Forum Replies Created
Hey Dazzling were you in a property magazine recently?
Hi Bedford
I don’t think you will get a better answer than what these two guy’s have said, I couldn’t agree more with reading Rich dad poor dad. This book will get you in the right frame of mind of how to look at money other than what you have probably been taught all your life and also how I would say 90% of the population look at it.
Cheers
Hi
I am no expert but I am going through the same thing at the moment (W.A). As far as I can find out there is no legal way around it but you can minimise it by keeping the value (on paper) of the property as low as possible. I guess you have to remember that you should have only paid half in the first place because your partner (JV) should have had the other half. You will also only have to pay it on the half you are buying. I guess the only people who do well out of SD is the government as usual, it kind of feels like they are double dipping then they will charge your partner CG tax!. Not bad for a days work and they didn’t even have to leave the office [grrr].
I paid my half out on the value we bought it for and may just give my partner his profit as say an early Christmas present [wink2]
Dazzling
Oh yes I seem to remember you talking about a venture similar to that a couple of months ago before you bought the block. Well it seems that you have gotten onto a good thing and is working out well (financially) for you.
I have also been advised against cross col but it is a simpler way to go without raising a LOC for example and most people do use that structure.
Cheers
Hi
If you are asking where to find a unit under 200 grand my advice would be googling realestate in that area and start looking???
Dazzling
How did you borrow 105% (LVR) on comercial?
Hi kmiddlet
That is an excellent post you are thinking and talking like a true investor not someone who has jumped on the band wagon at the peak of a cycle. The most important part of any investment strategy in my opinion is buy low and sell high. The RE market is a slower version of the share market; you buy at the lowest price set your sell price, watch it run and sell when you said you would at entering the trade. Yes the price may keep climbing and there will be a sense of what if I let it run a bit longer but all you need to care about is the profit margin that you needed and then getting out and allowing you time and money to enter the next. While the hopefuls all sit around the BBQ on the weekend talking about what big time investors they are because they were lucky enough to get on the back of a cycle, you have already taken a position on your next move.
I couldn’t agree more on the signs you are talking about, yes REA being arrogant and not returning calls etc I cant wait to catch up with some of them in a year or two and watch the coffee flow like it should do…well it is me that parting with the hundreds of thousands of dollars!
Again great post! I give it 6 months……
Thats news to me!
Originally posted by Interceptor:I think the Perth market will continue along these lines for another year or so possibly up until the Beijing 2008 Olympics.
Growth in China at the moment is unbelievable (10.5 % in the last quarter)
The mineral boom will continue however we will see lower prices for commodities such as iron ore in the next 6-12 months. The last negotiations with the Chinese for a 17% increase in iron ore prices was tough and I suspect the Chinese will make moves to curb price increases in commodities in the immediate future.
I think the greatest worry after the 2008 Olympics is a slowing of Chinese demand for raw materials such as iron ore. I can see big trouble for the Chinese economy after this time as I don’t believe their government is capable of managing such a huge economy in a transparent and fiscally responsible manner.
Any trouble in China will have an impact on W.A. and hence the property market may slow. India will play a more important role after this time and could prope the W.A. economy up.
My 10cents for what it’s worth.Boom! have you checked the share prices lately?
Oxiana came out last week and said at this stage they are not going to achieve the budget they had planned on this year after all the hype 3 months ago! BHP hasn’t hit $30.00 since before all the negotiations with China, I doubt they are ever going to fall for that again (16%)…the ball might be in their court next time! the shares are heading for the red(resources) if bought 3 to 4 months ago and any where you would like to read they will tell you that investors will not see the same returns this year as last…property included! Am I missing something???
Lets not go counting the chickens yet!
On the ABC last night they said Perth has officially gone past Melbourne and is now the second most expensive place to buy RE…
That is interesting about how normally as one is going up the other is going down Derek that would be a very useful tip to remember when trying to analyse a market.
