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Btw, for anyone interested in that release at Ridgewood (brighton) – I heard people camped out from Wednesday night – with the first 5 buyers, taking 2 blocks each!!! Apparently there was quite a bit of arguing going on as the next release isn’t until February so the stock in that area is getting quite limited!
Having my PPR and an IP in Brighton I followed the latest release with interest. Personally I thought the blocks which are behind Merriwa were over priced ($118k for cottage blocks upto $150k for larger blocks). However how wrong could I be. They had sold out by Saturday lunch time!!!. Considering a lot of the infrastructure is still being built (shopping centre, road to beach, train station (2008)) I am amazed by the growth in block prices. By my estimation the cottage block I purchased in the Seahaven area of Brighton for $100k 4 months ago is now worth about $135-140k. Not bad capital gain!!!!
ned kelly
I have done a bit more research on the topic.
The ATO position is revenue losses can be offset against capital gains, however capital losses cannot be offset against revenue gains.So Mei it sounds like your accountant is giving you good advice and I should sack mine!!!!.ned kelly
In regards to the losses – every year obviously our income from the rental property is less that the expenses – interest on loan etc etc…there are alot of things we can claim – when I fly back to Perth that can even be claimed!!! — resulting in a loss….Anyway every year that loss builds up and it can be used to offset any capital gain.
(1)The losses you are accumulating are revenue losses, these can only be used to offset revenue gains. Only capital losses can be offset against capital gains. This applies to both residents and non residents.
(2)Be careful what percentage of the expenses you claim on your trips to Perth as the ATO are very hot on this issue.
Congratulations on your investments. Get back to your accountant re their tax advice.
ned kelly
Quote:take rockingham… where else in the metro area do you get a beach facing 3 different directions?What, the beach water at Rockingham is of questionable quality and the area is next to heavy industry with chimneys bellowing smoke out.It may be facing 3 ways but in my eyes the northern beaches are cleaner with less of the visual and air pollution of Rockingham.
As Rob W states there are lots of developments happening in the northern coastal area but they don’t get the same press as down south as it is easier to get planning approval for them as Butler, Jindalee & Yanchep are still densely populated, therefore these developments do not have people protesting against them. In fact they are welcomed. I know which area my money is on for future capital growth…..time will tell.
ned kelly
There’s another thread where Ned_Kelly was talking about his development in Butler/Brighton. I’ve never been keen on the idea of being on ‘the other side of Marmion Avenue’, but the block prices did seem to give
the potential to build a really cheap IP.
You better hurry to get here to. Land in Butler all but sold out until next stage middle of next year. Noticed on REIWA site today, no houses in Butler below $300,000.00. Northern suburbs are hot,hot,hot.
ned kelly
This topic is really interesting. When we moved to Perth from NZ a few years ago we purchased our new PPOR in Perth. There was another party interested in purchasing the property we were interested in. The agent advised me both parties could table an offer and the best offer would be accepted (I was told these were the WA real estate regulations that had to be followed). The agent then came back to me and said he couldn’t tell me what the other party offered but their offer was the same as ours!!!!. I then offered $2,000.00 more that was instantly accepted as he said by regulation he was not allowed to go back to the other potential buyer. By the way if you think there was no other party……when they received the news that the property had been sold they knocked on the vendors door and offered $10,000 cash to break the deal they had signed.
The moral of the story “if you ever I sell a house in WA do it yourself!!!!!. Is this why house prices in Perth are relatively low compared to other cities in Australia!!!.ned kelly
I must say Dolf was the author who gave me the inspiration and confidence to enter the real estate investment arena. His book “Real Estate Riches” is in plain easy to understand english…. and best of all he didn’t feel the need to make up fictituous characters to tell the story.
ned kelly
My personal opinion is Perth is still very much under valued and has a lot of room for growth. I would expect at least 25% growth in the northern suburbs of Perth in the next 18-24 months, which is the market I know. This is being fuelled by a lot of immigration especially from the UK. These people are selling up in the UK converting their pounds in to dollars and buying houses and still having money left over.This will only increase as extra immigrants are being sought to fill the skills shortage in WA.
Even with all this activity things do not feel frantic as the pace of life is so easy here it is hard to feel frantic!!!. (WA = Wait Awhile) There are still many opportunities, not many positively geared now but with good potential for being positively geared with capital growth in the next couple of years.ned kelly
In the northern most suburbs of Perth. Butler (aka Brighton) to be exact. It is situated near the beach about 36km north of Perth. The median price at present is about $280,000 (17.5% rise last year) . There is currently no infrastructure in the suburb to speak of. A shopping centre has just commenced being built which includes a Coles supermarket, family tavern, health centre etc. A direct road to the beach (about 800 metres) is currently being built (currently about a 2km drive to Quinns Rocks beach), the train is due to come through to Butler in 2008.Add to this the developer Satterleys have already put in superb lakes and parklands that are being developed further in the next year. Also there are very strict covenants on properties and the developer provides fencing, landscaping, reticulation, and cable connection to all houses.
There is a premium being paid for completed new homes in the area as people are not prepared to wait the 12 months to have there home completed. I have purchased a cottage block (360 square metres) for $100,000.00 and are getting built a 4×2 completely finished for $100,000.00. Add on stamp duty and interest I will pay while it is being built and the total cost will be about $215,000.00. The value of the house if it was finished now would be about $275,000.00 so there is an instant $60,000.00 profit and you can conservatively add at least another $20,000.00 to this when the property is finished in 10 months time. So this will be about $80,000.00 profit in one year.
