hope you found something here useful.
Cheers,
LukeAgree with Richard.
Get a loan secured against your PPOR to fund the 20% deposit + costs and a second loan secured against the new IP for the remaining 80% for maximum tax deductability.
Luke.
What a wonderful country we live in when even a 21 year old labourer and his 20 year old partner (a hairdressing apprentice) can afford their own dream home!!!
You will always need to make sacrifices to buy your first home- I talk to an older guy at my work who managed to scrounge together $35k to buy his first home in Sydney in the early 80's and he had to make similar sacrificies.
As you can probably tell, I am one of those who do not believe houses are overpriced. I currently own the apartment I live in and am looking to purchase an investment property in a few months and I also have had to make sacrifices. But I believe sacrifices are always necessary, particularly if you are in your early 20's and buying property.
Cheers,
LukeCorie,
Not all lenders are the same- some lenders take 75 percent of rental income into account when determining servicability, some take 80-85 percent and some take 100 percent. Of course this all depends on the individual property and the risk profile of the lender. But I am certain that if you shop around and use a good broker you will find one that will consider more than 75 percent of rental income as this is very low.
Cheers.
LukeIf you can get finance with CBA and you are having trouble elsewhere then I would suggest going with CBA. You could then look to refinance in a couple of years once your new house in build on the new block. At least this way you will be able to settle.
Cheers,
LukeYou can only claim one main residence at a time- That is if you were living in a house that you owned, you can not claim another house as your PPOR as you can only live in one house at a time. If you move into a house that you owned, that house must be your designated PPOR.
If you do move out into your new house, you will only be able to claim interest on $90k of your loan on your 1st property. Even though your mortgage is $230k, you can not claim interest on the money that you withdrew to fund a deposit on your new house. The ATO looks at the purpose of the loan and not at the security of the loan- so even though you withdrew the extra money and secured this against House #1, because the purpose of this redraw was for House #2 you can not claim the interest as a cost against House #1.
Hope this is clear enough.
And also as a side note- There is no point trying to cheat the tax system. If you get audited and the ATO finds out that you have lied to avoid paying tax, the chances are they will prosecute you for Tax Evasion as they do not look lightly on these matters.
Cheers,
LukeServiced apartments are more of a commercial property investment and so the capital growth is tied to rental yield- as such the value will likely only rise in line with rental increases, which in turn will be in line with CPI. There is also nothing you can do to increase the value of your investment outside of these gains which is an opportunity you will have with other commercial investment properties.
The problem with these are that you are at the mercy of the managing agent- if the management structure opf Quest changes and the service they provide goes down, the value of your investment will fall as will the return as they will be forced to cut yields.
I think you are better off looking at other commercial property if you are chasing high yields, but that is just my opinion.
Cheers,
LukeMartha- you can set your account up so it automatically subscribes to threads you comment on. But seeing as you have not set that up you may not be subscribed to this thread so won't see my message!!
Just go to 'My Account on the right toolbar, then under the 'Edit' tab check the Auto Subscribe box which is right at the bottom of the page.
Cheers,
LukeInterest rates are not the only things you need to look at when signing up for a loan.
Perhaps more importantly are any deferred loan establishment fees, break fees, early payment fees, loan establishment fees, valuation fees, loan portability, offset accounts (although you already have an offset acocunt on one propoerty so probaly no need for another one) etc etc etc.
You might find that when considering all of the different fees, charges and features of a loan product that one with a higher interest rate is the better than another with a lower rate.
Cheers,
Luke
