Forum Replies Created
The other factor that comes into play is … how long you wish to keep the property for???
If long term … the economic cycles and time will aid the property capital growth.
Also consider tax deductions and gearing factors …. speak to a good accountant.
wealth4life,
The lastest job listing figures were just released last week … $20,000 jobs vanished from last quarter. For this reason it is now unlikely that rates will rise this year … but it is not totally ruled out. It's a delicate balancing act to not crash the economy but get households to cut their spending to slow an overheated economy … difficult to do when rsiing fuel costs are triggering added inflation.
Always remember that it's a function of supply and demand … migration fugures are still high in many areas.
Not everyone wants to subdivide it themselves,
This is why there are many opportunities out there if you look and do your homework. Everyone has different skills and weaknesses.
One of the reasons vendors dont subdivide themselves is often because they dont know how to do it and are fearful of trying …. sometimes they inherit the land or have had it in the family for many years …. do your research. Another reason is because they dont have the funds to do it, each subdivision could cost you between $20-30K plus depending on which state the land is in …. you may also have to consider access to rear blocks if they dont have frontage access …. these costs will add up …. an access road could cost you $100K for example depending on the size.
Hi Shel25,
I agree with Shane you definitely need to make sure you are clear on the subject to finance clause in your contract. You especially need to be careful if you are in NSW. There are a number of lender that will look at your employement status bases on consistency including your last jobs … provided that
a/ You are doing the same work now as you were in your last job
b/ You are full time employed
c/ You have not had an extended absense from work in between.Even if you are out of your probation periods, being part time or casual would cause problems for lenders.
Hope this helps
Hi Mickboy,
The first thing I can suggest is that you educate yourself in whatever decisions you make involving investing … whether it be property, managed funds, shares …or even a business etc ….. the reason most people fail is due to lack of education and making highly emotionsal rather than logical decisions ….
What city are you in? I may be able to help you if you are in Qld, Melbourne or Adelaide especially … thru my network.
Michaelparis,
Firstly, I'm neither chasing your approval of my credibility nor scamp of my approval. You must remember this forum is designer to help people and people must understand if you are going to post stupid comments … there are consequences. Besides … just as scamp has the right to post idiotic comments … I also have the right to view and comment of him as an idiot! If the shoe fits????
I think I've had enough of this thread ….. it's had it's life.
Italian Dragon,
I lived in Adelaide for many years until recently … I also agree that it is not likely that the property prices will double in 10years but they will continue to rise. In spite of the economic conditions …. the defense contracts and the mining boom will hold the SA economy relatively stable for the next few years at least …. do your homework and read the articles … Adelaide is having a Mini Boom just like Perth did and Qld did! The Govt is spending big still on infrastructure to support this …. also …. as the employment figures just came out with 20,000 jobs disappearing …. it is unlikely we will see another rate rise till next year.
Scamp … please stop posting ridiculous posts in this thread … you're an absolute idiot and have not a clue about the Australian Market. Figures you are quoting for Varsity are idiotic …. you're making yourself out to be more of a fool every post you make … give up!!!
NO ONE TAKE ANY NOTICE OF ANY POSTS WRITTEN BY SCAMP!!!
Varsity will get the rent returns expected… every day … but ben they wont cover the repayments. If a property is valued at $250K and you borrow 90% you would borrow $225K and at interest only repayments you would be paying abou $400+ per week plus costs. As uni students usually share … if it's a 2 bedroom you may be able to rent out each room individually and get closer to the mark … but this doesnt always work out as you would like it to …. as far as tenants go 'trashing' a place .. you can get landlord insurance to help with those problems but it still can be a risk … so you need to screen your tenants well!
Cheers
As far as the GC is concerned … I agree with you GMH … I think it is overinflated … especially on the high end ….. but you can also still get some goof buys there too … you just need to know the market ….. it's always supply and demand …. because of the migration into the GC … it wont do so badly but i still expect it to drop.
Oh Please scamp …. tightening of credit is a normal economic policy in times of an overheated economy. We've had tighter credit for the past few years and over the past 12 months it has been more difficult to get loans with poor credit. But that is logical right??? The Australian market is NOT like the USA market …. but yes people are spending way too much in persnal credit and expenditure …. so people do need a lifestyle wake up call. Besides you have never been able to get personal credit (apart from Home Loans) with poor credit score.
Also, in oyur calculations on capital growth … you neglect to state that your capital investment in the property is often about $50K and in the course of a property cycle you would double your money if you were to realise a reral growth of $100K after costs right???
Again … Scamp …. it's all relative ….. the idea is to look at ways that will grow your parcel of money … and in different times in different economies there are different measures and results from different sectors.
With people like you spreading dispear and fear … that's when and how the economy does crash!!! Idiot!
Scamp,
You definitely havent done your homework …. and you definitely dont know the Australian market… Maybe because you dont live in Australia??? As I said before … I do agree that housing prices will drop …. and I do agree that the market will recover in about three years …. but your evidence and figures etc are disgraceful… You clearly dont understand the Markets in Brisbane or Adelaide. My belief is that the Gold Coast is an over inflated market in many suburbs, as it Sydney in parts and Perth in Parts. In every economy you need to do your home work and there are areas that you would buy in and areas that you would not buy in. I do however agree that some suburbs have and will drop by up to 50% due to ridiculously overpriced values. This has already happened in suburbs of Sydney ….. but is not an overall reflection of the whole economy ….