Hi Mick Perry funny you should mention Bayswater, About 3 months ago I was driving around the back blocks just behind Tonkin HWY there. I came across this 2×1 fibro place that looked like no one had lived there for 10 years. It was on top of a little hill and looked like it had an ok size block. With my palms becoming itchy I jumped on the mobile and called the REA, as usual I wasn’t the only one who had spotted it and saw dollar signs. The agent said “it is on 900m2 and would have no trouble being sub divided etcâ€. I Said “yes but are the titles etc in place yet?†he said “no†and so I Said “so what we have here is a dump 2×1 sitting on 900m2 with a very shabby backyardâ€. Well I couldn’t wait any longer and said “so what are they asking?†he said we are confident we will get 600 000+!! I nearly dropped the phone.
The latest way of advertising here is that if anything is bigger than 500m2 they say “duplex size block $$†At the end of the day in my opinion it is what it is at that time, I could fit a motel in the back of one of my back yards but I don’t put it on the market for 15 mil. I am not saying there isn’t opportunity in sub dividing but the profit margin must be very slim when you have already had an initial outlay like that and it still hasn’t been titled let alone 2 houses put on it.
Hi Derek
Hope you had a good holiday and are well rested.
That is an interesting point about rental return for W.A, I think this would be the case if you bought now, the ROI would be rather low. If you had bought before the boom though I think you would be enjoying low vacancy rates and high demand for rentals now.
Rent in W.A and invest over east?[tired]
Thank you also for your informative email my reply is on its way.
Cheers
Originally posted by perthman:By the way – I wll give everyone here a bit of inside info. It has been noted that a quite a few property owners (especially around the wealthier suburbs) are selling up and deciding to rent for the next 6-12 months, and the people that are doing this are definately not silly.
Maybe someone can care to explain this phenomenom?
Hi Perthman
I guess people might be thinking that if they take advantage of the “frenzy” now and make a good profit at a later date they will be able to buy back into the market under the price they have sold at.Maybe it is just a smarter strategy for creating wealth??
After considering my options I think it would be a wiser to move into a rental and just buy another IP.
When you consider that you cant claim any tax benefits from a PPOR so all those rates [grrr] and repairs etc would just have to be taken on the chin. If I were to move into a rental all those things would be the responsibility of the owner, the costs associated with my “new IP” would be tax deductible and I could also take advantage of depreciation etc.
This way like you say you could rent the kind of house you want to live in and not be disappointed because you had to pay too much and settle for somewhere where you would not even have considered living a year ago.
Cheers
Hi Perthman
I am also from Perth and am a bit frustrated with the RE agents and current market we have here. I have a couple of properties here and am happy at the CG after only having them for 2 years. At the moment I am looking for a PPOR so my requirements are different to an IP. There is emotion involved when you expect a certain quality for your money and also location plays a part. When I buy an IP I just go by the numbers which makes it a lot easier.
My first house bought 2 years ago was a 3 x 1 on 1800m2 block near the river, I picked it up for just over 200 000 It is now rented out and is pretty close to neutrally geared. Unfortunately it is no where near my work so I now have to look for something better suited to my situation. The value of that place is now above 350 000 with out doing anything to it and the equity has certainly helped with other purchases.
So now I am in the market for a new PPOR and a house in Perth is unheard of at 200 000 actually you wont even find a house with a backyard for under 320 000 let alone 1800m2. I have spoken to about 40 RE agents and keep hearing the exact same thing as you are talking about. I went on the REIWA website 2 weeks ago and got the sales evidence for Forrestfield which is roughly 14 km’s from Perth, now the average price is about 250 000 for a 3 x 1 on 700m2. If you search the suburb on RE.com there is nothing under 300 000 and when I have made offers on places which are similar to previous sales under 300 000 the agent says I wont even present that offer to the owner. Most prices are now always advertised as from such and such or offers above such and such or like you say EOI.
I guess while we all keep running around paying too much for property the market will not slow its all about demand and there are so many people jumping in and buying a unit for an investment etc because they hear all the hype in the newspaper and TV. What I cant understand if the median price is 250 000 for a suburb but all the houses are advertised over 300 000 and when you call up the agent says we have already 2 offers at the asking price so you will need to come in above that what you are supposed to do? I hope that by the end of the year it has slowed down and our number of places for sale goes back up to roughly 10 000 at any one time instead of 5000 which it is a present because everyone is hanging on hoping for another 25% growth this year. At least then there would be some bargaining power for the buyer again. Until then I might just by a tent LOL.[blush2]
Originally posted by 1HotValuer:Ok I am answering Lee’s question on HOW to buy your first +cf.
