Forum Replies Created
Magnus, have you joined the API? As a student member (and GAPI/AAPI) there are quite a few reasonably good resources both in their members section and in their library.
Refer to the property clocks as to where the current thinking is with regard to the investment cycle.
Investment in retail is generally counter cyclical although it is now taking much longer to get development approvals cf: Westfield Centrepoint which has been in planning for 8-10 years, Rouse Hill which is still under construction with the first 3 stages complete etc.
Log into the websites of the REIT's, download their annual returns.
WRT the office sector – there is still a large oversupply of office space in some sectors (A-, B grade) on Sydney's north shore althoug the market is quite segmented – eg North Ryde is under full expansion mode with the introduction of heavy rail by the end of 2008.
Residential – keep looking. There are very few if any reits which will get involved in residential as a means of gaining any returns.
Industrial – quite a profitable sector considering the low rate of unemployment at the moment.
Look outside of the box into infrastructure type reits eg macquarie airports, toll roads and the like although a lot of these have been taking a hammering of late with downgraded ratings.
You will also need to consider the effects of the subprime fiasco and its effect on the ability for reits to refinance their liabilities or to raise alternative funding.
If the tenant is under a lease there is no provision for any rent review until expiry of the lease. You will need to give 60 days notice of any rent review before it can take effect.
Research material comes from such sources as RP Data and the like ie recent sales information (you will have to pay for it though) or you can keep a log of newspapers reporting the sales in an area eg local paper, smh or the age.
There is fundamentally nothing wrong with purchasing units – people have to live somewhere, they will increase relative to the market that they are located. Just buy in a good area where demand will remain strong, there is a shortage of available land for development, well located (shops/schools/transport etc). Smaller lowrise blocks have a greater land value component than a unit in a large multi-storey complex.
Talk about putting all your eggs in one basket. Talk with your financial planner , work out what you want to do, map out how you are going to achieve these goals. you have gone from running a business to being 'unemployed' and cashed up. Review your position and what you want to achieve.
Good luck.
Consider the following: get the site approved for 4 dwellings, stage the development building 2 at a time. Alternatively, seek a jv with someone who will share the risk. Option 2 get the DA and sell the site. Option 3 DA approval, do the required works for subdivision and sell the blocks.
As you are increasing your debt levels by borrowing from your equity (eg via a LOC) you are effectively reducing your ability to further leverage the property for any other purpose. Unless the property is experiencing rapid capital growth (and the bank will allow more frequent reassessment of the property's value) then you will hit a brick wall quite quickly.
It all depends upon the purpose of the trip – if it is to inspect possible investments or a pre-purchase inspection leading to a new IP then these costs would be capitalised.
On the other hand, if it is to inspect your current properties then it is a cost of owing and you are entitled to inspect. Diarise the trip including all meetings that you hold with agents/tenants/suppliers/builders etc to justify your time & costs.
No – renters like owner occupiers will source out a house to suit ie some will want a pool others won't. Finding a tenant that will adequately maintain a pool may be a bit of an issue (I'd speak with a couple of different managing agents about properties with pools and whether or not you should have a rental with one). If the answer is they are a pain, how much will it cost to infill? Alternatively, how much will the local pool geek charge to come and do fortnightly/weekly checkups (incorporate these costs into the lease).
Speak to your insurance company if you will need to take out additional PL coverage or if this is covered within the standard building policy. (It shouldn't be a PL issue as it is up to the tenants to control who goes into their pool/property however it is best to be covered).
As Michael said, 12% is very tight. Personally I wouldn't touch it as the risk/reward ratio is simply not there. In saying that how have you derived 12% (is it after factoring in interest, holding costs, all development costs, purchase/sales costs, legals, subdivision, design, approvals, council contributions etc)?
I would recommend doing a dcf as well as a secondary methodology (development model/direct comparison) to check your numbers.
Up to you whether you want your tenants next door, but the upside is that you get to select your neighbours. You will pay more for the block next door as you have the added opportunity of combining two blocks (much more saleable to a developer than having to do two separate deals).
How far off is the pressure for medium density? It may well be worthwhile to grab the back block as well if it is going to have the same zoning as yours/adjacent block – you will also need to consider the minimum lot size for medium density. The back block will give you access to a second street frontage allowing you the choice in naming the address of the property.It depends upon how much you know about the site and if there is alot of interest (how many contracts are out)? If there are only a couple a week or two out and no real interest, throw in your offer & see how it goes. If it doesn't fly, there is always auction day (your offer may be higher than where the auction gets to on the day).
Very nicely thank you very much.
(PS if I told you, I'd have to kill you).I have known Andrew Gee at West Ryde for a number of years www.andrewgeerealestate.com.au
He has been in the area for a long time and managed/sold some of ours over the years as well as carried out other duties when requested. This is a small family concern and they are very proactive.
Paint, carpet/lino, door handles, cupboard doors or handles, tapware, light fittings, basic shower screen – all cheap and cosmetic. Respray bathroom tiles/bath for a new colour.
Yes Cam, you turn an IP into a PPOR by living in it. CGT is still payable upon the proportion that it was used as an IP eg 2 years of say a five year ownership (living in it for 3 years as your PPOR) – and you may get the benefit of the reduction in cgt.
Another option – take up one of the offers by a bank to transfer your credit card balance to a new card for a 0% or greatly reduced rate. Cut up the card and pay the balance back ASAP within the interest free/reduced interest period. Don't use this credit card…
You were right in the first attempt tony. If you have any capital losses, these can then be used to offset some or all of your gain as well.
It depends upon a number of factors as to whether it will add value or not. Is getting an approval going to be easy or is it going to involve months of negotiation, rezoning, engagement of consultants, commissioning of expert reports, making representations to councillors, greasing palms etc? If it is the latter, then you may be able to increase the price demanded substantially, if not, sell it as is as any benefit will be minimal.
As you already have a background in sales & marketing, do the introductory real estate sales course (to enable you to work in the industry as a sales person). Speak to a few agents (both principals and sales people) – do it on a quiet day in their offices ie not Frid/Sat at an open house.
There are numerous openings due to the variety of property ie residential, commercial, retail & sales vs leasing. With a sales/marketing background you may be able to make a move into one of the major shopping centre owners as a leasing exec (great money but will burn you out after a few years).
Unless you are expecting problems, use a conveyancer.
(PS if I told you, I'd have to kill you).