I'm interested to know how well established your own portfolio is???
If you'd like to speak to someone who knows the local markets … speak to experts in that area. There are plenty of avenues to research any area you like…. maybe you should do oyur research more on Adelaide Scamp …. why would the government in a time when spending is scarce, be still spending Billions on Infrastructure to support these areas of growth??? Maybe to support the economy by supplying more jobs and opportunity …. to overt such catastrophies as a property meltdown???
Scamp… what you focus in is what you will see …… try not focusing on the problems all the time and maybe you'll have a better day….
Scamp,
With the ratios I was quoting relative serviceability calculations that the banks use to determine the affordability …. I wasnt quoting what you 'Should' borrow … naturally you should borrow less rather than more, ideally no more than 80% if you can do it.
4 times borrowing ratios are the maximum you will getfor owner occupied and for Investment/Rental properties they will allow you a relative amount more since your receiving rental payments to pay for a large part of your costs and your main household living expenses are already calculated in the owner occupied scenarios (if you have a home loan and buy a rental property). The housing prices in Australia topped off well over 2-3years ago…. and if you look at the history of Median prices in Adelaide it is the most steady of all the capital cities …. it usually doesnt take the big rises like sydney, nor the big falls either.For you to quote poeple borrowing up to ten times their wage is absolutely ridiculous!!!
Don't forget too … here in Australia we have a serviceability factor of up to 3% above the market rate… that didn't exist in the USA …. they could borrow just about anything with virtually no evidence and at the ridicilously understated and unrealisticly low 'Honeymoon rates'…. that's why the USA economy bust …. because when these shark lenders offerred these 3% rates to unsuspecting home owners they had absolutely no way of affording their ridiculous debt levels at doube the rate in the 'real world economy'!
Besides the biggest critic of spending in Australia is lifestyle 'personal' credit spending.
I agree with you that the maket will continue to slow but I disagree that the prices will slump like the USA … the is NOT the USA and housing loans in Australia are nothing like the loans in the USA …… you cannot fool the banks and borrow too much like in the USA….even Lo Doc loans are under close scrutiny here, and only businesses can access them … and even then they have to show evidence and statements to show their business activity, and No-Doc loans are virtually next to impossible to find. But that still hasn't slowed the market much in Many areas … best thing to do is follow the facts …. watch the reports and figures each quarter and judge for yur self. Facts dont lie what ever the state of the economy.I must say I definitely would not overcommit myself in this market…. and would only buy property myself if it is under market value and repayments are comfortable. Afterall it is a buyers market.
You did however fail to comment on the housing demand in many Australian capital cities which we will struggle to meet… and the record number of migrants over the last 12 months.
If you are going to buy property Adelaide would be one of the first regions you would consider …. a mining boom has many repercussions on the whole ecomony and infrastructures …. surely you understand these economics since you seem to know everything about everything?? Besdies the mining boom is more like 600-800 kms from Adelaide, which is irrelevant anyway. The mining companies are set to house their Head offcies in North Adelaide. There are many jobs created by both Defense and Mining, not just in the heart of the mining. Pt Augusta, Pt Pirie and Whyalla are set to be the supply hubs for the mining projects.
To quote housing prices 20 years ago is ridiculous …. why dont you quote the price of bread and wages ….eg the ecomomies of scale from 20years ago also ??? It's all relative. Houses worth squat in Adelaide were worth a bit more than squat in Sydney and so on. Relatively low prices in Adelaide compare to therest of Australia especially Perth and Brisbane which have always thru history been very similar sized economies … Perth is still similar to Adelaide but has a much higher median price thanks to the Mining Boom there and now Perth is paying the price for the unrealistic Median prices. Brisbane also had a mining boom and prices went up. There is also a loto fmigration to Queensland fueling prices. It's all relative. Next you'll say we're headed for 19% interest rates agin from 20 years ago??? And how does a non-sold house drive down the rental values?? Dont families remain living there if they dont sell? And not everyone has high mortgages or even a mortgage!
I agree with you … people have to enmasse stop buying houses for the prices to crash …. its all about supply and demand!!
Scamp… even you stated that the economy will recover by 2011. Do you really think that the economy will change that much in 2.5years? Lets watch the reports ….
Having read your responses you dont actually quote anything or use any facts or even any relative common sense…. only dooms day fear tactics!!! I will lsten gladly to your comments when you start to show evidence of your dooms day theory. Try not to be so general in your responses .. grow some balls and lay something meaty down huh??
