Forum Replies Created
Couldn’t agree more about the batts. The thicker the better, most batts are already partly cut in case you want to divide them in two. Make sure you dont open the packs until you’re in the ceiling…they are compressed and expand significantly. they are easy to install and seem to have passed the test of time.
As an ex ADF member I am aware of DHA Housing. The attractiveness is that rent is paid for the agreed term irrespective of any vacancies during that period. ie the cash flow is guaranteed. If the property is leased to DHA for 9 years, the property is repainted and recarpeted at DHA expense before it is returned to the owner. But…I’ve always found that the upfront cost price was inflated to the point where I considered it expensive relative to the surrounding properties and the rental receipt was artifically high. This meant that if things were in a bit of a slump at the end of the agreed term, then a) the property would not have appreciated as much in real terms, and b) the rental receipts having been “inflated” for the term of the lease to DHA would come back down to earth to meet the market return. Thus whilst the property would have been a “cash cow” for the lease period, it would have to stack up on fundamentals at the finish line. The standards set by DHA would also leave no room to value add by doing a reno. The area that I live in has many DHA properties and I haven’t heard much, for or against the idea. I’ve just gone for properties that enable me to be a little more proactive, in terms of renos, standards and the ability to set my own rent based on the market and the standard I set. FYI
Caveat Emptor (sic). If it looks too good to be true, then it probably is. The only thing you get for nothing is nothing. Exercise care especially at this time of the property market cycle..
I too like the semi frameless rather than the 100% frameless. I also prefer a shower with a solid base. The base goes down and is rebated slightly into the wall studs. The one piece wall panel is then glued onto the two walls (no corner join) and then the glass walls are positioned onto the inside rim of the base. I have installed a number of these and depending on your taste, work really well. There is no chance of a leak at the base or in the corner and you still have the benefit of the new glass panel with the pivoting door. Just another option to think about.
I think the answer to your question depends on whether you are buying to reno and then sell, or to hang on for the long term. I am a buy and holder of property and use them like building blocks to buy the next one. Have about a dozen at last count. I dont know if I would be doing a major reno at the top of the market when demand is high if I am going to keep the property. That seems to be the time to make plans, so that when the heat goes out of the market you can do your upgrade and be in a better position to attract tennants and maintain the $ rental amount. I dont think a reno is wasted at anytime. Sometimes it gets you a better price when you sell and sometimes it gets you a better tennant and an increase in the rent. Eventually you get out of it what you put in…if you don’t overcapitalise !
Little fish are sweet.. or to put it a different way 50% of something is better than 100% of nothing. Without providing specific advice and I think that the Interest only option is a good one,,I would look at the big picture. Just having those properties in WA at the moment is a great appreciating asset…but.. is the capital gain over the nex few years really going to be as good as the last ? Probably not. Dont be frightened to let one of them go to get peace of mind. You have picked a great location at a great time. The old saying of “Life by the slice is nice” is appropriate. Take one problem at a time, you will still have a good job, still have property, and if you do have to sell, you will have done so at an excellent time and have locked in some profits. Dont forget that sometimes even a champion boxer has to take a step back, and sometimes its the step that enables him to make the knock-out punch. Keep going; you’re doing well !
Peter.RobAde has it in a nutshell. Good Advice. You are underfunded to make a property purchase at this time. Put some dough in an ING account and while BHP is down under $28, you could possibly put the other bit in the share market. If you do buy some shares with the other bit, try to get a share with a fully franked dividend. Mind out though when you are looking for a high dividend yield you dont chase the yield, without looking at the quality of the stock. The other option would be to pick a share fund and make monthly top ups with part of your $420.00. Be patient. As Renee Rivkin said its not a crime to invest and fail to make a profit; but it is a crime to lose your capital. Enjoy the next 30 years of earning and investing.
Sharif
The figures have to stack up for themselves. But if I had to pick one of the three, it would be the Elizabeth area. Margaret Lomax (author and multiple property owner) covers this in her book. I dont know much about the Morwell area or if it is a growth area. Mildura is a fruit growing area with a lot of transient workers and if you had a long-stayer they would probably pick a house rather than a unit. Elizabeth although an outer suburb is still within commuting distance of Adelaide and Lomax made the comment that a lot of people are buying up the former housing commission houses on good sized blocks, doing a reno and in the process changing the atmosphere of the area. I’m one that thinks the area is important. If the area you buy into is growing, then demand does too and prices will rise. Best of luck..Mum
You didn’t mention what the existing house was made from. Double brick, brick veneer, timber etc. if its double brick, the the white ant damage is less important structurally that if it was brick veneer and again of course if the whole house is timber. Its got to do with the supporting of the roof section. I missed out on buying a house because of an engineers report that cited subsidence over a sewage pipe, and all it was that the neighbour had taken out a large tree and there was slumping in that area only. The worst thing is that the house is just up the end of the street and every time I drive past, I have to kick myself ! Best of luck with your decision. Would be interested to know which way you go.Peej
Thanks for your help guys. Thats what I thought, but the reference will confirm it !
