Forum Replies Created
Old update,
I did go with option 2.
It has been up for 4 years now, was very easy to DIY and worked out quite cheap in the end.
Still looks like new too.
Cheers,
MiikeHi,
You seam to be jumping into the pool without being able to swim.
If you’re asking the questions of should I invest, you have not done your due diligence.
Your research should be done no differently to how you would invest in the area in which you live.
Here’s some food for thought:
– Research the area, town planning, demographics.– Go visit the locations, speak to the locals and find out the gross.
– Do the maths, this isn’t about making a short term buck, it’s about long term return on your dollar and increase in wealth. e.g. You could buy a property that returns a cash flow and provides an increase of 50% in equity, but you may find purchasing a property with no cash flow may have an increase in equity of 150% which may be far superior in bringing you wealth and return on your dollar when capitalised.
Don’t be put off, if you research gives you the ticks, be confident.
As to if Atlanta is generally a good investment city, someone else will need to hand you some info.
Best of luck!
Miike
Best to check with your accountant and also do the maths.
Here is a good reference regarding the 6 year CGT exemption rule.
http://www.ato.gov.au/corporate/content.aspx?doc=/content/86191.htm
Cheers,
Miikestep one,
speak to the council town planner.
cheers,
MiikeThis sounds a bit suss.
If it is the same agent selling both properties and they have development potential, due to overlays and zoning there would be a heavy push for dual purchase for development if this is the case.
If your looking to develop the key is not trying to get the cheapest price for both properties, but reducing cost of the entire project.
It may be worth negotiating a property option, vendor finance or jv, rather than obtaining the cheapest price possible.
Do a feasibility study, this is the most important factor for investigation.
Hope it all goes well, I’m performing a feasibility study on a similar situation at the moment.
Cheers,
MiikeYou may need to think outside the box on this one.
If the purchaser is a property dealer or developer, they’re intention is purely investment and return in a short period of time.
So the following are possible scenarios:
– The purchaser may be seeking DA prior to settlement and on-sell.
– The purchaser may be seeking DA prior to settlement with building contracts in place to start on settlement.
– The purchaser may be speculating the increase of value, thus locking in the purchase price to gain the capital growth and on sell before settlement.Think about what an investor can do with your property, and that will give you an insight.
Miike
Thanks Corkeran,
This is great!
Some recommendation for additional changes:
Analysis based on an existing property portfolio.
For example, use the same spreadsheet to analyse multiple properties with an overall analysis such as your Ratio Analysis and Property Purchase – Graphs, pages.
It’s an excellent start and I look forward to your new versions.
Keep us updated
Cheers,
MiikeWorked it out,
You need to click on small icon at the bottom left which says: view full size workbook.
Cheers All,
MiikeHi Corkeran,
Any way you can provide this as a spreadsheet for download?
Cheers,
MiikeHi Guys,
I’m no expert in this area, however considering the sounds of your strategy is buy, hold, lease, wouldn’t the following be applicable:
As an example:
PPOR (Valued at 450k):
Loan 1 (IO) – 300k
Offset Account attached to Loan 1 (All Savings) – 20k
Loan 2 (IO) – Equity from Loan 1 (based on 80% LVI) – 60kIP1 (Valued at 400k):
Deposit/Closing Costs – Obtained from Loan 2 – 40k
Loan 3 (IO) – (based on 95% LVI) – 380kIP2: (Valued at 350k):
Deposit/Closing Costs – Obtained from a new equity loan on IP1, or Loan 2 (if no equity in IP1) – 40k
Loan 4 (IO) – (based on 95% LVI) – 333kNote:
Due to having IO loans and using the equity for first IP purchase, the PPOR is not crossed, thus no interest contamination.
The IP Loans are seperated from the PPOR.Can anyone comment please.
Cheers,
MiikeThink I just answered my own question.
s118-145 ITAA
(1) If a * dwelling that was your main residence ceases to be your main residence, you may choose to continue to treat it as your main residence.
(2) If you use the part of the * dwelling that was your main residence for the * purpose of producing assessable income, the maximum period that you can treat it as your main residence under this section while you use it for that purpose is 6 years. You are entitled to another maximum period of 6 years each time the dwelling again becomes and ceases to be your main residence.
Thus my decision will now come down to weather I benefit financially better off with, option A or option B.
Cheers,
MiikeThanks Terryw,
Yeah, that would not be a great scenario.
I’ll just have to wait until I turn it over to an IP.
Thanks for the help everyone!
