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Have you a track record? Portfolio? Detailed cashflow analysis for the project? Is an overdraft an option?
Read the LEP for the area, this will guide what you can and can't do in the zone. Then speak to council town planning. Usually a business zoning generates a better return than residential unless the area is changing.
And a bed. Room by the hour?????
http://www.api.org.au then go to the victorian branch to find valuation practitioners in the area
Unfortunately, the nature of the beast has changed over the years, you'd take on an apprentice at 14-16 yrs and train them for 4 years. Now, they're expected to have the HSC, be able to drive, get themselves to site etc and get the same pay as a 15-16 yr old. No wonder why they aren't keen to do their time.
In the first 2 yrs they actually cost alot in time and effort (there is lots to learn about working on a site, let alone what they need to learn to do their trade), that's why good 3rd & 4th yr apprentices are worth their weight (they can usually drive by then too).
They get what they're worth
If your property is valued by the financier at $1,000,000 and will advance 80%, it means they will allow you to borrow up to $800k against the property, PROVIDED you can service the debt. If your current mortgage is say $600k you will have $200k which is still accessable.
If you are to draw upon these additional funds then you will have a few options – refinance (start loans over) at $800k, continue with the existing loan + separate loan/line of credit etc for $200k or redraw back to the $800k (if this was your original loan amount and you have repaid $200k equity).
You will have to pay interest regardless of which option that you select.
Depending upon the option taken will determine how much it costs in fees to establish.
If you use the redraw method, you will be required to repay the loan in the original time of the contract eg if you are 10 years into a 25 year loan, you will only have 15 years to repay the entire amount, hence refinancing may be a better alternative (lower repayments but higher total cost).
If you sell down the track, the first creditor paid is the bank (even if the debt is to be transferred to another property).
A line of credit is like having a credit card with a high limit but no interest free period. It is flexible to allow you to pay interest only and you can pay as much or little capital back as there are no set repayments.
Just to add to the above, if you undertake work BEFORE you start getting rent, then you must capitalise the works (ie it is obvious that you have bought a depreciated asset needing replacement), if you do the work after the first tenant leaves, no question about it R&M and some capital works.
You will however need to weigh up wether spending $3-5k on these works (and depreciating them) in return for a better rent ie extra $20-30 pw is better than waiting until the change of tenant to carry out these works. You may prefer to hit some now, to get the addit rent and some later for the R&M.
Fiori, the awards for apprentices have been around for at least a couple of years (pre-1970's)…. You're showing your age.
As for people working 9-5, I take it that masterrel, crashy & oneplumber would be meaning those who shuffle paper/push buttons on computers & sit on their gas strut chairs all day without seeing sunshine.
Per Calendar Month.
If they are selling a parking space – is it strata titled ie on a separate title to any of the suites/units in the building? What are the outgoings?
By secure lease, how? Is there a current 15 year lease on the carspace (via the carpark operator)? What is the rent review mechanism (fixed, cpi, market)?
If the space has separate title, and a good lease you may find that banks will lend with a low LVR 50-60% only.
It will all depend upon how much of the work is 'repairs and maintenance' & how much is 'replacement'. R&M is expensed, replacement must be depreciated.
Depends greatly on the type of unit Elka, if it is a window rattler, they are simply 'plug & play' as all that is required is pulling the old unit out of the wall and putting the new on into the existing opening (provided that it fits the existing hole).
If you are looking at a split system (unlikely as these weren't around until early 1990's), then the electrical work comprises the connections between the two units (compressor & fan coil unit) + connection to mains (existing supply to current a.c), then there is the gas connection/refrigerant lines between the fcu & the compressor. This work is the same (only greater) if it is a ducted unit.
Most AC units will struggle with 35 degree temps – have you thought about roof insulation & shading (trees) to keep the heat out of the house?
A couple of things to consider:
1 – as your friend will rent the property, use a standard form lease & take a bond (the managing agent will do this if you engage one, however it is a reasonably simple process of going to the newsagent and picking up the documentation, & filling in forms.)
2 – Managing agent will take the hassle out of any repairs/maintenance which needs to be done in your absence
3 – Why would you even consider paying the electricity/water charges without passing them on to the tenant? This allows them to 'rort' your generosity by running appliances 24/7 eg air con/ pool filters, taps etc without incurring any cost.
4 – Engage a QS to do a complete depreciation schedule, more important since the unit is fully furnishedThere are still some areas in Western Sydney where you can pick up sub-$200k 2 bedroom units which are returning 5-6% gross. With a little work, they would improve. The banks would loan more favourably on these (80% LVR), values are a little more reasonable considering Western Sydney has taken a big hit price wise over the past few years and is showing value in many areas.
It is a tax position – as the property is making a loss (even a paper one, through depreciation allowances), that loss goes against the income of the owner (usually in a high tax bracket) to reduce their income and possibly drop into a lower tax bracket.
Neg gearing does not have any impact on growth as it is an analysis of cashflow & tax effects. An investment property with strong capital growth will eventually get caught up with capital gains tax (upon disposal) .
There is a lot more to it: +/- geared property can both be profitable based on the growth of the asset price.
Medians will give you an idication of what was happening in the market based on the entire market in an area, not being selective of the type of property and only being a statistical analysis. Your own research will dig up the most recent sales, most comparable properties, non-related transactions etc which will provide the basis for your own investments.
If you analyse the sales data, then exclude those which don't apply to what you are researching you will end up with a different answer to the median price. Eg If there were 20 sales in an area, 8 were 3 bedroom new units, 6 were 3 bed older units and the balance were 2 bed units you would sift through the sales to determine which ones you would compare to the purchase that you are considering eg rule out all of the 3 bed units as you want a 2 bedder or strike out the new units & 2 bed units as you want an old 3 bed unit.
Yes, interest excludes any repayment of the Principal.
Or the UK govt bail out its bank
Checks have been done – usually through dept of fair trading/vcat to see if there are any rental bonds/leases on the properties. Not sure of the current situation though.
More precisely, your costs (council rates, water, sewer, interest, insurance, management fees, strata levies etc) exceed the income generated by the property. The difference comes out of your other income/from other sources.
