Forum Replies Created
The owner cannot invoke the mortgage insurance, only the bank (the insured). The vendor will have to come up with the shortfall between the net sale price and the outstanding loan amount. Seek legal advice as to whether you can sue for specific performance and lodgement of a caveat on the property to prevent the bank disposing of the property under you.
Cap growth or returns – it all depends upon your situation. If you need to generate additional income to support your portfolio/loans, then go for cashflow, if not go for capital growth however it will depend on your particular circumstances.
"how do you find out if they are actually tennanted most of the time without taking agents word for it?" – site inspection. Is the place furnished? Are there personal belongings?
Get a copy of any current lease agreement
Cap growth or returns – it all depends upon your situation. If you need to generate additional income to support your portfolio/loans, then go for cashflow, if not go for capital growth however it will depend on your particular circumstances.
"how do you find out if they are actually tennanted most of the time without taking agents word for it?" – site inspection. Is the place furnished? Are there personal belongings?
Get a copy of any
Cap growth or returns – it all depends upon your situation. If you need to generate additional income to support your portfolio/loans, then go for cashflow, if not go for capital growth however it will depend on your particular circumstances.
"how do you find out if they are actually tennanted most of the time without taking agents word for it?" – site inspection. Is the place furnished? Are there personal belongings?
Get a copy of
Cap growth or returns – it all depends upon your situation. If you need to generate additional income to support your portfolio/loans, then go for cashflow, if not go for capital growth however it will depend on your particular circumstances.
"how do you find out if they are actually tennanted most of the time without taking agents word for it?" – site inspection. Is the place furnished? Are there personal belongings?
Get a
Cap growth or returns – it all depends upon your situation. If you need to generate additional income to support your portfolio/loans, then go for cashflow, if not go for capital growth however it will depend on your particular circumstances.
"how do you find out if they are actually tennanted most of the time without taking agents word for it?" – site inspection. Is the place furnished? Are there personal belongings?
As the 'unit' is more like an individual house, the only things that you cannot change will be extrernalities ie colour of building, roof, gardens etc unless the entire building and courtyards are part of your entitlement and the common areas are the areas servicing access, garbage areas and the like. A small body corporate will make life easier. Do you know whether they are owner occupiers or leased out with absentee landlords and who is on the executive committee?
Talk to your accountant prior to deciding upon any course of action – it should save you a lot of time.
Go to the CSR or Boral website sites for the appropriate installation methodology. The Building Code of Australia stipulates that all wet areas are to be waterproofed using a proprietary system of waterproofing ie get someone in who will provide the mandatory 10 year warranty on waterproofing installations – it is too critical an area to cut corners as the damage will far outweigh the cost of having it done right in the first place when access is available.
Pez, I'd recommend that you met up with one of the Council's town planners to discuss the possibility of getting an approval – I note that the block is smaller than what many councils will allow for 3 dwellings to be built ie many require about 900m2 as they have strict conditions regarding the provision of private open space, landscaping, occupier and visitor parking etc. It would also be pertinent to ask the planners what development contributions are required for the creation of the additional lots (ie costs for the provision of additional council services – health, libraries, parks etc).
If there is no income, then there are no deductibles – that is why I suggest turning it into an IP and rent elsewhere (at a lower price or better premises) so that you are getting a return and are able to claim all expenses.
Alternatively, just get the land revalued (by a valuer) once construction is complete so that you have your initial purchase cost, development cost and market val all to establish what the house is worth when you move in and then in the event of a sale you can argue that cgt is only available on the value prior to you occupying the house (it is not equitable to be taxed on the % occupied/total ownership encompassing the complete increase in value less the cost base if it was not possible to occupy until the dwelling is built) – discuss this option with your accountant.
If you live in your other owned premises, then this is your PPOR (ie you own it, you are living in it) – that is why you cannot find anything written to the contrary. Rent out your house, and rent elsewhere – that way you can still claim your land as your ppor & the house as an IP.
By calling your land your PPOR, then you may be subjecting your other house to become liable for land tax annually and CGT upon sale.
Run……………… (in the opposite direction). There have been many posts previously (and currently) about CFC and the additional costs (finders fee, unsustainability of rents etc). Tread carefully. Google Spiro Kladis.
Spot on – prices don't include the commission paid to the 'finder' – if you scour the web you will find many of these properties yourself, they are taking the hard work out of it.
Rents are often unsustainable – especially on the commercial sites (don't believe all you read). How can you seriously expect to achieve 20-30% more for a B Grade industrial property in an secondary location (liable to oversupply) when compared to say a similar property in the Sydney/Melb/Bris markets?
I'd agree with the above, it will have to be capitalised. To maximise your deductions, get a quantity surveyor on board asap to discuss the works, any possible write off of existing elements and the accelarated depreciation of the new fittings and fixtures.
Research – is the median price for 1 bed units, 2 bedders or non-descript (ie all units or does it include houses)?
Is the median price skewed by the sale of a large number of newly constructed units?
What is the sample size?
What is the state of the unit – ie in desperate need of renovation/as new condition etc? (ie how much do you need to spend to bring it up to a comparable condition to the median priced unit)?
What factors are causing the price of this unit to be around 60% of the median price (small rooms, studo rather than 1 bedroom, shared laundry, no parking, main road location, reluctant sale, major body corporate levies due)?In pointing out the negatives, there must be many more positives for the property ie well located, shortage of supply, high transient population etc.
Hint – A vacant block of land is not a ppor. You can only reside in one PPOR at any one time (although there is some allowance for moving in/selling previous ppor)
I'd agree with the conveyancer – a pest inspection will not reveal building defects (although it may reveal the existence of active or previous termite activity). An inspection of the minutes of the strata meetings will reveal whether there have been issues relating to structural problems, pest and other infestations. (lopetha – costs prior to the settlement are generally capitalised as they are related to the purchase not the the income derived from the property).
It is more critical to have a pest & building inspection on freestanding premises eg houses or individual townhouses/villas as opposed to strata units as the costs of repairs in strata premises are shared between all owners.
A couple of quick points – inner city is most likely to be best for capital growth just watch out that you are not buying into an area with alot of redevelopment currently being planned eg ex-industrial areas near the city. You may also qualify for the first home buyers grant & stamp duty concessions (as an added bonus).
Alternatively, many of the middle distance suburbs can present good value (provided that they are well located) eg Burwood/Strathfield/Homebush. A little closer in you may find some reasonable options open to you in Summer Hill, Croydon or Ashfield. You will find that the newer units will be much pricier without offering the benefit of higher capital growth as the developer's margins will take a couple of years to wash through the system (eg Homebush Bay).
Still waiting for that $300k block?
