Forum Replies Created
ok it looks like you have already made up your mind that it is a good spot to buy. I agree that it would be a fantastic place to live (my sister sure enjoyed herself when she was there for 6 months!), I hope you enoy the sunny coast!
Cheers,
LukeWhy is it too much effort? I don't do it myself, but I know friends who do and it doesnt cost anything and is easy to do.
Cheers,
LukeYou could sue him (if you could find him) to rever the lost rent. But realistically this would probably not be worth the hassle or the cost.
I would just write off the loss and move on.
Cheers,
LukeYou can buy and sell a house in whatever condition you like. However you will need an occupation certificate before you live in it (if it is a new build) and a bank will generally not allow a high LVR on an unfinished project so getting finance will be difficult which will affect the ability for purchases to settle. So generally, selling an unfinished house will not result in a good sale price.
Cheers,
LukeI was in Hervey Bay last year and personally would not buy an IP there. Walking around town there are a mountain of large vacant blocks with old for sale signs up. Many (if not most) of these blocks are DA approved for townhouse/apartment developments so you would have to wonder if the area was such a great spot for development then why are these blocks still sitting on the market years later?
One other thing that would be a worry is that there are lots of retirees in town (due to the good climate and cheap housing), and not a great deal in the way of industry and employment opportunities. I think that employed people drive property prices higher and help a market to outperform the average, and don't see this happening with the economy and demographics in Hervey Bay.
I am not up to speed with the local market but these were my observations. I did think it was a nice spot for a holiday though.
Cheers,
LukeIf the propetry has been subdivided to build a duplex, then it is unlikely that you could buy one of the duplexes and subdivide it again. You need to double check with council and with a planner- it is no point buying one of the duplexes and hoping you can subdivide.
Cheers,
LukeHi Sundance,
I agree that waiting untill you know everything before investing will mean you never invest as you will never know anything. so making a purchase and acting while you can is good, but only if you get the right advice.
E.g. If you dont know everything abvout correctly structuring loans, then get a well qualified and experienced mortgage broker on your side to set up your finance. If you dont know everything about taxation, get a good acountant on your side to do your tax returns and to give advice regarding accounting structures. If you dont know everything about development planning, get a good town planner on your side to review development sites/proposals and to give advice as to the most profitable development method.
If you leverage off other peoples skills then you have a much better chance of succeeding than battling along on your own. I am sure that Andrew Forrest doesnt dig his own iron ore out of the ground, or design his own railways.
Cheers,
Lukecall Jamie rather, not cann!!
Hi Beebob- may i suggest you call Jamie for a chat. Some bank people dont have a clue when it comes to investment loans, and to be fair some are very skilled at this type of loans.
If you cann Jamie however, you can be assured that he is knowledgable and skilled at setting up investment loans correctly and can save you lots in the long term.
Cheers,
LukeI love sports- I play football (Australian Rules of course, that's all we know in Perth!!) and hit the gym a few times per week. Also enjoy riding to work some mornings and jogging when I feel enthusiastic.
Travel as well, but not as much as I would like. Hopefully I can make some beans out of property and start doing that a bit more!
Cheers,
LukeSorry I forgot to add- if it is a multistory concrete/masonry building then a pest inspection is not really warrented as there wont be any termites, and you caould ask residents and owners of other units if there are any problems with ants, cockroaches etc.
Cheers,
LukeHi Cathy- it depends on what your risk tolerance is and what you can assess and survey by yourself.
I personally would do my own survey on an apartment block to look for defects and the like as I have done this work before and I dont think it is that difficult for most people, You can also do a strata search and look for any repairs or defects that have been noted by the body corporate (although this wont necesarily show anything as body corporate members and property managers may not have a clue about property maintenance).
To get a full survey done of the entire building may cost between $2k and $5k depending on the level of detail that you want and the quality of report that you expect (and whether the person doing the survey knows what they are talking about). I have done building surveys of multistory structures that cost in excess of $20k for a fully detailed report including structure, services and BCA compliance so anything is possible.
Cheers,
LukeKeyStrategies wrote:luke86 wrote:Hi Ballerina- just curious as to how you got your investment out- did you purchase the property in a trust, loan the money to the trust and then take out an LOC in the trusts name to repay the loan toi yourself? Or did you purchase in your own name and find a way around refinancing?
