Forum Replies Created
I think that you will find that a property’s value to an investor and the potential maximum sale price are two very different things in the current market. Yields in Sydney are often as low as 3%.
The real question you should be asking is “how do I maximise the sales value of the property?”
It is quite likely that by strata titling and selling each unit individually to owner occupiers, that the value will be considerably higher than trying to sell to investors, as an owner occupier will have different decision criteria. (Often they are just stupid, with the ridiculous prices paid in the Sydney market at the moment).
I have just purchased a house in South Gladstone on an 868 sqm corner block, zoned high density residential. Looking at eventually (when I have enough capital behind me) moving the house to another property and putting 6 units up.
Gladstone is my number one pick in Australia for capital growth, given the huge investments going on there in the next few years (approx $40 billion) and an estimated required workforce of an extra 10,000 jobs over the next 4 years during the construction phase (in a city of only 40,000).
I see it as the next Port Hedland (where prices are $1M+) and that huge capital growth is assured in the next 5 years.
One thing to watch out for though is termites, (totally foreign to me being from NZ). Talking with the building inspector, he advised that they would find termite activity in 2 out of 3 houses in Gladstone. Definitely get an inspection done and make sure that you have appropriate chemical barrier protection in place to avoid issues in the future.
Not sure if the price is reasonable, but given your lack of experience it sounds like getting professional assistance was the right move for you
Probably the key things to make sure of through their services are:
1. That it will make a significant profit after all expenses (including theirs) are taken into account
2. That you will be able to ask lots of questions along the way to learn how to do it yourself in the future.
Are you sure you are eligible for a larger loan?
Full time minimum wage equates to around $30k per annum and you already have $200k of debt, which would put you at the extreme limits of borrowing capacity already.
Great thanks Paul.
Really appreciate you posting this.
I can't seem to find any costs involved. Do you know what they will be? I only have one wrap, so I certainly hope there won't be a high cost for the ASIC licensing.
Cheers,
MattTry a building society for a personal loan instead. They have interest rates as low as 9%.
I am looking into this in Queensland at the moment. Talking with the council, the cost for an extra dwelling was 15-20k and the cost to do a full subdivision was only an extra 5k approx.
I just have one issue with the millars list site. The colour scheme is appalling!! I bet the creator is colour blind.
I’m actually trying to be helpful with this comment.Call the Gosford CC and ask them.
If there is no growth potential, there is no point having it negatively geared, (also known as making a loss).
Sounds like you have already decided it is time to sell.
Hi, I have bought at Wyndham Harbour. Stage 1 was 70 lots and sold in pre-sales. The whole development is only around 240 lots.
It has all the key drivers of high growth, infrastructure, water and above all scarcity.
Like other waterfront property, you would be looking for growth, rather than positive cashflow.
I have spoken to 3 others who have purchased. I have done it for capital growth, another was a developer looking to onsell and 2 couples who were planning to live there. I am aware that a number of the prime waterfront properties were purchased by a large developer for resale. It appears generally that when the developers have onsold, most properties will be owner occupied rather than rentals.
My lot (350 sqm with partial water views) could be onsold at the right price.
Depends which legal firm you use and the resources they allocate for it. The top end of town wouldn’t lift a pen for less than $5k. Don’t go for big name firms.
You stated you would have stamp duty when you sell, but that is incorrect. Stamp duty is charged on purchase not on sale.
If all your properties are highly cashflow positive with 20% deposits, does that give you unlimited funding?
I have spoken with my bank manager regarding my borrowing limits and each cashflow positive property appears to increase my borrowing capacity due to the income being higher than the associated costs.
So where can you get these for free?
I have been advised previously that you require a 30% deposit to use super to get a mortgage.
Hi Richard.
Was wondering about the processing time,
My situation is that I am doing a wrap on a new build. Will get the deposit back from the wrappee when the house is completed, can’t get it before then.
I would love to hear any also. I plan for my next purchase to be there.
Also be aware that the conditions that existed in Australia when the book was written don’t reflect the property market today. Parts of the US and Canada do reflect those conditions though. You may want to look at them as alternative markets if you want to use the strategies in the book.
The best thing about doing it in NZ is that you don’t have stamp duty. Stamp duty is a huge cost in Australia that has to be added to the purchase price of the person buying the property off you. The deal should be much more attractive in NZ. The other benefit for you is that you wont have to pay a real estate agent to sell your property.
I would suggest you figure out the current market value, add a figure of around 20-40k on. Typically a wrap will have an interest rate around 1.5% above the standard variable rate. If you are able to get a deal of 0.7% below standard variable rate from your bank, that will give you significant positive cashflow, which is guaranteed as you are then indexed to interest rates increasing.
The wrappee will also have to pay all outgoings, so there are further benefits from them paying the rates, water etc.
Make sure you get a reasonable deposit from them.
