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Just an update.
Out of no where I had a number of people come through the property this week. Most off my add on Gumtree.
The real estate gave out at least three applications that I know of. So things are looking up. However I am pretty sure I have done most of the work.
So I have been doing a lot of research on 'getting the right rent', which many of you have enlightened me that it's not an aim it the current market (other similar properties in the area are still at a higher advertised rent). I now realise I could drop the rent further and I will still be getting a good ROI. I am pretty happy about this.
I also surveyed people at work about which add do you find more appealling. I found people were appealling more to the photo's I had taken with my poor quality camera and furnished apartment. In comparrison to the sales photo's. I was surprised about this.In the long run the value of property will increase. With the exception of natural disasters, etc. Which appears to be a common trend.
However it may not be a good time to buy, renovate then sell. As it is always possible for a short term drop in prices or for the market to stagnant. Not that I want the market to slump, I believe it is due for one.Also some states may have a FHOG of their own additional.
When I brought last year NSW had an additional FHOG of $3000.
There is no stamp duty for proprties under $500,000 or $600,000 from memory and you can claim up to the value of $17,999. I didn't pay stamp duty.
That's potenially $30,999 money, saved/ earnt
If you then compare the potenial rental earnings on the property (500 rent per week = $26,000 annually), it is certainly worthn it to live in most properties for the first 6 months.
Depending on how much you earn I would suggest the bank will lend you $300,000, if you are currently on an average income.
Commonwealth and Westpac are the best banks for first home buyers. However staying away from banks may save you some money. Some banks/ lenders will also let you use the FHOG as part of your deposit.
I would stay away from brand new properties for an investment, as you really are paying an extra cost. After it's lived in the value will be the same as the other properties in the area.
I would suggest only to buy a new property if that is what you want as your PPOR and that is only for the purpose of luxury.
Work out the current estimate rental yeild and let this guide you.When we are talking about affordabilty, we are talking about the percentage of income you are spending on your property.
I think we all are all aware that the average person (single or family) with a property is spending 50% of their household income. Which is much higher than in the past.
I think it is unrealistic to expect that low income earners, i.e. a family on minimum wage, should be able to afford property.I was one of the lucky ones growing up. I came from one of these low income familes (single-parent), the majority of income for our family came from the Government (yes taxes). My Mum rented the property that was brought whilst being married. We then rented somewhere cheaper. So therefore the property was paying for itself, even though there was no extra money to put into the mortgage.
I grew up with one pair of shoes to wear all year around and clothes that were worn by my other siblings before me.
The rules for property owners changed, I recall it being the early 90's, we then had to move into the property. My sibling's were old enough to care for me by this stage. So my mum worked part time whislt getting a degree at University. So for years later she was able to increase this minimum wage and get a job as a skilled worker.
Now she owns two properties and is about to retire. However super remains a problem.If this property wasn't purchased before my parents seperated, my mum would barely have any investment and also barely any super. So her retirement age would be a struggle.
However not every family is this lucky. That is why there is a rental market. Without people who are required to rent we would struggle to make an investement out of our properties. (I am aware many people rent due to other circumstances).
I work hard every day to improve my skills, so every year I can attempt to earn more than a 2.5% increase in my pay.
I am only 28. My boyfriend and I both have a seperate mortgage and two new cars. All of my friends, some who live in the North of Sydney, Inner West, Eastern Suburbs and Western Suburbs. All have a mortgage or two!
In my 'world', yes property is very affordable. I think that people my age just want it all. By that I mean new clothes, new furniture, new car, a house to live in, a house to rent out and most of all a family. This is why the trend now is to live with your parents for longer and put off having kids until your older.
Spending 50% of my salary is not a struggle for me or people I know. However there are plenty of people who do spend 50% of their salary and the money they have left does not cover the cost of living. These are the people that should have just rented.
Housing is not affordable for everyone but if your complaining about it and think you aren't getting a fair deal, then maybe you should look at what it is that you want and strive to get it.. My advice for low income earners is to look for occupations that are in desperate need of skilled workers and then get the appropriate education to become that skilled worker. In the meantime live in an area where you can live within you means. Visit the below link to view Australia current skill shortages, which all are above the minimum wage.
http://www.deewr.gov.au/Employment/LMI/SkillShortages/Pages/SkillShortageLists.aspx
No they don't charge up front fees. However if you terminate the contract they may charge you one weeks advertised rent.
However due to them getting one person through the door, I think they will let that fee go.I did the research prior to purchasing and continue to check online at add in the area. My agent said he would be able to get $490 for it. It is now advertised for $470.
I have decided to change agents at the end of the week, as I think they are letting me down in the advertising. They won’t listen to my suggestions and I have had a number of them.
I have an add on gumtree that I placed and that is getting more notice, in comparison to the agents add on websites such as Domain.
Other properties advertised are in a similar price range and there aren’t to many listed in the area.
My question about the return is regarding negative gearing, you can’t claim more than you pay on tax, so if your rent is to low you are not earning income, you are spending additional income. So then there isn’t room to claim on deductions such as wear and tear.
Thank you all for your advice, I will take it all on board.I live in a large block of 36 units we have a lift. Also we are undergoing a dispute with the builder as there are defects in the building. I pay the same amount, so I would suggest you are paying to much.
At the end of last year our Strata Company started charging about $1000 a quarter.
The body corporateelected to change strata companies and that is almost $100 in savings.
I would speak to the other owners in the building and suggest researching for a new strata team to manage your property.