I am working though ways to do this and it is good to see what other people are doing, after all that is what forums are for!!
Luke,
There are a couple of ways you can get your money out of a deal – it comes back to your strategy and the deal.
Option 1The first is to buy build and sell all of the project.
Option 2 is Sell part of the project to recover capital, keep profit in the deal and refinance.
Option3 is refinance the whole deal on completion.Which option is best will depend on equity and income created, why you did the deal to sell or keep and your personal situation.
Thanks for your feedback. What I was curious about is how you get the cash out of the deal if you are building and holding.
One option is to use a trust- where you lend money to the trust and then repay the loan using a LOC secured against the completed development.
I just am not sure if there is a way of doing it if you buy in your personal name, because if you set up a LOC and then draw it down to put the money as cash into a savings account, the interest will not be tax deductible.
I use trusts because I think they are more flexible and you can 'get money out of the deal' (as the term seems to be) but it would be good if there was a way to do this if you buy in your personal name.
Cheers,
LukeHi Emma- a builder would be able to give you a good estimate. The cost depends on whether you are building the house on a slab or on piers- if it is on piers than it probably wouldnt matter a great deal but if it is on a slab then you will need to excavate, fill and build a retaining wall.
One thing to be careful of is that building height limits are typically based on the lowest point on the block. So if the lowest point on the block is significantly lower than where the new houses are going to be located, then you might need to cut a significant amount of dirt away to fit the building under the height limits.
Drainage can also be a problem because water runs downhill, and the rain runoff, sewer, drains etc need to drain towards the street. You can get around this by using sumps and pumps (or it might work anyway depending on the level of the main/board sewer) but it can be expensive.
3.5% grade sounds like a fair amount- that would work out to about a 2m drop in height from the frount of the house to the rear of the block baseed on a 40m deep development site.
Cheers,
LukeBallerina wrote:Hi Crusty
Properties in question are three new townhouses, developed by us. old house demolished, three new ones built. Rental yield achieved: 5.7%, thanks to horrible low valuation. Location: Brisbane inner suburb. Rented out for $440/week and $470/week. Metropole's rental estimate was $380-$400. We got our investment out (by refinancing) and are left with 20% equity in it.
(I wouldn't waste our time on Metropole any more).Hi Ballerina- just curious as to how you got your investment out- did you purchase the property in a trust, loan the money to the trust and then take out an LOC in the trusts name to repay the loan toi yourself? Or did you purchase in your own name and find a way around refinancing?
I am working though ways to do this and it is good to see what other people are doing, after all that is what forums are for!!
Cheers,
LukeAnd also for the sake of discussion AALI- have you checked with a planner that yoyu can fit 5 units onto a 1000m2 block? Allowing for 25% circulation (which is hard to predict without studying the site) then you would be left with 150m2 per unit. Fitting a 21.5 square townhouse (200m2) might be pretty tight, and would need quite a high density zoning.
Cheers,
LukeIf you have never built before, then a project manager will be a good idea. It may sound expensive but surely it would be much cheaper than trying to manage a $1m+ contract without knowing what you are doing and making horrible mistakes.
Also as mattnz suggested, $1500/m2 sounds like a pretty accurate estimate for two story townhouses that have been designed to suit a particular block.
Cheers,
LukeNHG- I think what Derek was saying about emotional attachment was that you would need to be prepared to treat the property like a business and forget any 'humanity' issues- i.e. if the Mum stopped paying rent, then you would need to be able to stay emotionally detatched and evict the poor old lady onto the street even if she has no where to go. If you can't do that then you may find you lose big time as you get taken for a ride.
But seeing as you have already decided not to pursue the house then I guess it is irrelevant.
Cheers,
LukeTo be honest, I can't see how you can build anything for $800-$900 per square meter (asusming we are talking about building something from scratch including connecting services such as water/power/sewer etc). This is cheaper per square meter than building a 4 bedroom house, and based on economy of scale you would expect to pay more per square meter for a 60m2 dwelling than for a 140-200m2 house.
Cheers,
LukeHi Terry- Do you need to tell the Land Titles Office (or whatever it is called) what your PPOR is so they can work out whether you need to pay land tax? So if you tell them what your PPOR is, does the ATO have access to this information when it comes time for CGT?
Cheers,
Luke