Which suburbs you focus on would depend on what your budget is. North Adelaide, situated right next to the CBD (overlooking it actually), is a beautiful leafy blue chip suburb which is said to be set for the mining companies to house a lot of their Head offices for the Mining up North. Salisbury, Munno Para, Elizabeth etc in the Northern suburbs are getting good rent return and are still affordable. Suburbs by the water are doing well as usual Largs North and similar are good ones to look at… and closer to the action (Mining that is) … Port Augusta, Port Pirie and Whyalla which make up the Iron Triange are set to be supply hubs for the mining projects further North. Right in the action are Coober Pedy, Olympic Dam and Roxby Downs … where it is still possible to get a neutral or possitively geared property. Lin Andrews Real Estate cover all this area extremely well. It would be a good idea to subscribe to their newsletter (I do). Lin himself and Terry Benn are two you can talk to … by the way … No I dont receive a commission and I'm not a referrer for their company. However, I did live in Adelaide for many years.
Hope this helps ….
PS Do your research Do Your research Do your research… know your budget, know your prices/values, know your suburbs, know your rent returns, know your limitations.
You might like to cast your eyes on South Australia …. and No I'm not selling property there! (for the sceptics). I've been watching the market in SA and Adelaide is being dubbed 'The New Perth' …. I live in Queensland ….watch the articles currently being written.
The reason for the mini boom in Sa is the Defense Contracts buildign Submarines and the Mining Boom in Northern SA. Subscribe to Lin Andrews Real Estate Newsletter and see what they are saying. You can currently get Cashflow Positive Properties in Roxby Downs and Coober Pedy.
This is to post such as Scamp and similar …
what you are neglecting to remember is that the elements of supply and demand govern the market. For you to understand the market well you need to understand the local market. Many capital cities are struggling to meet the housing demands. I saw one of your other post (scamp) saying that the average income in Australia is $50K … if you understand mortgages well then you will know that the Serviceability ratios for purchasing/lending are between 4-6 to 1 depending on O/O or Investment Property.
Therefore, it's not the $50K income earners that are driving the market. And …. all of those that cant get into the market are long term renters/tenants…. even more reason for prudent investors to buy up more of the market. Our property market is NOT governed by foreign investment.
It is true however that the property market is slowing down …. and we need to be more diligent in our research. Families are still able to purchase property as more and more are double income families.KatherineM,
The South Australian market is doing very well at the moment. Last year it increased by 23% and it sutuated as one of the best capital cities for growth in Australia. The March results were already reported at 4.5% which is setting it up for double figures for the year. This growth is due to four things …. 1/ The relatively well priced housing in SA …2/ The increase in rental values…
3/ The Defense Contracts that are flurishing in Adelaide eg Submarine base construction contract…. 4/ The Mining Boom in Northern SA.I agree with Richard,
Although it is good to remember and debt is worthy of being reduced if you can… ie we are always better off without the debt if we can help it. But Investment debt allows us to leverage.
When paying Interest only, you should remember that you can pay extra when you like … therefore treating it as a P&I but with the full access to redraw all principle payments unlike a true P&I. With the debt levels as they are, most people are unlikey to pay off their loans with savings anyway, therefore the idea is to hold and wait for the capital growth and being careful to maintain cashflow… hence the Interest only gives you the flexibility to increase or decrease payments with full redraw.
If this is your only debt … then it might be a good idea to set I/O and treat it as a P&I and pay it down as quick as it is possible for you, knowing the equity is therefore you to use again to maybe buy another property in the future.Maxxi
JJM Finance Services P/L
0403 234 234
[email protected]
8.77% Full Doc and Lo-Doc are about to arrive!!Morning Benhaman,
As a beginner, one thing to remember is the more research you do… the more aware and prudent you will be. You will probably already understand that … what you focus on … is wehat you see! and the reverse is true too … what you don't focus on… you wont see! Therefore ask lots of questions everywhere you go and as a suggestion subscribe to google news for relevant titles.
It's also helpful to understand that prices are governed primarily by supply versus demand … in many parts of Australia, especially capital cities, we are struggling to meet housing demands for the next 20 years plus.
As a suggestion, you are likely to be more able to afford to buy a property to rent out rather than one to live in at this stage. This is because the tenant will be paying a good part of the holding costs in rent. If property prices in the area that you buy rise … then you could consider accessing the deposit for a property you would like to live in the future. By that time your income situation may have changed and rent value are likely to be higher too!
A spotlight in the market at the moment is South Australia due to the lower costs of living, relatively lower housing prices and especially the Defense Projects and the Mining Boom in Northern SA.Good Luck!
Maxxi
JJM Finance Services P/L
[email protected]
0403 234 234
8.77% Full Doc and Lo-Doc is about to begin!!Matt,
I am a qualified Mortgage Broker …. I don't charge Brokerage and focus on service, support and coaching. I have an office in Springwood and another on Petrie on the Northside. Feel free to contact me to have a discussion and see if you agree with how I work. I'd be happy to assist you in your goals.
Regards
John Maxwell
0403234234
JJM Finance P/L
[email protected]
[email protected]Thanks Guys for your suggestions,
I've sourced the monies required from private funds offerring 16% p.a. for 2 years.
John
Thanks for the posts Richard & Tracey ….
Tracey, I don't have the time to get the credit cards at this point in time ….
Richard, I just settled one with ANZ last month w/- Business Plan & Cashflow forecast … but got a snag with the next one.
But thanks all the same …. hopefully I'll have private funds arranged by tomorrow & St George are also looking at it.John