The icing on the cake though is as the loan is for the building of an investment property I am able to claim the interest I am paying as a tax deduction from the day I purchased the land. In fact I have a PAYG variation in place so the tax office are already helping me to pay for my investment property even though it hasn’t been built yet!!. The anticipated rent would be about $250.00 a week and while this is not cash flow positive I feel the initial capital gain more than makes up for this and the fact it is a new home I will be able to maximise my depreciation claims.I anticipate the property will cost me about $15.00 to $20.00 a week and should not take long to be cashflow positive as rents in Perth are predicted to rise substantially over the next few years.
ned kelly
I am active in the market practising what I preach. Building an IP which will give me an instant capital gain of conservatively $60,000.00. Providing me with enough equity and rental return to do the same thing again straight away. It will cost me about $15 a week but should be cashflow positive in a couple of years.
All I am saying is a property does not have to be cashflow positive straight away to be a good investment and people should not seek positive cashflow at all costs especially in areas that may have had capital gain in the last few years but historically have had little or no growth over a long period.
I know their are examples on this discussion site of people buying both cash positive properties with capital gain in areas that historically have performed well…and good on you.
However it is obvious a lot of other people just buy properties because they are cashflow positive, without thoughts of future capital gain and whether the town they are buying in has a good future. They just do the figures and if it is cashflow positive the deal is done.ned kelly
Thanks for the replies. My argument is this stage in the property cycle you look for property that will be positive cashflow in 2-3 years. (and have good capital gain prospects now) Make use of the tax deductions such as depreciation in the period before it is cashflow positive. Then the cycle will evolve so there are cashflow positive properties available. (that are not over inflated in value in marginal regional areas). I believe anyone buying cashflow positive property now will get litte, none or negative capital gain in the next five years, and be paying an over inflated value for the property. Positive cashflow has it’s day a certain time in the property cycle, but open your eyes to other opportunities that are now available that are not positively geared but will provide you with capital gain before thay are positively geared.
ned kelly
From what I can see the only lots left for sale in Seahaven are lot 1929, lot 1888 & lot 1889. As they don’t have the prices on them you would have to contact the sales office for further information.
ned kelly
From what I can see the only lots left for sale in Seahaven are lot 1929, lot 1888 & lot 1889. As they don’t have the prices on them you would have to contact the sales office for further information.
ned kelly
Mei-Lin,
Website is http://www.satterley.com.au/Brighton/Brighton-Homepage.htm
The block I purchased was titled, in the Seahaven Premium area of the Estate. The whole Estate will not be finished until by about 2012 so there are a lot of stages to go. However land of the west side of Connolly/Exmouth drive (Seahaven Release) is at a premium which is why I bought in this area of the Estate. There are only a few blocks left in this area (you can see them on the above website) and there will be no further releases on this side for about 2 years as they are deciding on the plans and location for the 2nd Butler train station and larger 2nd district shopping centre.
If I had the funds I would be doing more than one property but patience is a virtue!!!.
I would also say similar opportunities are available down Rockingham where you have been looking. Good luck.ned kelly
The Estate is Brighton Estate, Butler. The builders of my investment property are Homestart who are part of the BGC Group. The house is about 150 square metres of living and includes window treatments, carpets, security system, solar hot water, double remote sectional garage, stainless steel appliances, paving. Basically the only thing I need to do is paint the interior walls.
ned kelly
I just thought I would add my recent experience on how to make money in the Perth property market.
There is a 3 year old suburb called Butler (aka Brighton) situated near the beach about 36km north of Perth. The median price at present is about $285,000 (13% rise last year) . There is currently no infrastructure in the suburb to speak of. A shopping centre has just commenced being built which includes a Coles supermarket, family tavern, health centre etc. A direct road to the beach (about 800 metres) is currently being built (currently about a 2km drive to Quinns Rocks beach), the train is due to come through to Butler in 2008.Add to this the developer Satterleys have already put in superb lakes and parklands that are being developed further in the next year. Also there are very strict covenants on properties and the developer provides fencing, landscaping, reticulation, and cable connection to all houses.
There is a premium being paid for completed new homes in the area as people are not prepared to wait the 12 months to have there home completed. I have purchased a cottage block (360 square metres) for $100,000.00 and are getting built a 4×2 completely finished for $100,000.00. Add on stamp duty and interest I will pay while it is being built and the total cost will be about $215,000.00. The value of the house if it was finished now would bes about $270,000.00 so there is an instant $55,000.00 profit and you can conservatively add at least another $20,000.00 to this when the property is finished in 10 months time. So this will be about $75,000.00 profit in one year.
The icing on the cake though is as the loan is for the building of an investment property I am able to claim the interest I am paying as a tax deduction from the day I purchased the land. In fact I have a PAYG variation in place so the tax office are already helping me to pay for my investment property even though it hasn’t been built yet!!. The anticipated rent would be about $250.00 a week and while this is not cash flow positive I feel the initial capital gain more than makes up for this and the fact it is a new home I will be able to maximise my depreciation claims.I anticipate the property will cost me about $20.00 a week and should not take long to be cashflow positive.
ned kelly
