Forum Replies Created
Income protection insurance only covers loss of wages – investment income is unaffected (you can't get income protection insurance to cover your IP income). IPI is a tax deduction (if you are working).
A two week waiting period? Gee, that must be costing an arm and a leg – most are around 1-3 months wait (ie you should be able to support yourself & IPs for at least a few months before having to call in the insurance (this reduces the cost dramatically) – hopefully workers comp will cover much of the other period if it is work related.
Some policies do cover you until age 60+
Super policies generally have a life/tpd policy attached (mandatory component), some employers have added IPI as a benefit to their employees (this is rare unless you are a senior manager or have had it packaged).
Something else you would need to consider/review is your health insurance (if injury is not workers comp)
HJ, you need to consider what are your reasons behind contemplating selling – you have only held this property a short time, probably paid a premium if there was a new lease in place and now with 3 years or so left to run on the current lease want to make a run for it. You have 3 years of income virtually guaranteed still to come from this site, annual increases and more if the tenant exercises their option (3-6 months from expiry).
What were your reasons behind buying? Have your circumstances changed (or just the interest rate)?
Where will you be investing once you sell this property?
Your main criteria for analysis are net yield (ie rent less outgoings)/initial cost, as well as comparing this against net yield/current market value (if you were to sell).
There are plenty of good texts around, visit your local Uni/Tafe bookstore.
Firstly make your offer conditional that the vendor will sign any development approval or other application promptly within the settlement period.
Secondly, if council/Land titles office permits, go for a sub-division, values are better (if notional) but sales are easier as each property does not require the other owner's approval for any works (ie easier to hold without body corporate issues to manage).
you should be able to find out when the DA was approved off the councils website, then get the planners to confirm when the certificate of occupancy was issued.
Glen,
to answer your last question first, if the replacement benchtop was 'like for like' eg laminex benchtop replaced water damaged lami benchtop (ie not lami to granite etc) then it would come down to the cost of the replacement item (due to the extended life).With regard to changing from PPOR to IP, you may need mortgagee consent (from the lender) but usually this is not an obstacle – possible small fee. If you are not claiming for another PPOR, I think that there is a 6 year allowance for you to be away from your house to be able to claim the CGT exemption (move back in for a short time every five-six years – see some of the other posts about that).
Moving to a rental unit then claiming the costs on the IP is probably a sound move (you can only claim the interest portion of the P+I loan, but you do pick up the other costs of council, water, insurance, mgmnt fees as deductions as well).
Ensure that the builder/architect bear any costs with regard to lowering the pit, these are not your problems to rectify and the responsibility of the arch/builder.
Raise and discuss the problems with the architect – get them to clarify the problem and present the solutions. If the levels have been stuffed up find out what is going to be done.
Check what your position is legally with regard to handing over final payments before sighting the occupancy certificate (from council/certifier) and plumbing compliance (water board/council).
Is the pit an inspection pit or an overflow? (big difference). Insist on a gas tight lid to prevent overflow if it is an inspection pit.
SNM
(PS: 35.35-35.2 is only 150 mm not 400mm.)
Andy, there is usually no issue of a slab being below the ground surface providing that the outside wall has been tanked to prevent water hitting the wall below ground (there are many houses still being built on sloping sites).
AHD is simply a reference point. A good residential builder will use a surveyor sparingly – boundary, 1 m above FFL & recovery points (possibly setout of the external corners if it is a complex site, lift shafts, all levels above first floor on multi storey buildings etc) and final survey (for strata subdivision). A builder is trained to work from the survey marks and to set out.
One thing to remember Glendafull, is that you are not buying any tenure in the land. That is, the owners of the caravan park can sell the park to a developer and give you 24 hours notice to vacate the property. You will need to check that the property isn't being considered for a sale and that the park will be around for longer than the 7 1/2 months that it will take to repay the funds and get a return.