I can’t give advice whether to bulldoze or major reno. Thants a financial decision and up to you whether you want an older home with its features or doze the current building for a new place or put multiple dwellings on it. The treatment for white ants is much more fungicidal than chemical these days -chemical can still work but the fungicidal form of treatment is better and takes it right back tio the queen and wipes out the whole colony. Ask a reliable pest control company for an assessment of the area surrounding the house. White ants have to come from a nest and generally migrate to the house rather than having their nest inside the house. White ants love timber and lots of trees in the vicinity to make their nest and then migrate to property. If you cut off their path to the house by introducing.the fungicide, and that in turn is taken back to the queen, killing the colony, I would think that you would have little reason for concern in the future. Hope this helps (and talking from first hand experience). In NSW one of the companies that uses the fungicide treatment starts with “Sent”. I don’t know whether we are able to use company names on this site. All the best with your decision.
Peej
Yasmina, I have never heard of Powerloan so I can’t comment on the company. From the sound of your circumstances I would suggest that your husband exercise extreme caution. Not enough people look at the “downside” or what they can lose, preferring to see what they can gain. Look at what you can lose if your husband leaves his job and takes up the Powerloan option (and that doesn’t work) and then make the decision. Hope that all goes well in the long run
Peej
Snowflake, Terrw has hit it on the head. Whether it is done while the place is occupied or vacant is up to you and your tennants and doesn’t affect the rules relating to deductability v’s depreciation. Those that tell porkies and state that the renewal was actually a repair and try to claim the lot in that financial year may get away with it….then again if they get hit with an audit, they may not. Whether it is inhabited or temporarily vacant has no effect on the ruling relating to deductions or depreciation
Peej
Of course you can…of course you can but as the song says.. Take the road less travelled, take the long way round…..New investors sometimes think of the flattening in months rather than years and tend to be a little impatient. Do you know the story of the young bull who said to the old one “lets race down there and jump a cow ! Replied the old bull “no son, lets amble down there and do the whole herd” If you watch business sunday on nine this sunday.. i think they will have a special on property and in the promos, an adviser said he thought that property may go sideways for about 6 years…For what its worth and with a fair number of properties in my portfolio, i tend to agree with him. The property market together with the sharemarket, but more importantly consumer debt is pretty much at a historical high and as such one should be cautious about going into shares or property. Thats not to say that a specific stock or property will not present itself as a special opportunity, just that generally you should exercise caution. Don’t forget that in most places for the 10 years from 1990 to about 2000, you caould buy property for about half the amount you would have to pay now. Dont forget that was for about 10 years ! with only a relatively small capital gain, compared to the 4 years since. Be like the old bull and take your time, which may be measured in years rather than months.
Half a percent in 2 steps of .25% will knock whatevers left on the head and as f said, the old RBA will have both overreacted and done so too late. Things will bite along with NSW land taxes which for the first time will affect the “common man/woman” The RBA will say “OOps” and lower the rate down at least .25% fairly sharply saying to the effect “we hadn’t realised that the economy was slowing so quickly of its own accord”
Talk about the status quo………You’ve got a good savings
habit but I don’t think quite enough for property yet, without being undercapitalised. My advice to you (with the property market still fairly high with both real property and property trusts) is to ensure the security and return of your savings. I suggest an ING a/c paying 5.25% interest calculated daily and payable monthly as a good place to park your money without tying it up. Take your time in selecting your property – nothings going to go thru the roof in the foreseeable future… Take your time and get it right with your property selection, and your finances.Correctamundo ! The money in your offset is yours to do with what you wish and can be withdrawn in part or in full at any time. This is why the institution still requires you to pay the minimum per month as if you had notheing in the offset a/c. So if your minimum payment per month is 1K$ with no offset a/c, even with an offset a/c, the minimum will still be $1K. This is because as i said b4, the money in the offset a/c is yours and the Bank etc has no say in what you do with it. The advantage with an offset (100%) is that because you pay less interest, and you are still paying the full repayment amount, you’re paying it off so much more quickly. Any Help ?
sq gave good advice. 10 units gives a good average spread of return. ie you can have 2 units vacant and still have 80% occupancy. Allan Bond owned xxxx and the Hyundai dealership, but couldn’t afford to hang onto them. With a positively geared investment you can. Just make sure the units are not going to be time or repair expensive and that your small town has a reasonable chance of growth and wont turn into a ghost town. I can’t see what the problem is… Go for it !
You say you are building houses, you don’t say whether you are keeping them or, onselling them to make a profit and if so how much of the work if any you are doing yourselves. broadly speaking industrial property is less trouble than commercial property than residential property. A piece of advice….dont fall in love with property or with any other form of investment for that matter. Whatever form of property you finally decide on, it will only be by holding/improving and borrowing against that, that (I think) you will aquire long lasting wealth. After all your long term goal is to sit b ack and have property keep you, rather that around the other way. If you don’t believe me, ask anyone who has sold property prior to the rise and then ask them whether they would buy the property back at the price they sold it for….. Convinced ??????? Bye for now….
Coomera on the top of the Gold Coast. Still reasonably valued 195K for 3BR 4 yr old unit with en suite – rapidly growing area nr all the theme parks and marinas. Rail stn to Brisbane and 40 mins drive to BNE. Developing to the point where they are forecasting it to be the size of Southport..Good yield approx $225 per week…
C how you go ! 250K equates to 2 units conservatively geared….