1.Save up $9000 (20% deposit)
2.Buy a property in Queenstown or Zeehan or Rosebery in Tasmania for $45,000. Rent it for $90 per week.
3.Save up the stamp duty and conveyancing cost during the 6 week settlement.
4.I recommend buying sight unseen. I have bought 10 properties this way.
5 Good luck, there are tons of +cf all around Australia. Don’t listen to the negative people that say Queenstown is too risky. If you are buying to hold and not sell then there is nothing to worry about.
6 Your investment will go up in value.
I should know, I’ve been a Valuer in Sydney for 20 years.
And I’m female, incase you were wondering….Hi hotvaluer
I did a quick search on the places you have suggested above and was surprised to see so many on the market and not one of them was ” currently tenanted” . I am sure that the negotiating would be in favour of the buyer but its not much use having a cheap house if you cant get anyone to rent it. No offence but these small towns can look good on paper and the houses can seem like a bargain but with out rent they are not +cf.
I hope you are right Carl trying to find a value for money property in Perth at the moment is dam hard![grrr]
I would also like to know who you are using jaffasoft??? I think $30.00 is a bit closer well thats what Comsec charges anyway and they sure beat paying a broker by about $70.00. Either way its all better than paying $25 000 to the goverment!!!!
Originally posted by Pursefattener:Firstly mate it’s Warragul . Get the spelling right .
Thanks Pursefattener we are so glad you contributed![hmmm]
Hi KJK51
You make a valid point, If you were stuck in a corner and had run out of funds this would be a fair sacrifice to make to free up some cash to grow. In my opinion 15k stamp duty on buying the property then 15k on selling the property +land tax along the way means 30k+ goes to someone who I have never even met before. If possible refinancing would always be my first move for expanding a portfolio.
Cheers
Originally posted by fischer:With the recent rate hike by RBA this will place a downward pressure on property prices around Australia, Those with property investments in WA would be wise to sell at an all time high and buy on the East Coast at bargain basement prices.
Thanks Paul.[cap]Hi fischer
Yeah the thought crossed my mind but on my salary I don’t really like the idea of giving the government 50% of my profit in capital gains tax.[grrr]
Originally posted by Anthony.Congdon8421:Interesting times here in WA.
Either way, an interest rate hike is a positive thing for WA, in that it should calm some of the “irrational exuberance” found in our local real estate market, although we will probably need another 0.5% for the speculative buyers to really get the message.
As to what this means to astute Western Australian investors…now is a great time to be looking for bargains on the Eastern seaboard and hedging your positions in WA.
I couldn’t agree more this was very well written Anthony. It’s nice to know you own a Property in W.A but it is very frustrating trying to buy one in these conditions. This morning on the radio a property market analyser was giving his thoughts on this topic. He believes that the interest rate rise will help bring W.A back into prospective with the national property market. He believes that we have hit the peak and the market will now go sideways and some areas which were over priced due to the hype of the last 12 months may even see a small decrease in value. He suggested that he still wouldn’t be buying in W.A until 12 months down the track when there will be a lot more properties coming onto the market giving the buyer back some bargaining power. I was speaking with a real estate agent the other day and he led me to believe that he is already starting to notice that the +400 000 dollar price range is getting difficult to sell. He did however say that 200 000 to 300 000 is still being snapped up before an advert is put in the paper.
Have to agree with DLPP on mines shutting down overnight yes the resource price is great with China needing our steel etc but at the end of the day if a company is not managed well these prices wont help. I have also heard that shares will not fair as well this year as they did last year the resource sector in particular will take a dive.
Well I guess it is going to be an interesting year for investors And as Robert Kiyosaki says a good investor will find a way to make money in a rising market as well as a falling one.