Cheers,
MiikeThanks for the quick replies everyone.
If I was to have rent out one of my rooms and as it is a 2 bedder I believe I would be able to claim some sort of percentage or the like as an IP.
If this is the case, would a depreciation schedule then be viable due to the room seen as an IP?
Thanks everyone, really appreciate the quick responses!
Miike
Thanks for the responses.
That was extremely useful and will help with our thought process on looking into making this happen.
Really Appreciate the effort in both posts.
Cheers,
MiikeDan42, some support on your claims
A pause is well expected…
http://www.thebull.com.au/articles/a/11183-rba-offers-no-reason-to-expect-a-rates-pause-in-june.html
Hi Sasha.
Good on ya for taking some action in property at such a young age…
One thing to note is that purchasing property is not a given right, it's a privilege to those that can afford it.
At the end of the day, property is seen as an investment and the majority of property is owned by investors, not home buyers, as much as we like to believe we can own our own piece of Australia.
Owning your own property is really an Australian dream, but if you take a look at much larger and older economies you will see that owning property has now priced out young people, look at Europe for examples of this.
Property you will find will generally increase during times of inflation along with interest rates as there is an increase in demand and income resulting in the government having to push affordability down to keep inflation within the 2-3 percentage range.
Keep up the good work and invest wisely, a time will come when it is no longer possible for young people to own property in Australia!
Cheers,
MiikeHi Michael,
The best way to learn is by taking action and engaging people in the know.
Yes you will make some mistakes along the way, but this will be for the better and in the long run will pay off with experience.
I have gone to a few seminars and renovations to make profits is a strategy that is dependent on many factors and is best performed in a bull market.. My view is that the current market is very volatile and is a higher risk on any strategy you implement, so be aware of what kind of renovations you make to increase profits. i.e; outlay rewards based on aesthetics vs structural changes.
I definately recommend spernding some time reading a few books on different renovation idea's. I would also go to the Renovating for profit stephen tolle and cherie barber Seminar. I went to this a few years ago and some of the tips I gained from it was quite valuable, however I do not see it worth going through with there mentor program.
Another thing to realise when it comes to renovations it to target your audience, i.e. no point renovating for a target of a 25-35 demographic if the area is in demand by 50+ age group. Also, check your area for what kind of properties are having larger returns based on types of renovations / styles, generally property managers and real estate companies will be aware of this and can give you some tips and recommendations.
Hope this all helps,
Good luck and remember, most of the profit will come from research and making the right decisions, not how much you invest in your renovations.
Cheers,
MiikeHi Ryan,
I'm only 26 and no kids of my own, but I can tell you a few things that my father did to help me with this and has really set the tone for how I will pursue a strategy to teach my own child some day about investment.
In cases a child wants something, give them a positive and negative option which they must chose with consequences on both:
i.e. You can but the toy now and you don't get any money to spend on something else for the next month or you can save the money and buy the toy in a months time and still have a small amount of money left over to buy something else.When a bit older, they will have a sense of value of money due to the above, so really push the idea of money management and total loss, you need to show them a form of gambling, in which they can lose everything, or manage the risk so that if they do lose, they are not hurt with the option they have made.
Hope these tips come at some use, personally it did the trick on me…
Cheers,
MiikeHow interesting, I am going through a similar problem at present.
My situation is, I have a 2 bedroom flat in a block of 7 flats, 2 stories.
All the owners have got together and are fed up with our Body Corp Manager, which we are currently paying 1200 PA.
We did some investigation on some alternative Body Corp Managers and have found that in order to get a decent Manager, we are going to have to fork out 1600 PA, which is the was the similar price we received across several Managers and expect a decent service that is actively taking action on behalf of the owners.
In order to start the process, we contacted our current Body Corp Manager and requested the contact details of all the owners. Once we received that, we sent out a 6 weeks notice with the agenda and a request for attendance to a General Meeting.
Within the meeting, all owners attended and we passed a motion unanimously to hire a selected Body Corporate Manager.
We have sent out a copy of the minutes to all owners, the current Body Corp Manager and the intended new Body Corporate Manager to start taking action and take over the account.
We are now waiting on further details from the newly appointed Body Corporate Manager.
Hope this helps…
Cheers,
MiikeThere are quite a few threads on this topic, do a search.
Or even better, go out and buy Steve's new book, he has a dedicated section on trusts.
Alternatively, the best advice you can get is to see a seasoned accountant that has experience with property investing clients.
Cheers,
Miike