You could start by checking council records for any Development Applications (approved or submitted). It would also pay to have a title search (to check the encumbrances on the land eg may be a caveat noting the interest of the developer to purchase in 6 months pending DA, or upcoming renewal of the lease of part of the land). You will then be in a position to make an informed decision (not just based on cashflow).
I'd tend to consider the purpose rather than the property itself.
That is, once you consider that property A has a better growth potential than property B and make that decision (sure you'll look back in years to come and say 'oh we should have held on to both etc) then you will just live with it. I have bought and sold numerous times as well as having passed up on countless others (regretting many non-purchases), however I consider that if I wasn't in a position to purchase at the time, then there is little point regretting it.
You have considered your options and decided that in order to establish your new business you must dispose of one IP (that is the reality based on your preferred risk levels) now you must decide whether holding onto a property in the NT or locally will be of more benefit.
The NT historically suffers from a rental housing shortage which results in good rents (is this going to be the case forever)? Alternatively, there has already been alot of growth in Qld and the Sunshine Coast (when will the bubble burst)?
And to be really pedantic HW, "no property can actually be said to have increased by 20% until " it has been resold and settled on a "like for like basis" as we are otherwise only comparing median prices against the subject property.
The countdown has started. How long & which bank will raise their lending rates?
A little more cautious than stock market advisors Jon.
Gav,
as the inlaw is 'disposing of her asset' will she be captured by any asset test for the pension ie adjusting her asset base in order to get/increase a pension?As you said Mat, they are all feel good shows but point to how spending sub $10k (generally) on smoke and mirrors can boost sales prices. If a property presents poorly then it may (but not always) hold down the sales price conversely a cheap & nasty reno can do the same.
Any work undertaken before you are getting income (rent) will be capitalised as you have bought the property in a dilapidated state.
Receipts will form the basis of the claim (for depreciation or expenditure) however a QS can determine which is which.
tammy wrote:hmmm…. so the $2100 I paid to have my trust set up with corporate trustee was at the expensive end?Bugger!!!!
Well, as long as it wasn't as expensive as not having set it up then no.
Either visit the Lands Dept in the state (eg http://www.lands.nsw.gov.au) or contact one of title search providers with the appropriate details, pay the fee and within an hour most searches should be back to you (provided that they are already in electronic form).
Why not just purchase in a discretionary trust?
RR, I am a strong believer that a professional background which is gained by well rounded training and through structured learning as opposed to a short 'ends justifies the means' sales course will provide you with the financial nouse and understanding that you seek. Short courses & in-house agency based training may give you glimpses into property dynamics however structured learning in property economics (although more time consuming) will give you indepth knowledge, research skills, curiosity etc to benefit your clients in a more tailored fashion ie you will understand what you are spruiking, know what is a good deal and one to walk away from based on knowledge not instinct & trial and error.
Real Estate sales people have a great reputation (just watch ACA etc), rarely does a professional like a valuer get such a media hammering (usually only when you are appearing as an expert witness justifying someone elses valuation of a $50M of a development).
Contrary to Terry's comments, valuers are highly sought after and there is a vast shortage of qualified valuers. Why restrict yourself to residential (you are only limited until you get suitable experience in each field) eg commercial, specialist retail valuer, special property (eg telco, leasehold, marinas, natural resources, plant and machinery etc)? There is little money to be made as a res valuer (great and important training ground) however there is a vast variety of work available in commercial offices leveraging off the val skills learnt to become property/asset managers, analysts for property trusts and a wide variety of other roles. Most val courses (degree) are 4 years and qualify for API membership (essential for recognition).
Suss out the careers section of the API website for more opportunities.
Check the health of your loan – ie do you have a loan offset facility? If so, park the $40k in the offset to reduce the interest payable and repayments will have more effect against the principal it this is a P+I loan. You may then be able to redraw this money for other purposes.
If you don't have an offset, it may be worth refinancing to achieve this outcome.
